CARS, Inc. IN THE NEWS

Technology Provides Added Transparency in Marketplace

Auto Auction Shopper
By Jim Stickford, Used Car News Staff Writer

January 7, 2008 - The Internet will continue leveling the playing field between both new- and used-car dealers, and dealers and the public.

A decade ago people were saying consumers wouldn't buy a new car via the Web. When that happened people said they wouldn't buy a used car.

One reason for this change is increased transparency. There were limits on how much consumers could know about dealers and the cars they bought. Today, consumers can search online to find out everything from the invoice price of a car to what other consumers think of a particular dealer.

"Reviews started with franchise dealerships and that's now rapidly translating into the used-car side," said John Possumato, the founder of Philadelphiabased Driveitaway.com.

This trend can pay off for used-car dealers, Possumato said.

The public's image of the independent used-car dealer is often negative, he said. Positive consumer reviews can change that.

"As people feel more comfortable with online reviews, independent dealers who have good notices will benefit," Possumato said. Unethical dealers who were able to stay in business because they advertised heavily and were constantly attracting new customers are in trouble.

The good dealers who have a loyal customer base will rise to the top, while dealers who don't care about repeat business should find it more difficult to get new buyers through their doors, Possumato said.

This kind of consumer review reflects a larger trend, Possumato said. Social networks such as My Space and Facebook are having a real impact on how people use the Internet. He sees businesses adapting the social network model for their own purposes. "I see all the elements that create good social networks available to dealers," Possumato said.

He foresees dealers interacting with consumers and each other the same way as other sales professionals, such as real estate agents. There are already sites that allow members to talk about cars and vehicle service in a community format.

These sites present dealers with a real opportunity to show themselves off to the public.

"I can go to any city in the country and find a good restaurant by checking its ranking on the Web," Possumato said.

"You can't do that with a dealership yet. But we're seeing it beginning to happen. The latest marketing trend dealers are embracing is video.

Everything is moving to video on the Web. "I see video taking over," Possumato said. "Youtube has trained us, and let's face it, people don't read as much as they used to. People would rather watch a video than read a page."

A major function of the Internet for dealers has been lead generation.

Mike Spadafore, director of consumer and commercial marketing for R.L. Polk, expects that dealers will see some relatively significant steps in how leads are managed in 2008.

The big players want to do more than just provide dealers with leads, he said.

They want to provide other services and follow the leads through a dealership's entire sales process. These providers will offer additional services, such as consumer follow up in any medium the dealer chooses, Spadafore said.

This could include phone calls, e-mails or even direct mail.

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