Auto Shopping Made Painless
Independent 'coaches' don't have brand loyalties
Published in the Mississauga News, Aug. 25, 2004, Written by James Riswick, Formula Publications
Almost anyone who has shopped for a car knows the feeling. You pull into the new-car dealership lot and get out of your current car to check out a potential buy. Very quickly you begin to feel like a sea bass in shark-infested waters as salesmen begin circling to ask the inevitable: "How can I help you today?"
You then go on a test drive and take in the salesman's schpiel about how wonderful the car is that you're driving -- be it a Lexus or a Lada. Maybe this car seems like the one to buy, so you sit down with the salesman and begin negotiating a price. After mark-ups, premiums, destination charges, documentation fees and whatever else they may cook up, you drive away with your new car having paid way more than you'd planned and not quite knowing why or what went wrong.
There's a reason why Lee Iacocca once said, "Car buyers would rather have a root canal than have to go through the process of buying a new car."
Although the above car-buying nightmare is hardly accurate for most dealerships, this is nonetheless the stereotype that goes along with buying a car. At one point, some irritated car buyer must have asked, "can't somebody else do it?" Well, thanks to vehicle purchasing consultants, the answer is now 'yes.'
Services like Car$mart and Automall Network offer customers the opportunity to avoid the hassle and occasional dread that many associate with buying or leasing a car. You tell them what you want, how much you want to pay and they do everything else -- even in some cases delivering a new car directly to their customers' driveway.
"People like having an independent 'coach' who doesn't have allegiance to one brand or product," said independent car purchasing consultant Bob Davidson. "People like having an independent, informed person working for them, helping them shorten the research process."
Perhaps more importantly, purchasing consultants also help clients get the lowest price possible for a new or used car, which is Automall Network's main concern. Although they can make suggestions as to what car or truck could be the right one, customers usually come to Automall Network with a vehicle already in mind. The consultant then starts searching amongst their network of 450 dealers for one that will offer the best price on the client's car-of-choice.
"We leverage our relationship with the dealers," Automall Network president Viraf Baliwalla said. "They treat us like an elite customer and we pass on the savings [to our customers]."
The advantages aren't just a one-way street, though, dealerships that work with car purchasing services benefit as well.
"They alleviate myself of all the qualifying involved with a prospective buyer, which is why we offer them a discount rate that's a no-haggle type of price," said Vito Polera, a salesman at Bramalea Toyota who has worked with Automall Network on numerous occasions. In fact, 40 per cent of his business comes from car pricing services and brokers. "It works out for both parties."
Buying a used car with Automall Network works in a similar way as buying a new one, as consultants take their client's desired car request and send it out to dealers. Any one with a match lets the consultant know and clients are usually in their car within a week or two depending on the rarity of the vehicle, Baliwalla said. This service allows consumers to avoid the process of going from lot to lot or scouring through automotive classifieds.
"When people go about car shopping, it can be a tedious process," Baliwalla said. "They get sucked into paying a lot of money for a vehicle. We help them make informed decisions ... People make decisions based on what dealers say, which isn't necessarily in the buyer's best interest."
Baliwalla recently negotiated a price of $33,500 for a 2003 GMC Envoy XL with an asking price of $38,195 as well as bringing down the price of a 1998 BMW M3 from $39,200 to $36,700. For new cars, he said Automall Network's clients often only pay a few hundred dollars over the dealer's invoice cost.
For Car$mart founder Jim Davidson (no relation to Bob), it's all about getting the wholesale price for a vehicle, which is usually $300 over invoice.
"I look at the real numbers versus game numbers like MSRP," Davidson said. "I get rid of 'if I could offer you this, would you buy this car today?'"
Davidson and other Car$mart affiliates throughout Canada go one step further by providing a much more personal service, and for a flat rate of $500, does assist in the selection of their customers' new vehicle choice (they don't deal with used cars).
Car$mart affiliates like Davidson will look at his client's driving needs and budget limitations and recommend several vehicles that fit. He then can arrange "personal" test-drives, including taking a car to a client's driveway to test. Once a vehicle is chosen, he goes about finding and negotiating the best price, then after getting the okay from his client, seals the deal. Davidson can even deliver the new car directly to his client's home. Basically, the client never has to see the inside of a dealership.
"That's the side of the business people love," Davidson said, "the convenience." And the savings as well, no doubt, as he estimates that including his fee, clients usually only pay $800 over invoice.
Davidson also said that he has helped purchase cars that were new to the market and that would have commanded a premium over MSRP. Although he can't promise the same savings on such "hot cars," the dealer usually pays his fee in these instances and the client benefits by avoiding the premium and getting a "hot car" months earlier than they probably could by themselves.
But price negotiators like Automall Network and Car$mart might soon be obsolete as manufacturer programs like Access Toyota are introduced across Canada. Beginning July 19, prices for new Toyotas will be set throughout a region's participating dealerships. People will no longer have to go from dealer to dealer searching for the best price -- it will be the same everywhere. Even selection and comparison services similar to those provided by Car$mart will be available online from Access Toyota.
"We will be offering the public a no-haggle price that will be voted on by dealers," Polera said. "The worst part of the buying experience is haggling the prices, so we've fixed the prices so people won't have to call around. You can feel comfortable knowing the price you pay is the same everywhere."
Depending on the success of Access Toyota, other manufacturers could offer similar programs. With prices uniform no matter what dealership a shopper stops by, the cost advantage of using a purchasing consultant could theoretically disappear.
What would perhaps always remain, however, is the need of some car shoppers for an impartial car expert who can make recommendations of what vehicle is best for them. For those who are intimidated by the car-buying experience -- or just put off by it -- services like Car$mart will still be useful. Because for many, even with car purchasers and programs like Access Toyota, buying a car is still about as much fun as getting a root canal.