Sunday, February 14, 2016

The 2016 Toronto AutoShow - Summary Report


 

I attended the first day of the 2016 Canadian International (Toronto) AutoShow and shot some video. Here's a look at what's new including production-ready vehicles such as the 2016 Mazda CX-9, new 2017 Chrysler Pacifica, 2016 Cadillac CT6, 2017 Lincoln Continental, 2017 Jaguar F-PACE SUV, 2017 Genesis G90, as well as some cool concept vehicles including the Hyundai Santa Cruz Crossover Truck Concept, the Nissan Titan Warrior Concept, and the Buick Avenir Concept plus lots more including the Art of the Automobile exhibit.

Click the video to watch some of the highlights of my day. Enjoy!

Sunday, September 20, 2015

What is Your "Dream Come True" Car Buying Experience?

When customers at our dealership pick up their new vehicle, we encourage them to write an online review about their car buying experience at our store. If we have done everything well and the customer is completely happy with the way everything turned out, we are likely to get a very positive review. That's what we are all looking for whether we are car customers or car sellers. We love to be part of someone's great experience.

It turns out, however, that what is a great experience for one person is not always the same for the next. Nevertheless, let's consider the three broad scenarios that would qualify as "dream come true" car buying experiences and see where your expectations fit. I'll preface this summary by observing that most successful retail transactions include three elements: people, product, and price. Keeping these components in mind, let's look at the typical scenarios That I have observed:
  1. You have searched online and in-store for a specific vehicle considering the product as a commodity and the purchase as a transaction that should be efficient and cost effective. The vehicle is really an appliance in your mind so the utility of the purchase is the key factor as well as the price of the product. You happen upon a seemingly mis-priced vehicle that is within the general parameters of your search. You have done enough shopping to believe this is an outstanding opportunity to get something better than what you expected at a price below what you expected. You move quickly to wrap up this amazing deal before the seller realizes the value far exceeds the price. You just scored the deal of the decade and you can't believe your luck in stumbling upon this gem!  This is your dream-come-true car purchase experience.
  2. You have searched diligently for a vehicle being particularly attentive to the reviews and opinions of the top automotive journalists who value a car's driving dynamics and "road manners" above the mundane creature comforts of heated seats or a premium sound system. You're a driving enthusiast and have always loved cars; the way they look and the way they feel (especially the "G-Forces" that give you a rush on acceleration and through those tight corners). You have that perfect vehicle picked out months (perhaps years) ahead of making a final purchase decision. You long for the day you can ditch your current out-of-date vehicle (even though it may be only a couple years old). The new styling, the new technology, and the shade of red or blue that makes all other reds and blues obsolete, will make you the envy of your friends and colleagues (at least for six months). Your visit to the dealership comes months before the first of this new groundbreaking vehicle arrives. That guarantees you will be the first on the road in this new edition roadster. Your excitement hits its peak when you drive off the lot and pull up to the first intersection and watch the heads turn and see the approving nods from bystanders who acknowledge that you car is something special (which means that you must be someone special). This is your dream-come-true car purchase experience.
  3. For you, buying a new car has usually been an important although somewhat nerve-racking experience but this time you hope for fewer hassles. However, you soon realize that the myriad of choices and options is overwhelming. The technical features are beyond your high school science understanding and you get more confused and unsure of yourself the more you research. You naively walk into a dealership that sells the vehicle you have at the top of your list to see if you can get some simple questions answered and by good fortune or by fate you connect with a product specialist who is empathetic and  seems to be listening because he asks questions and provides insights that get to the core of what will make you happy and solve your problems. Your salesperson introduces you to people at the dealership who you will be working with when you return for regular service visits and everyone you are introduced to seems genuinely appreciative of your patronage. It feels like a business and people you want to work with. Before you know it, your salesperson has found just the right vehicle that you then fell in love with on the test drive and which turns out to be surprisingly affordable. Everything has gone so smoothly that you know you will be a loyal customer and recommend this dealership to friends and colleagues. This is your dream-come-true car purchase experience.
After eight years in the car business, I can assure you that I have met each of these three customers many, many times. They all present particular challenges in keeping happy and on track throughout the purchase process but each comes at the car buying process from a different perspective. Each is looking for a Dream-Come-True purchase experience and it is my responsibility to provide it even though it will be quite different from one to another.

What is your Dream-Come-True car buying experience and have you had it yet? Did it happen once but never again? Do you generally fit into one of these three scenarios or a combination of two or three? For you, is it more about the deal (price), or the car (product), or the people who helped you along the way? Please leave your comments about how your car buying experiences turned out.

Monday, September 7, 2015

Should You Purchase Your Used Car from a Dealership?

A puzzling statistic (and paradox) that is a fact of life in the car business concerns the number of used cars sold versus new cars. Despite all the Super Bowl ads and general hype around new cars, there are more than twice as many used cars sold every year as new cars.  But that's only half the reason I scratch my head over used car buyers.  At many new car franchise dealers (most of whom operate used car lots) the number of used cars sold is normally half of the new car sales (and sometimes less). That means that a lot (in fact, most) used car buyers must be shopping the independent used car lots or buying privately.

