Category Archives: Auto Industry Updates

What Are Good Questions To Ask When Buying a Used Car From a Dealer

When shopping for a good used car, one that looks good, and one that should serve my needs, there is a lot that I don’t know about it, but I would like to know.

  1. Is there a vehicle history report available like Carfax or Auto Check that will disclose any reported accidents or damage?
  2. Has the seller inspected the vehicle carefully? Is there any unreported damage?
  3. Does a vehicle history report show how much maintenance or normal repairs have been done?
  4. How many owners has this vehicle had?
  5. Has the required Maryland State Inspection been performed? 
  6. Did the State Inspection disclose any repair work that is needed but not done?
  7. How much life is left on the tires and brake linings?
  8. What kind of warranty comes with this vehicle?
  9. Can I purchase a vehicle service contract to protect me from any major breakdowns?
  10. If the vehicle is involved in a serious accident and is declared a total loss, will my insurance pay off my amount financed?
  11. Where did this vehicle come from?
  12. Is there any indication that a prior owner might have been a smoker?
  13. If this car is an auction purchase, was it sold with a green light or sold with any conditions?   

What is the Best Way to Buy a Used Car?

In truth, the best way to buy a used car is to purchase it from a friend, a relative, a co-worker that you know well and trust. In this way, you should have full access to the vehicle history. You can learn first  hand about any accidents, breakdowns, major repairs, and  how well was the vehicle maintained?

The great majority of Buyers will research online for the year, make and model that will best sit their needs. Do not let price be the determining factor. The vehicle with the lowest price is probably low for a good reason. Price is important, but value and condition are much more important. 

Where is the vehicle (and the dealer) located? Is it 10 miles away or 100 miles? If you need to return the vehicle for a needed adjustment or repair, will it be convenient, or will it be a hassle?

The selection of the dealer is just as important as the car itself. Does the dealer have a good reputation? Does he have lots of positive reviews posted at third party sites. Does he offer a large selection and convenient financing terms? Does the vehicle come with any warranty or extra benefits? How long has the dealer been in business?

All used cars and trucks are unique. There are no two that are exactly alike. One cannot assume anything about a used vehicle. You have to see it and drive it to make a good purchase decision. 

What Happens When You Trade in Your Car to a Dealer?

If a customer is in the market to purchase a new or used vehicle, he probably has a car or truck that he wants to trade in. While he may have surfed the net and completed his search about what vehicle to buy, what dealers to consider, prices and other concerns, there are several important steps that he should take to maximize the trade in allowance that his dealer will give him. 

While the customer may not need to purchase a Carfax report on his own vehicle, the dealer most probably will. The customer must be aware of any reported accidents or damage, as the dealer will want to use that data to justify a low appraisal value. In this regard, the customer must be realistic in his expectations. 

There are several things that the customer can and should do to maximize the appraisal price. He should google his own vehicle to see what dealers are asking for comparable vehicles. The appraisal value quoted will not be the retail asking prices he sees online; rather he will receive a wholesale price- one much closer to the auction prices that the dealer might pay at a used car auction. And, that number will be further reduced by any mechanical, body, or appearance work the vehicle needs. In this regard, the customer should have the vehicle as clean and shiny as possible. Make it easy for the appraiser to like the car or truck. Don’t give him any reason to knock the trade in value. 

The appraiser will also be looking at prices online, both retail prices asked by other dealers, and wholesale activity for similar models. Again, his final appraisal price will be reduced by any reconditioning that is needed. If the customer has repair orders proving that the vehicle has been well maintained, and that all needed repairs were done, this should support a more favorable valuation.

Fixing a value on the trade in is just as important as fixing the value on the vehicle to be purchased. Most customers spend too much time worrying about the price to be paid for the new vehicle, and not enough time justifying the highest possible trade appraisal. 

The dealer will want to know if the customer has the title to his vehicle. If not, the dealer will call the bank or finance company to ascertain the unpaid balance on the auto loan. Any amount still owing will be subtracted from the appraisal. If the lien payoff is greater than the appraisal value, the customer will need to pay the overage.

