Following news of the AAA Mid-Atlantic’s recent venture into the car-buying service sector of the auto business, Auto Remarketing decided to reach out to our home state's chapter, AAA Carolinas, to see how one of the organization’s founding members of the auto-buying service does business.

Greg Pence, the manager of the auto buying service for AAA Carolinas, explained how his system works, a system that has been available to his organization’s members in North Carolina and South Carolina since 1993.

“We are a full concierge service,” Pence said. “We eliminate the hassle for our members to go to a dealership and spend four to six hours there and talk to many, many people.”

How exactly does AAA Carolinas eliminate as much customer hassle as possible? According to Pence, all they need to know is what their member is looking for and they take care of the rest — even up to the point of a free delivery, for both used and new vehicles, to a member’s house or place of work, if they so choose.

“Our process, what we do at AAA for our members, is find out the vehicle that they’re looking for and searching to buy,” Pence said. “If we don’t have it in inventory, which we stock 40 to 60 pre-owned vehicles in our inventory, sometimes as much as 100, we will actually go out and find the vehicle for them, either at an auction or another dealership that we work with consecutively. Then we actually buy the car on their behalf, bring it here, it will go through our own inspection process and at that point we deliver the car to their home or office.”  

The entire operation is run out of the AAA Carolinas corporate office in Charlotte, N.C., including all of their inventory and their staff, servicing all AAA members in N.C. and S.C. Although Pence says the majority of his customers are already members, non-members interested in the service will have to get a AAA membership before being eligible.

While that might sound like a pain point for some, the organization also takes the initial hassle out of that situation — by making that free, as well.

“The only way we can sell them a car is to make them a member of AAA, so basically that’s what we do,” Pence said. “We pay for the first year of membership if they’re not a AAA member.”

Pence says this policy has proved to be an excellent way to attract non-members toward becoming AAA members. Although he says they don’t track the percentage of members who have joined for the auto-buying service and stayed, he estimates that anywhere between 60-80 percent of his customers keep their memberships active.

The success behind the AAA car-buying service, just like many other areas of the automotive sales world, is due to positive relationships. Pence estimates that AAA Carolinas sells 120-130 cars a month, 20-30 of which, on average, are sold to North Carolina State Employees’ Credit Union members, one of the many credit unions that employ AAA’s service for their own members.

“We are operating for six or seven different credit unions now, we are their auto buying service,” Pence said. “One being State Employees’ Credit Union of NC, one of the largest in the country. We are their buying service — we do everything for them. They call the credit union and then they have a person based there at the credit union that calls us and gives us all the information and then we work with the member directly from that point.”

AAA Carolinas leverages its strong relationship with neighboring dealerships to work out great deals for its members, while the dealer benefits from the sheer number of vehicles it can move via one conduit.

“As far as the manufacturers and the new cars for sale it’s the relationship and the fact that we’re selling in volume, we’re not buying one car a month. We’re buying many cars a month from them so we’re able to get a better price based off of that,” he said “They go through a dealership and we have a fleet person that we deal with directly with a couple of the dealerships for manufacturers and then there’s some other sourcing that we’re able to use because we buy so many cars. But most of the time it is through a dealership – the car’s typically there or we pull it from the port.”

According to Pence, the majority of the used cars they sell are already on the AAA Carolinas lot. Its corporate office also serves as the hub of its auto sales, where Pence says, at any given time, they will have 40-60 vehicles in stock, which typically gives them 45 days’ worth of supply. It also doesn’t hurt that the organization typically serves customers with above-average means.

“We have four or five different banks and lending institutions that we use,” Pence said. “We take all the information down, relay it to the bank, the bank actually qualifies the customer at that point and does the financing, as well. A lot of people go to their own credit unions and banks or pay cash. The AAA demographics are pretty strong — we’ve got high Beacon scores for most of our members and a lot of them pay cash for the car.”

More information on AAA Carolinas’ car-buying service can be found on its website.