Used Car operators who are part of larger dealership groups have really been successful in recent years by taking the New Car Dealership operating model and applying it more skillfully to Used Car sales than the new car dealerships. Often, the service level, quality of used vehicles, and pricing at these Used Car Superstores is on par (or better) than at many used car lots at New Car Franchise Stores.

The Original Equipment Manufacturers (OEMs) have been addressing this reality in recent years by advertising and subsidizing the operation of OEM Certified Pre-Owned Vehicle operations where the New Car Franchise store sets aside a portion of its best pre-owned inventory that passes strict OEM mechanical and appearance standards. The Certified Pre-Owned inventory then qualifies for low financing rates as well as extended OEM warranty protection that would not be available from a non-franchised Used Car store. The customer gets additional peace-of-mind knowing that the pre-owned vehicle has been properly reconditioned and the vehicle is backed by the manufacturer as well as the dealer.

Even if you are buying a used vehicle that is not part of the OEM Certified Pre-Owned inventory, you still have many advantages over buying from the car's previous owner. For example, used car dealers usually:

  • Certify the car to state/provincial standards of road worthyness
  • Offer extended warranties
  • Handle the ownership paperwork
  • Offer some financing options
  • Professionally clean and detail the car
  • Offer road side assistance
  • Provide details on the car's history including CarProof/CarFax report
  • Have a track record with the local Better Business Bureau
If you are buying from an OEM Dealer (i.e., a used Mazda from a Mazda dealer), you will have access to services that are only available from dealers such as:

  • A Dealer's Warranty 
  • After Sale Service 
  • Choice of Vehicles  
  • Recourse such as Exchange Policy if the vehicle is not right for you
  • Clear Title Guarantee (vehicle will be free of liens)
  • Financial Assistance and access to multiple lenders
  • Extended Warranties (both factory and 3rd party)
  • You Can trade-in you current vehicle 
  • A Dealer's Compensation Fund for Consumers' Protection
What About Getting the Best Deal?
When you buy a used car from a dealer, do you really pay more than you would if you bought it privately?  Probably not!!  There are two important considerations, when buying a car or anything else. Quality and Price!

Consider the Quality 
Buying privately is simply buying "as is".  When you purchase privately, you're buying a car exactly as you see it. Any problems the car has will become your problems.  When someone is about to sell their car, it's usually because they're buying another one. That raises the question .... why?

  • Does it need extensive repairs? Has it been giving the owner frequent problems? If so, there's little likelihood that they'd spend the money to have it fixed ... and then sell it.  That doesn't mean that you can't get a good deal when you buy privately. There's certainly a chance that the car has been well maintained.  
  • Why consider a dealer then? What does a dealer offer you, if he purchases that same vehicle from the customer and then sells it to you?  First of all, he's going to have the vehicle thoroughly inspected and refurbish it both mechanically and, in the case of stains, rust, etc., appearance wise as well. It may need a complete repaint, if it's an older vehicle, or it might just need a quality touch-up.
Reconditioning costs are usually the largest part of the difference in cost between buying privately and buying from a dealer. The cost of refurbishing the vehicle, preparing it for sale and ensuring that you, the customer, will be satisfied with it.  Most importantly, when the dealer sells you the vehicle it's his responsibility to ensure that it's reasonably fit for your use.  With a dealer, you have recourse. With a private purchase you have little or none.

What about Price?  
It's true that dealers expect to make a profit on their sale but what about the private sale.  How does the private seller determine the price they want for their car? More often than not, they check to see what dealers are charging for a comparable vehicle and try to get as close to that price as possible. Often times they might even ask for more because, they may claim, they looked after the vehicle with Tender Loving Care. The TLC claim may be true or it may not!  Only a good mechanical inspection will determine that.  Regardless, they're going to try to get as close to what a dealer would ask for the car as they possibly can. That's just human nature.  

Everyone wants to try to get the best advantage they can. The private seller isn't selling the car to become your best friend.  In fact, you'll probably never hear from the person again. You're certainly not likely to buy another car from them, so they really have no incentive to ensure that you're a happy purchaser. That's not true of the dealer. A dealer not only wants you as a happy purchaser of that car, he also wants you to spread the word to your friends and relatives that he's a dealer that you're pleased with. Nothing beats a referral from a satisfied customer!

So, back to the question. Is it cheaper buying privately?  In the final analysis, it might even be more expensive.  A dealer's cost to repair a transmission, replace an air conditioning compressor or repaint a car will be well below what the average person will pay. This allows a dealer to refurbish a vehicle, make a profit and still be competitive with a private seller. When you compare a private sale with a dealer sale ... look at price and quality! 