If the customer has a vehicle service contract or extended warrantyon his vehicle that has not expired, he can request a cancellation of the contract and obtain a pro rata refund. If 80% of the time or mileage has expired, he should receive a 20% refund of the price he paid years ago. This would help meet his required down payment. The fact that he had a service contract or extended warranty will give the appraiser some confidence that the vehicle should be free of any major problems. 

Is It Hard To Sell A Car Privately?

If the purchaser of a new or used vehicle has a trade in, he must decide whether to sell it privately or trade it into the new or used car dealer. While the majority of customers will decide, for several good reasons, to trade their vehicle in, there are a number of people who will opt to sell privately. The subject of trade ins is a large and complicated one. This blog will address some of the difficulties to be expected in a private sale. The benefits of trading in the old vehicle are detailed in a blog entitled “Advantages of Trading In Your car” at Trust Auto in Sykesville, MD.

In order to conduct a successful sale of his old vehicle, there are several things that should be handled. The first challenge to the private seller is to try to determine the market value of his current vehicle – what is a reasonable asking price? For this he must perform some diligent research, looking at similar vehicles listed at dealer websites and third-party searchers like Google or CarGurus.  From the average asking prices he must subtract what it will cost to fully recondition the vehicle, both mechanically and cosmetically. A professional detailing job will take about four hours and cost $150 or more. 

Next he will need to prepare a VDP, or vehicle detail page, a full description of every aspect of his vehicle. The more information that is provided the better. Help the prospective buyer to better visualize the car or truck. Several good photos of the inside and the outside will be needed. If the seller is going to find a buyer, he will need to place a classified ad with one or more of the classified automotive listing services such as Kelley Blue Book, Edmunds, TrueCar and many others. These services cost money, and a prime location that offers better visibility can be expensive. The objective is to help a buyer looking for a particular vehicle be able to find the sellers car or truck, click on that vehicle, read about it, see the photos, and be interested enough to call or email the seller for more information. If and when they do communicate, the buyer will ask all the usual questions that he would ask a dealer. And, he will need to be satisfied with the answers, to the point that he is willing to visit, inspect and drive the vehicle. 

If the vehicle passes the buyers inspection and he wants to buy it, the parties must agree on the price and how it will be paid. In almost all cases, the seller should require payment in cash or certified check. The seller should limit his future liability by selling the vehicle “As Is”, with no written representation about the condition of the vehicle. Private buyers are notorious for failing to show up for an appointment. If they want to buy it, their first offer will usually be much lower than the asking price, so the seller must be prepared to negotiate. 

If and when agreement is reached, the seller will need to produce the ownership title. If there is a bank lien on the title, he must call the bank, request a payoff amount and instructions for processing the payoff and getting the title. This will take several days, and maybe longer. When the seller receives the title from the bank, he should complete the assignment, including the buyer’s information, and take the title to the DMV to complete the transfer. Until the DMV processes the name change, the seller remains liable for any loss caused by the vehicle. Therefore, all insurance coverage must be kept until the transfer is complete. Any delays will extend the sellers legal liability. 

If the seller has an extended warranty or vehicle service contract on his car or truck, this could greatly facilitate the sale. Most warranties and service contracts are transferable for a small fee, and this will give the buyer much more confidence in completing the purchase. This is one of the many benefits of buying a service contract from a dealer when the seller makes his new purchase. There are many reputable service contract providers today, and Trust Auto in Sykesville, MD, works with several of the leading companies.

How the Internet Changes the Way We Sell (and Buy) Cars

A decade ago, it wasn’t uncommon for a car salesman to spend 6-8 hours with a single customer.  They would show the customer 3-4 vehicles, answer broad questions regarding the make, model, and basic amenities, and guide them through a very choreographed sales process.  

Fast forward to today, and the sales model has completely changed.  People spend approximately an average of 2 hours at a dealership when they go to make a purchase.  

Why?

Because of the internet.  

The Internet Changed the Process

Years ago, the sales process consisted of 5 clear and defined steps:

Enter → Research → Dealer Visit → Decision → Ownership

It was a very linear path and oftentimes, the research was done simultaneously as the dealers visit, when the salesman would inform the customer on vehicle stipulations and the differences between makes and models.

