“So, Did You Buy the Car, Dad?” A Look at How Tech Spend Really Does Matter (Part 1)
Spend Matters welcomes another guest post from David C. Wyld, Professor of Management at Southeastern Louisiana University. This is Part 1 of a two-part series.
OK, I fell for the hype! Bowing to peer pressure from the “decision-making majority” in my house (my wife and teenage sons) and the endless Michael Bolton ads reminding me that it was “Happy Honda Days” and that the Toyotathon was on, the strategic decision was made that it was time for the “Family Truckster” to be put out to pasture.
So, knowing the general shape and size of car that we needed in order to fit the four of us in anything less than a “crowded subway car” feel, my wife and I began to do the “due diligence” to find what we wanted - and what we could afford. Together, we were ready to buy our first car of this decade.
Since it was close to 2014, I expected the car buying experience to have changed greatly since I last bellied up to the bar in 2005. After all, didn’t the Internet change everything - car buying included? Much had indeed changed in almost a decade, as now I could use all the information gathering tools that made me a far-more informed buyer than in the past. Now, you could instantly see the Kelley Blue Book value of your car (and yes kids, there was a time when the blue book meant a physical book from the bank and the dealer that gave the price of your trade-in, and they would tell you what they thought it was according to this biblical reference guide).
Now, with one Google search, you can instantly access a variety of websites that provide you with reviews on every aspect of each model - and each variation of a model and each model year for those trim levels, rather than having to comb through dealer brochures and copies of Consumer Reports and automobile magazines to find info on the car you were interested in. Furthermore, you could scan each dealer’s inventory online, learn about what incentives are offered, and even access the dealer’s invoice prices - the “holy grail” of car buying information. Online research definitely helped us to greatly narrow the range of options, and after a few visits to dealerships of different makes, we settled on the vehicle of our choice. Now, all we had to do was actually buy this beautiful, gleaming rolling hub of technology that also happened to have an engine.
Yet, when I got to the actual dealing, what I experienced surprised me a great deal. Even though “Randy,” the seasoned - and smoky - salesperson knew that I had done my research, and even though with a few vital pieces of information from my wife and me, he and the dealership knew as much about me as The Gap did about Tom Cruise in Minority Report, the actual buying and financing process still worked as slow today as it did a decade ago.
The negotiations still took several rounds of passing a sheet of paper back and forth, with initial offers and counteroffers on the price of the new vehicle and the value of my car (which, thanks to Carfax and the wonders of the onboard computer, enabled the dealer to have instant access to the complete history of our car and the 121,000 miles it had traveled). While the salesman and I thrust and parried our various positions, the whole process was really being steered by the mysterious, unseen, wizard-like figure: the sales manager. Finally, after much time talking and waiting for our salesman to go “off to see the wizard” to verify what he could and could not agree to, we bought the car.
Well, we had not quite bought the car; we had merely agreed to a price. Just as generations of car buyers before us had done, we were then escorted to the finance manager’s office. Once we were introduced to “Joe,” and confirmed that yes, we had all had a great Christmas, the sales process reignited. Now we were being told that our new investment would not survive out on the cold, lonely highways it was about to encounter without an extended warranty. After we resisted most of the pitches, we were pleasantly surprised to learn that Skynet had told the dealer that we could get the advertised 0.9% interest rate on the car. From that point, it only took about 45 minutes more for the finance manager to generate the paperwork and go through a signing process that was tantamount to that of a house closing, before we could actually get into the car. Total time elapsed: five hours.
The finance manager and I got to talking. I had learned early on that he graduated from the university I teach at, Southeastern Louisiana University. He had obviously done well in his career to date, having worked as a finance manager at four different dealerships with three different car makers over the past decade. Putting on my professor hat, I asked him to help me with a question. I told him that I was surprised at how little technology changed the buying process—the real, end-game process, as opposed to helping both sides become more informed about the process.
There was still the back and forth of offers on a sheet of paper, the pretense that the dealer had more information than the customer, and the centrality of the sales manager in the whole process (with delays waiting on him to make decisions that affected - and really overrode - the salesperson and the customer’s conversation).
To be continued! Check back later today for Part 2.