Sunday, July 5, 2015

Mazda Ride & Drive Event Shows Off the New CX-3

One of the fun elements of working in the car business is the opportunity to see and drive the newest vehicles before anyone else can. Particularly in the case of Mazda where the manufacturer is so confident about the capabilities of its new vehicles (versus the competition) that it routinely conducts Ride and Drive events across the country for dealership personnel as well as inviting interested members of the public. Everyone gets to drive the latest Mazda product (in this case the new sub-compact SUV called the Mazda CX-3) under conditions and situations that can't really be replicated on a typical dealership test drive.

On the Toronto leg of the tour across Canada, I was able to shoot some video of the event and how the new 2016 Mazda CX-3 stacked up against some direct competitors including an interesting demonstration of Mazda's All-Wheel-Drive system. Take a look. You may be surprised...

CLICK on the video link (above) to watch the video in your browser and let me know what you think about this new introduction as well as your thoughts on All Wheel Drive.

Sunday, March 1, 2015

2015 Toronto AutoShow Video Report

The 2015 Canadian International AutoShow #CIAS2015 (otherwise known as the Toronto AutoShow) was held from February 13th through February 22nd this year. I attended the show on opening day and posted a video report on my YouTube channel a couple days later.
Every year this show gets better and this year there was no shortage of incredible innovations to dazzle, even industry insiders like me. If you missed the show this year, please check out the video below where I tried to capture some of the highlights. Enjoy.


Thursday, February 19, 2015

Why I Have a Love/Hate Relationship with the AutoShow

The Canadian International AutoShow (otherwise known as the Toronto AutoShow) comes around every February and for those of us who live in the Toronto area, it’s the automotive highlight of the year. This year it runs from Feb. 13 to 22. 

I love it because the glitz and glamour of the unveiling of new car models is hard not to get caught up in. The new cars that will soon be on the dealership lot, the new concept cars (that will never find their way to the lot), the new technologies, the crowds, and the whole “show biz” hype makes a dreary mid-winter month like February a little more tolerable. For those of us in the car business, it’s great to share the excitement with consumers at the show in a relaxed and no-pressure-to-sell (or buy) environment. A large percentage of the attendees at the car show are true automotive enthusiasts and, for a car guy, they are the most fun to connect with.

On the other hand, I hate the show because almost all of the great new reveals have been done earlier in the car show season which kicks off in September with the Los Angeles Show.  So, by February, we have seen the new arrivals in HD detail thanks to the internet. The show hasn’t even opened in Toronto and I have already “virtually” been in all the new entries via YouTube and thousands of 1080p photos. The anticipation has been lost and that’s probably what is most frustrating about the timing of the show and its position (near the end) of the show season.

If you are in the market for a new car, the AutoShow is a great opportunity to see all the new (and current) models in one place and talk to knowledgeable staff about the available features. It’s not that great if you sell cars for a living as a lot of people who might otherwise make a buying decision in February, often postpone their decision until they have been to the show. If that description fits you, I look forward to seeing you in March (which is the point when the car business usually kicks into high gear).

Sunday, September 28, 2014

What Happens in the Business (F&I) Office

I sat down recently with the Financial Services Managers at our dealership to talk about what really happens in the Business Office after a customer agrees to purchase a vehicle and has agreed on the vehicle and price.

Those of you who have purchased vehicles may dread this part of the sales process as it has traditionally been the point at which dealerships try to maximize the profit on the vehicle just sold (or recover profits lost through a vigorous negotiation prior to coming to the Business Office). With the more educated car buyer in this era, the business Office has become the point where customer service scores can either be enhanced or dashed.  That's why there is now an air of openness and transparency that has not always been the operating theme of the office.

The first role of the Business Office is to make sure that the agreement you have come to with the sales person is fully and accurately translated to the purchase agreement.  It's the Finance (Business) Manager's job to make sure there are no misunderstandings and that everything agreed to is in writing. That's the law in Ontario and it's designed to protect consumers.

Whether you are leasing, financing, or just paying cash, we are required to walk you through all the banking arrangements, obtain all the information the bank will need (if you are leasing or financing) and generally answer any questions on your financing options, interest rates, and credit situation.

We also have a responsibility to the manufacturer to let you know what OEM programs you qualify for and how your can take advantage of their extended warranty program to customize the available protection for your new vehicle to your specific driving profile.

Your auto insurance company can take care of making sure that your new car is adequately insured, however, since our financial services managers represent all the major financial institutions and insurers, we can also provide competitive programs on loss of employment coverage, long term disability coverage, and related products so your car payments are taken care of in the case of accident, illness, or job loss.

The Business Office also takes care of setting up the licensing of your vehicle so you just worry about getting to the dealership to pick up your new car.  The Financial Services Manager will also have your lease or finance agreement prepared and ready for you to sign on delivery day.

It's often called the F&I office (finance and insurance) but it's more accurate to call it the Peace of Mind Office because its objective is to help you through all the technical aspects of your purchase so you can count on a worry-free ownership experience.