Death of a Car Salesman

06.04.2016

Written By: Anthony Martin

Tags: , ,

In its Ultimate Guide to Life from last year, the Daily Mail lists “buying a new car” as one of the main life events everyone goes through. It appears at 22 years old, one year after “going on holidays with friends” and one year before “be a bridesmaid or a best man”.

Regardless of our opinion of the Mail’s views on the world and what a normal life looks like, we must agree that buying a car always feels somewhat momentous. It’s an important part of how we project ourselves to the world, a relatively large investment, and can define how we’ll spend a good part of the next few years. It usually starts with trepidation, and ends with a combination of elation and new-toy feeling. But in the middle of the process lies a part no one wants to go through: The car salesman.

A recent UK-wide survey found that 4 out of 5 consumers consider car salesmen as a whole to be untrustworthy. This is a staggering statistic considering how ubiquitous they are, and how aggressively competitive the market is. Much ink has flown over the decades as to why this profession has the culture it has – but the facts are here, that when recounting the story of how they bought a car, ‘the salesperson was wonderful’ remains the rare exception rather than the rule.

It is then only natural that new solutions would appear over time to try and work around it altogether. Listings such as Craigslist and Gumtree are replacing newspaper classifieds, but now feel far less trustworthy than car salesmen. But once dissatisfaction with this method became clear, more robust alternatives started appearing.

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Beepi.com offers a guaranteed purchase price, not only to the buyer, but to the seller. Their offer: once a car is listed on the website, it will sell at the guaranteed price within 30 days (and they will buy it if it doesn’t). They also guarantee to the buyer that their car will be in absolutely perfect condition, with a 10-day money-back guarantee. In practice, that means that Beepi conducts a 185-point inspection and complete background check of the vehicle before listing it, and end up turning away roughly two out of three.

Instamotor is a mobile app that aims to help facilitate peer-to-peer transactions. Their angle: buyers get a free car inspection, Carfax report, and a 3-month, 3,000 miles guarantee. They also offer to verify cheques instantly through a picture of the check (most second hand cars in the US are still bought with cheques) so that offers can be accepted and final instantly.

Mojo Motors takes a different approach: it lets users follow the price of particular models with any number of dealers at once, and sends automated alerts for price drops or when specific price thresholds are crossed. It then offers a direct way to book a test drive, and even special discounts from dealers for Mojo Motors users.

All these and many others are starting to disrupt this very well established industry. The anchor point to the old sales system (the dealership) is still prevalent, but for how long? Tesla has just unveiled its Model 3 with a starting point lower than the average new car in the US, and is sticking to the direct distribution model. This directness is what has let them maintain full control of the purchase and product experience, with results not dissimilar to what Apple achieved with the iPhone ten years ago.

How long until other high-end manufacturers start reclaiming some control? How long will the newest generation of consumers be content to go up to suburban dealerships, and haggle for weeks on end?

Consumers overwhelmingly expect brands to take more responsibility and ownership of their products, and this increasingly extends to maintaining full ownership of the technology even after the sales. Next week, we take a look at the implications for the beloved relationship between man and machine, in No More Tinkering.

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