The actual new-car shopping process, says Steve Greenfield, is not necessarily the pain-point for most consumers.
What causes the sting, rather, is what happens at the end of that process: “the adversarial negotiation with a car dealer,” he said
The implications of this pain point was one of the foundations Greenfield — a former Manheim and AutoTrader.com executive — used in forming CarLingo, a company that aims to cut down consumer uncertainty and frustration in car shopping and buying.
CarLingo has rolled out a new-car shopping experience that hones in on what it calls “the specific attitudes, situation and lifestyle needs of consumers to help them find their best new car.”
Greenfield, who is chief executive and founder of the company, talked with Auto Remarketing in January about CarLingo’s “roadmap” and where it saw a need in the auto industry.
“No matter how well a consumer thinks that they’ve prepared during the shopping process, there’s definitely an information asymmetry when a consumer walks into a dealership,” Greenfield, said. “And frankly … a typical (dealership) salesperson is somewhat of a professional negotiator; so the consumer, who’s only ever in-market every three or four years to buy a car is at a disadvantage.
“Reconciling that with the fact, though, that the average car dealer now on the new-car side is only making 3.8 percent profit, if you ask consumers what they think the average dealer makes on a transaction, they report 20 percent,” he said.
“So, really the genesis of us going down this path is the fact that there has got to be a middle ground, or zone of potential agreement, where the consumer feels comfortable they’re getting a fair deal, yet dealers are making a fair profit margin and their margins aren’t being squeezed,” Greenfield added.
The company said in a product release that it “embraces a brand new way to shop for a new car. By first fully understanding a consumer's needs, the CarLingo experience can make smarter vehicle recommendations that better align with the consumer's wants, attitudes and budget.”
Or as Greenfield added in that release: "There's a lot of innovation going on in the automotive space right now, and a renewed focus on understanding and addressing ever-evolving consumer preferences. As a result, the industry's consumer-facing car shopping experience is going to greatly improve over the coming few years."
"Much of the innovation in the space right now is anticipating and reacting to consumer shopping trends," said Greenfield. "CarLingo's future product roadmap is sequenced to dovetail into addressing these evolving consumer needs.”
What Makes CarLingo Different
Of course, there are other players and services in this space that aim for similar goals of communication and common ground between dealers and consumers. When asked what makes CarLingo different, Greenfield said part of that is “to be determined,” given that the company is a relatively new startup.
He added: “We have a fairly sequenced product roadmap that, over time, should help a consumer through all the different phases of the car-shopping process. Right now, all we’ve released is the addressing of Phase 1, which is vehicle selection and ensuring that vehicles meets that consumer’s particular needs, lifestyle and attitude. Over time, what you’ll find is that we will help consumers basically check off every element of the car deal.”
That includes vehicle selection, price negotiation, the trade appraisal and monthly payment — “all of which are interconnected, interrelated,” he said.
The company has plans to release solutions in each of those areas, Greenfield added, “always with a very intuitive, consumer-facing interface that tries to make it really easy to understand, for a consumer, where they are in the process, what decisions they’ve made, what decisions they have yet to make, and then the interplay between all these decisions as they make them – with the end goal being to get them to a transact-ready state, where their expectations have been set appropriately around all those different facets of the car deal.”
Where CarLingo Goes From Here
So, what’s the next stop on CarLingo’s itinerary? Having gone in-depth on vehicle selection, Greenfield said price should be the next area the company addresses, with trade-in appraisal and monthly payment (likely in that order) after that.
CarLingo is also releasing eBooks that reference back to those four phases plus dealership selection.
As reported back in December by Auto Remarketing, the company launched a shopping resource center with information that spans across the five distinct phases of the shopping process, covering:
1. Vehicle selection
2. Vehicle price
3. Trade-in value
4. Monthly payment
5. Dealership selection
“The new CarLingo Resource Center helps consumers address their needs, questions and concerns across all five of these areas,” Greenfield said in the news release. “In addition, CarLingo has eBooks available for download for each of these five areas that are a valuable resource and reference for the new-car shopper requiring help and guidance through their car shopping and buying process.”
Editor's Note: Staff Writer Nick Zulovich contributed to this report.