Ahead of Its Time

I like TrueCar.  I have used the service myself, and recommended it here before.  So, I was sorry to read that they are being forced out of Group 1.  My vision of Online F&I, in a nutshell, is that customers will someday desk their own deals.  That’s why I applaud AutoNation for their persistent efforts to move away from the antiquated “secret pricing” approach.

Group 1 had also been in the vanguard, but now Honda is pressuring them to drop the TrueCar relationship.  The comments from Honda remind me of some I heard way back when MSRP data first appeared on the internet.  “Unacceptable,” stormed Herr Heitmann, “must be stopped!”  Meanwhile, Edmunds was already publishing our invoice prices.

Of course, as an e-commerce guy, I am biased.  You can’t just say information wants to be free, to an angry factory exec – or a struggling GSM.  Except that it’s true.  Transaction prices, like invoice and MSRP, are going to be out there.  We might as well get used to it.

Upfront Pricing

AutoNation is going to have another try at no-haggle pricing.  This time, I think they will succeed.  I think the market is ready for it.  By coincidence, I had just read Zag’s white paper when Mike Jackson made the announcement.   He was talking about no-haggle in the showroom, but this has important implications for my field, e-commerce.

Zag’s argument is that if you’re the only dealer in town not giving a price on the internet, then you’ll be left behind.  The flip side is that if you’re the only dealer who is doing it, then your competitors can easily undercut you.  The trick is to create a movement in the industry – and AutoNation has the scale to do that.  The article also cites Sonic, Asbury and Lithia.

Mr. Jackson says pricing is the last frontier in auto retail, and this is doubly true on the internet.  It’s the one thing preventing true, business-to-consumer, online F&I.

Separated At Birth

I had lunch yesterday with an old friend from AutoNation.  David now works for JM&A, and I started thinking about the two companies.  AutoNation is the world’s largest auto retailer.  Jim Moran Enterprises is the most vertically integrated.  I picture them in opposite corners of a Gartner chart.

Mike Jackson put an end to AutoNation Financial Services in 2002, because he wanted no distractions from the pure retail business.  Mr. Moran’s vision, by contrast, was that he would control every revenue stream within his Southeast Toyota footprint – from the port to the stores, including financing and all the F&I products.  Today the finance arm, World Omni, is so strong that it does third-party servicing for other lenders.  Each of these businesses, up and down Moran Boulevard, is a strong competitor in its own right.

I wonder if a single entity could combine the two strategies – the depth of a JM with the breadth of a public dealer group.

Selling F&I Products in the Service Lane

Automotive News reports the success AutoNation is having, selling F&I products in the service lane.  I thought MenuVantage dominated service-lane selling, and I was dismayed to see AutoNation using a different system.  I am not with MenuVantage anymore but – old rivalries die hard.

What caught my eye was the point about service-lane buyers needing a way to finance their service contracts.  I have a few words to say on this point – Service Payment Plan.  My pal Bob Hymen offers zero percent financing, and a complete selling kit for the service lane.

Service Payment Plan is integrated with a number of menu systems including MenuVantage.  The F&I Manager can create a finance contract for any of the leading providers, as shown here:

After that, the system prompts for a credit card or bank account, and then generates all the required paperwork.