If you’re like 95% of car buyers, your journey starts online. Typically, you begin by perusing elegant manufacturer websites. Next, you start investigating third party sites where you can get information regarding “real” pricing. Next, you might visit dealership sites to get a sense for local inventory availability. And at some point, you will head down to your local dealership to scratch, sniff and drive the cars you’re considering – because automobiles are that most sensory and experiential of products. Equipped with some online research and your smartphone, you start visiting dealerships to test drive cars. Per Polk Automotive, you spend 12 hours shopping at car dealerships on average, and you spend four and a half hours buying at a single car dealership on average. Barring some acute need for a car (an accident, a new commute, a sudden move) that might accelerate your purchase timeframe, your process typically takes two to eight weeks, with a median of four weeks. Let’s examine the process from the dealership’s side of the fence.
Dealers are under the gun to hit monthly sales volume quotas set by manufacturers, and if they do not, they often take operating losses and suffer inventory reordering consequences. As a result, dealers spend marketing dollars across countless digital and traditional channels to win your business. Per the National Association of Dealers of America, the typical dealer’s gross margin is $1,500 per car, and the typical dealer’s marketing expense eats up more than half of that ($800 per car). Why should you care? Because those marketing dollars affect your purchase price.
In November 2012, I stood on stage at TechStars Demo Day in Seattle and made a promise (to Geekwire’s John Cook, among others). I promised a service that would revolutionize car buying and selling. However, since launching in the summer of 2013, our focus has been on the first fraction of our promise. This summer, we are fulfilling the rest of our claims.
To recap, this was the promise: test drive from your doorstep, buy from your iPad, get the best car prices.
Test driving from your doorstep = TRED is the easiest way to shop. We still allow our shoppers to test drive at their doorstep, only we have increased our dealer range from 20 miles to 30 miles and we have made the service completely free to shoppers (by the way, our service is now free). Moreover, you can test drive as many cars as you want, and up to two at once. Check.
Buying from your iPad = TRED is the easiest way to buy. Once you know what you want to buy, at TRED.com you can estimate your deal terms (including your trade in, which we’ll value within about an hour and come to your home or office to buy), apply for credit, get finalized approval and set up an appointment to sign for the car. Check.
Best car prices = TRED is the cheapest way to buy. We know what matters to you most – price. For every vehicle you browse on TRED.com, we provide a TRED Tag that indicates the lowest purchase price at a dealership. No haggling, we’ve already done that for you. Moreover, we revolutionize dealership efficiency and pass the savings on to you. Our dealers circumvent much of the cumbersome overhead associated with the typical car sale since our customers don’t spend half a day on their lots. We also charge dealers a modest subscription fee for access to our portal, it is not directly impacted by whether you purchase a car, and it is a fraction of what our competitors, such as Costco, USAA, Truecar, KBB and Edmunds, charge dealers.
In fact, we save dealers so much money that as of this month we’re able to offer our service to you for free (in case I haven’t mentioned that yet – our service is free).
Promise kept. Better late than never.
Shopping questions? Dealer concerns? Not ready to test drive yet but have car questions? Feel free to Tweet in our general direction @TRED, to take our “TRED Test” (coming soon), to give us a jingle at 855-795-TRED, or to shoot us a note at firstname.lastname@example.org.
Happy Fourth of July, and happy car shopping. We hope to see you soon.