We are getting closer to becoming a one-price society. Why? Because people want things automated.
Rick Ricart believes that, but the president of Ricart Automotive Group in Columbus, Ohio, also feels that if buyers want automated and fast transactions, then those buyers give up negotiation.
“That’s what the trade-off is,” said Ricart, whose grandfather started the company in 1953.
When they understand how dealers price their vehicles, customers feel comfortable committing, buying and “Docusigning” the initial paperwork, he added. “Then we as a dealer simply call them and congratulate them and ask them if they would rather us bring the vehicle to their home or place of business and deliver it there, or would they like to come to the dealership and celebrate taking delivery. It will be approximately 45 minutes. We get 100-percent response that they would like to come to the dealership, knowing it will only take 45 minutes,” Ricart said.
Program shortens time at dealership
That 45-minute service is part of a new program called Express Checkout, which lets shoppers find the vehicle they want, plan payments, line up financing and buy the vehicle online.
Ricart Automotive served as a pilot business for AutoFi’s Express Checkout program, and Ricart helped further develop the product for AutoFi, which is an online auto financing platform.
Express Checkout is now available for all makes and models, new and used, that Ricart Automotive sells.
The program has shortened the time customers spend in the dealership from an average of three-and-a-half hours to only 45 minutes, and more than 200 customers used the platform from approximately September through November to purchase a vehicle from Ricart.
The 100-percent response from customers saying they would like to come to the dealership dispels what Ricart says is an industry myth that people want their vehicles delivered to them. Customers are actually comfortable going to the brick-and-mortar.
“I think people want to see the dealership that’s going to stand behind the vehicle that they’re buying,” Ricart said. “They want to make sure they’re not just having something delivered that originated from a fake business or someone’s back yard that are claiming they’re a car dealer.”
He heard industry reports throughout his years in business regarding customers’ No. 1 complaint about the process of buying a car: It takes too long. Choosing the vehicle they want and test driving it is time-consuming in itself, but then a bank or lending institution usually gets involved, and the dealer must put together all the necessary paperwork for the customer to review and sign. Implementing all of those steps into an automated format was the next “innovation step,” Ricart said.
He heard about AutoFi and learned that its founders started the company because they were unhappy with their own car buying experience. After meeting AutoFi chief executive and co-founder Kevin Singerman and chief technology officer and co-founder Mandar Gokhale, Ricart agreed to have his business serve as a pilot dealership for the Express Checkout program. “The end result these guys built is a fully automated online transaction tool,” Ricart said.
He explained that for all used vehicles and new Fords on the Ricart Automotive website a button is labeled, “Start Express Checkout.”
When customers click that button, the system prompts them to provide identifying information and see what their actual payment amount would be. The system sends the customer’s credit information to lending institutions. Ricart noted that subprime banks are also joining the program.
“It’s a big benefit for a lot of consumers who maybe have challenged credit and don’t want to waste the time to drive to a showroom and have the embarrassment of being told no,” Ricart said. The customers can sit at home, pick the car they want and see if they qualify for it. If they don’t qualify, a Ricart representative will contact them and let them know what their options are.
“It just saves the consumer a lot of time,” Ricart said. “They can wait until they’re comfortable on their own couch at home, fill out the information, and … do the shopping portion that way. We have a lot of consumers that like to get to see that exact payment, and they won’t commit or start docusigning the paperwork online. They then choose to come to the dealership, and they want to test drive the vehicle or maybe look at something else. They’re perfectly welcome to do that. But the majority of the best responses have been those that go through the entire process, those that understand that the Internet price on a vehicle is truly the selling price today.”
The Wal-Mart model: Multiple options
Ricart remembers the Great Recession of 2008-2009 causing the closure of many automotive dealerships. He believes the industry’s failure to embrace the Internet was a main reason for the problems.
“Those dealers weren’t prepared for change,” he said. “They weren’t prepared for a new way of doing business. We have to be great at our business today, but we have to continue to keep an eye on the future and be willing to adapt quickly and listen to what our consumers are telling us.
“With those thoughts in mind, Express Checkout made the most sense for something that if I was going to commit my time to say, ‘let me make sure this product is what I think is best for our consumers, our dealership, our lenders, our state government, our compliance officer, and it satisfies all those parties and the guest has an incredible experience.’ That’s exactly what we’re looking for.”
He feels dealers should look at the Wal-Mart store chain business model in the move toward innovation. He notes that customers of Wal-Mart stores can conduct business directly at the retail location. They can buy online and pick up merchandise at the retail location, or they can buy online and arrange for the merchandise to be delivered to their home or business.
That concept of multiple options is where the automotive industry is headed, and franchised car dealers should work to stay on the forefront of that trend, Ricart said.
Express Checkout is the “biggest innovation message I feel we’ve had in eight years,” since the company got involved with Motor Trend Certified program in 2010, Ricart said. The Express Checkout message is that you can do as much or as little from home as you want, he noted.
“You don’t have to come in here and go through the whole process of ‘please just tell me my payment.’ You can find out the exact payment, accurate, approved by a bank, to a penny from wherever you are, and a consumer has the option of making the buying decision on their own, without the pressure and persuasion of the sales person, and I think that’s a wonderful tool that many consumers are looking forward to for their next vehicle purchase.”
EDITOR'S NOTE: This is the second in a two-part feature on Rick Ricart and Ricart Automotive Group. Part I can be found here.
The third paragraph of the second section has been updated to reflect that the Express Checkout is now available across all new and used makes and models that Ricart Automotive sells.