Navigating transparency

Posted by

Dealers continue to make strides in improving transparency. But is it fast enough to meet consumer expectations?

The consumer demand for increased transparency is no longer about how dealers are responding to the issue, but rather where they are at in the game.

They have observed how companies like Airbnb and Zipcar skyrocketed to success by putting the customer in control of business transactions, and how the retail industry’s top dog, Amazon, has ensured that there is very little mystery when it comes to the price consumers pay for a product, and related costs.

Many carmakers, dealers and other industry-related businesses have taken significant steps to adapt to consumer demands by implementing strategies that provide customers with exactly what they want: more visibility into the car-buying process.

“Dealers are moving ever closer to providing clear and transparent prices and terms on new and used vehicles,” according to Dale Pollak, dealer, technology entrepreneur and best-selling author.

Pollak is the chairman and founder of U.S.-based vAuto, a company that helps dealerships appraise, manage and price pre-owned vehicle inventory. He’s also the author of several books, including Like I See It: Obstacles and Opportunities Shaping the Future of Retail Automotive, which touches on the importance of efficiency and transparency in the auto retail industry, and offers practical solutions for dealers.

Pollak says that dealers are addressing the need for more transparency in their digital retailing efforts, which allows consumers to know vehicle purchase variables like the price of the vehicle, a trade-in value, monthly payment and the cost of F&I products before they agree to buy a car. He considers this to be a “dramatic shift from more traditional showroom sales processes that sought a buyer’s commitment to purchase before addressing the vehicle’s price and related particulars.”

“Today, there are more dealers who are one-price, or effectively one-price, in used vehicles than ever before. The same pricing transparency is becoming more and more true in new vehicles,” says Pollak. “In some cases, like Hyundai of late, manufacturers are encouraging more transparent new vehicle pricing. The market’s much different than it used to be, and most dealers understand a higher level of transparency is essential for success.”

Hyundai’s Shopper Assurance program, introduced this fall, is expected to modernize its U.S. car buying experience by providing consumers with more options and greater convenience than the traditional vehicle-purchasing process at a dealership.

The market’s much different than it used to be, and most dealers understand a higher level of transparency is essential for success

The program focuses on four elements — one of which is called transparent pricing. The automaker wants dealers to post the fair market price of a vehicle on their company website to help reduce price negotiation time and any frustration related to advertised incentives not offered on dealer sites.

Other carmakers, like Kia, have also increased their efforts to provide car shoppers with more information about the vehicle purchasing process and dealership products. The company teamed up with marketing-tech and conversational commerce platform provider CarLabs and its digital agency Ansible to create an artificial intelligence-powered virtual assistant known as Kian.

The AI-driven chatbot offers consumers information about dealership products, local inventory, current prices and offers, and certain vehicle comparisons — and all through the Facebook Messenger app. Kian’s access to loads of data allow the chatbot to answer specific questions about hundreds of topics, quickly and efficiently.


Manufacturers and dealers are not the only ones moving things forward in the name of transparency. Companies like CARPROOF are also doing their part to help dealers, consumers and the overall industry.

They did this more than two years ago by introducing a Transparency Advantage initiative. Officially launched in April 2015 at the Auto Remarketing Canada Conference in Toronto, the project was described as an industry think tank of progressive thought leaders who were committed to the notion of transparency.

The initiative included 12 to 14 founding members, but it was short lived due to conflicting priorities and strict limits on the time the partners were able to devote. CARPROOF decided to roll up the project about 10 months later, and instead extend the concept of transparency to every aspect of its business from the product road map to the product team.

“We believe, and have always believed right from the beginning, that if everyone knows what they’re getting into they can make an informed decision, and buy right and sell right, and therefore sell more cars and make more money. That’s one of our founding principles and we still stand by that,” Joe Varkey, Vice President of Marketing at CARPROOF, told Canadian auto dealer in an interview.

Manufacturers and dealers are not the only ones moving things forward in the name of transparency. Companies like CARPROOF are also doing their part to help dealers, consumers and the overall industry

The company is present online through dealer websites, Kijiji and AutoTrader, where it promotes the notion of transparency through badging. “Badging shows at a glance what’s most important to consumers when they’re looking at a used car. So that would be: no reported accidents, low kilometres, one owner, and in the case of Kia they have actually incorporated a top condition badge for their CPO program,” says Varkey. He adds that for car shoppers browsing listings on one of their partner’s websites, they can instantly see whether the car they’re looking at is right for them.

Within the last year, they also have done campaigns to educate consumers about the importance of having their vehicle checked for an open safety recall, released an updated version of their Vehicle Valuation Report, along with a browser extension so dealers can check the run list at auctions and quickly create a shortlist of the cars they want, and they made improvements to their dealer mobile app — and all in the name of transparency.

When asked what dealers need to work on to continue to increase transparency, Varkey brought up the issue of vehicle appraisal. He considers this one of the big hurdles in the consumer experience — getting their vehicles appraised for what they think it’s worth. For example, if a customer has a car that appears to be selling online for $20,000 but the average asking price is $18,500, the dealer may offer them $16,000 — but they need to follow up with an explanation: I’m going to have to spend $1,000 reconditioning it (cleaning, detailing, carpet, shampoo, etc.), and I need to make a profit.

“That kind of explanation to the consumer removes that feeling that ‘Oh this dealer is going to take advantage of me,’ and it shows the consumer that the dealer is actually being transparent by explaining where he got that number,” says Varkey. “We found that’s a huge selling point for dealers and consumers.”

The company’s next steps to increase transparency are aimed at letting the customer know, at a glance, how they should value a vehicle, what they should buy it for, what they can sell it for, and what they should offer a customer on trade — all supported with hard data to help the dealer explain their position to the consumer.

They also have some ideas on how car shoppers can get their vehicle information without requiring the VIN, since many consumers don’t know where it is, don’t have it or don’t realize it’s on their ownership or insurance slip.

Over the past year, the automotive industry has moved past the initial shock of consumers demanding more transparency. They are now at a stage where it’s all about how they have and continue to implement these changes, perhaps because companies like Amazon, Airbnb and Zipcar have taught them that it leads to positive results for both the consumer and their business.

“Progressive dealers know and have proven that being more transparent causes cars to turn faster and results in more leads,” says Varkey. As a result, “They sell them faster and for more money.”

Comments are closed.

Canadian auto dealer