Nowadays, the process is much more fluent and the research is done independently by the consumer. There is a self-serve mindset that allows the customer to receive instant information about the vehicles they research and compare.

This is due to the rise of mobile devices.  

Over ⅔ of auto shopping is done on mobile devices because the consumer is always shopping. The average American touches their phone screen 3,000 times in one day, meaning the ability to look at cars and conduct research can happen all day. Anytime, anyplace. 

 mobile users

The internet provides an immense amount of transparency when it comes to cars and MSRP pricing, so there is less haggling and negotiating and customers know that if a dealership won’t give them the price they found online, they can go somewhere else.  It’s a Buyer’s World, instead of a Seller’s World.

Old selling tactics won’t work in today’s car-buying society. So both consumers and dealerships need to understand how this process has changed and how the system works to be effective for everyone.

How Has the Sales Process Changed?

  1. Consumers start with more information

Thanks to the internet, auto shoppers start the process with more information than ever before.  In fact, 42% of customers know the make and model of the vehicle they want to purchase before even setting foot into a dealership. 32% know the dealership from which they are going to purchase a vehicle.  This means dealerships have gotten more competitive in their advertising because they aren’t just selling cars anymore – they’re selling their services, their sales team, and their dealership as a whole.  

Because users know more information before even starting the initial research step, the urgency to buy has increased.

2. Consumers look for maximum transparency

During the research portion of the car-buying experience (that is now a constant, ongoing process thanks to the “always shopping” mentality), people are visiting an average of 12 auto touch-points before making a final decision – and this doesn’t include advertisements seen on social media or online.

Because consumers are spending more time researching and conducting more thorough research on auto websites and 3rd-party platforms, it’s important that a website provides the most information possible – including pricing.  

80% of buyers are looking at prices first during their research process.

Most websites only provide approximately 40% transparency and consumers are being more selective about which dealership they use. So it’s crucial to auto dealerships that their website be top notch (and mobile responsive) in order to compete with other dealerships in their area.  

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3. Consumers need validation when choosing a dealership

Inventory variety and vehicle pricing make up for 50% of why a consumer chooses a specific dealership when going to make a purchase. And one of the most important factors is knowing they aren’t getting ripped off.  

Consumers need price validation.  

This is critical for locking down customers and creating loyalty in your buyers. Everyone wants to know they are getting a good deal. When a consumer is at a dealership, it’s likely they are looking at the same vehicle online, whether it’s on a  manufacturer’s website or a competitor’s website to make sure they are getting the best deal possible. And they aren’t afraid to go elsewhere if a dealership won’t match the price. Make sure your sales team is providing a coherent and comprehensive experience – your online information must match what is being presented in person.  

Dealerships need to be aware of how they reach out to potential customers during the early stages of the process, because that will ultimately affect their decision to make a purchase or not.  Consumers want to be contacted in a way that is most convenient and comfortable for them – if they reach out via text, email, or Facebook, respond to them using the same method of communication.  This puts the consumer in control, which is vital in converting a lead into a customer. They choose the method of communication – it’s the dealership’s job to present the right information at the right time.  

4. Consumers visit fewer dealerships and take fewer test-drives

The decision process is one that consumers make quickly after completing their own thorough research.  

In fact, on average, Americans contact 3.1 dealerships, physically go visit 2.1 dealerships and only 1.6 test drives before deciding which car to buy. Because they already know the make, model, and dealership before going to purchase a car.  This ties back into the first step of the new sales model, making sure you are selling the actual dealership instead of just cars.  Make your dealership appealing and trustworthy and the sales will come. Have a positive online experience that offers full transparency and the sales will come.  Provide your users with all the information required to make an informed decision, and the sales will come.  See a pattern?  

Because consumers are doing most of their car-buying process before even setting foot into a dealership, it’s important that dealerships offer a pressure-free environment and deliver a simple, fast purchase experience. All while providing full transparency.  

It’s simply a matter of how consumers are purchasing vehicles and how dealerships are adapting to those changes and how the sales process as a whole is changing to fit the needs of consumers.  

Dealerships are competing more avidly with local competitors and now, they’re even competing with interaction-free car-buying experiences.

How has this shift affected the way you buy or sell a car?