The Evolution of Car Buying

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Timeline

• 1897 – William Metzger opens the first independent car dealership in Detroit.

• Originally sold Waverly Electric cars

• Credited with selling the first Oldsmobile

• 1861: 1908 – The Ford Model T enters the market.

• 1915-1925 only available in black to make production faster

• Over 15 million sold

• 1925 – About ¾ of new cars in America are purchased on credit.
• 1942 – Civilian car manufacturing ceases due to World War II.

• Tires and gasoline severely rationed

• Demand for new cars rises post-war

• 1958 – Senator Almer Stillwell Monroney introduces the Automobile Information Disclosure Act.

• Required dealers to put price stickers in car windows

• Stickers included price, make, model, serial number and dealer information

• 1960’s – Eustace Wolfington develops the modern car lease.

• Previously, leasing was only available to businesses

• Introduces the lease renewal for drivers to continue leasing the car

• 1980 – 87.2% of American households own at least one car.

• 95% of car sales in America were to replace a vehicle

• 1990s – Lower gas prices lead to increased sales of larger vehicles like SUV’s.
• 1991-1998 – Motor vehicle assembly labor output increases by 3.4% each year.
• 2008 – Automotive sales fall drastically to 10-year low due to American financial crisis.
• 2013-2017 – Trucks (SUVs, vans and pickups) outsell cars for the 5th straight year.

Tesla VS the Franchise Model

• According to franchise laws, automobiles must be sold through licensed dealerships.
• Tesla Motors is fighting legal battles with several states to sell their electric cars directly to consumers.
• The company creates custom cars, making it nearly impossible for a dealership to stock inventory.

Car Buying in the Digital Age

• It is still nearly impossible to buy a car entirely online.
• Many third-party services exist to browse inventory from local dealers.
• Buyers must still go to the dealership to test drive and buy the car.
• Pros of online car sales:

• Shoppers can look at a larger selection of inventory from multiple dealers.

• New car buyers can customize their options, like color and upgraded features, in minutes.

• Many consumers feel there is less pressure buying online.

• Potential cost savings from online exclusive deals and pricing.

• Cons of online car sales:

• Buyers cannot physically see or drive the car before buying it.

• Difficult to value a trade-in vehicle.

• No salesperson recommendation on make, model or features.

• Online sales do not create the personal relationship of face-to-face sales.

• Financing can be more expensive as there is no salesperson to help you get a better finance option.