Third-Party Auto Website Executives Offer Insight on Business Models

Automotive Marketing Roundtable 2013 DSC_4280-SThird-party automotive website executives offered their observations about vehicle price transparency during a panel discussion at the October J.D. Power Automotive Marketing Roundtable (AMR) in Las Vegas, NV. More excerpts from the panel discussion that was moderated by Joel Ewanick, former automotive marketing executive and now managing partner of Global Auto Systems, are highlighted in today’s post.

 Moderator: Joel Ewanick, managing partner, Global Auto Systems, Inc.

Panel Members:

Seth Berkowitz, president and COO, Edmunds.com

Larry Dominique, executive vice president, TrueCar, Inc.

Jared Rowe, President, Kelley Blue Book

Alex Vetter, senior vice president, Cars.com

Joel: You’re very different in how you collect your data—so tell me Seth (Edmunds) why is your data so much better than their data?

 Seth (Edmunds): “I guess we see ourselves across the panel as being least competitive with Cars.com. We respect what they are doing: with the classifieds industry and what they have done in used cars—that’s not really our core space. That might change in the future. I think our biggest differences are with TrueCar and with Kelley Blue Book. . . While we were the company 20 years ago that introduced invoice price, and published it for the first time, we’re actually moving in a completely different direction. . . We are going to have dealers provide actual prices on individual vehicles and then we are going to tell what other people are paying. We have our Price-Promise program, now where you get those actual prices. . . Over the coming months, you’re going to see invoice stripped off behind warning labels where you have to click to get it because we believe that it’s not servicing people anymore and it creates confusion.”

Alex (Cars.com): “Putting a price on a transaction that we know is wildly complex creates distrust in the industry. The expectation that this is the price you are going to pay—is not something that any website [represented] here can actually deliver because so much goes into the pricing at the retail store. We rely on dealer participation to drive that pricing.” Continue reading ›

US Market: Trade-in Percentages Up, Lower APRs Remain Popular

Grace Hamulic

In October 2011, more than one-half (53.6%) of all new-vehicle deals included a trade-in, up from 49.9% of deals in October 2010, according to Power Information Network® (PIN) retail transaction data from J.D. Power and Associates. It’s noteworthy that during the past year, PIN data indicates that the percentage of trades with negative equity (amount owed on trade-in that is greater than the vehicle’s value) continued to drop. About 22.5% of trade-ins were upside down in October, which was down from 23.2% in the same month a year ago. The new-vehicle sales outcome in October was brighter this year than a year ago.

A few more highlights gleaned from PIN retail transaction data in October this year vs. the same month in 2010 are summarized:

• It’s likely that more buyers and lessees replaced their current older vehicles in October 2011, since the average age of a trade-in from all nameplates rose to 6.5 years from an average trade-in vehicle age of 6.4 years in October 2010. The trade-in vehicle age does not appear to have changed much.

• Interestingly, the age of luxury vehicle trades in October 2011 was younger than the industry overall—averaging 5.3 years old vs. 6.5 for the industry. Continue reading ›