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Don’t Tune Out

The editor takes you inside a conference that had digital retailing makers wooing auto finance execs.

June 9, 2017

So Cox Automotive’s Mark O’Neil is on the cover this month. And if you’re anti-digital retailing, you may not like what he has to say when you click here. But whatever you do, don’t tune this stuff out.

I put Mark on the cover because of two things he said at the 2017 Automotive Forum in New York during his address, “Connected Retail: Deals in the Digital Age.” First, he said the ability to complete a car deal 100% online is just a year away. As you’ll read by clicking here, it’s a prediction he clarified when we spoke last month.

What I want to focus on is another statement he made: “Now’s the time to embrace digital retailing. If the industry doesn’t, someone will create a disruptive technology that will put the current dealer or manufacturer at risk.”

“Dealers have become true friends. They are our partners. They don’t stand in the way. Our responsibility is to work with dealers to make them more digital.” — Georg Bauer

This list of potential disrupters is long. Heck, this digital retailing category now claims subcategories that count third-party sites that don’t deliver leads; they deliver done deals. And they’re wooing every OEM, finance source and F&I product provider out there. There are even dealers joining this digital car-buying race, Rimrock Auto Group’s Steve Zabawa being one of them.

And finance sources haven’t exactly been secretive about their desire to connect directly with car buyers online. Several of them have already launched digital portals that do just that. Heck, Bank of America just enhanced its mobile banking app so car buyers can complete the F&I process on their smartphones.

Then there’s Ally’s Clearlane. Last month, it added digital signature and contract management capabilities to its auto finance marketplace, which features a network of finance sources and even offers GAP and service contracts.

Based on my conversations at the 2017 NADA Convention & Expo this past January, not all F&I product providers are convinced consumers will buy more if allowed to research and select products online. But even the skeptics are entertaining alliances with these tech firms, and they’re developing online marketing content just in case those pushing this digital retailing agenda are right.

This is why my conversation with Mark couldn’t have been better timed. In fact, 10 days after our conversation, I drove down to San Diego for Auto Finance Innovation 2017. In the audience were finance execs; on the stage were all these fintech firms hoping to add them to their network of finance sources.

Daimler-backed AutoGravity was one of the main sponsors of the event, which featured Ford Motor Credit-backed AutoFi and online pre-owned retailer Shift. But what caught my attention were all these other fintechs that have so far flown under my radar.

There was Blinker, which allows people to buy, sell, finance or refinance their car using a mobile app. Also there was Carvoy, whose mission is to make car leasing as easy “as buying clothing online,” and Honcker, which went live last September with the goal of making leasing and buying as easy as “buying a ticket online or shopping with one-click checkout.” (It actually takes three clicks to complete Honcker’s mobile leasing process.)

Then there was uQuote, which I found interesting because it wasn’t showcasing another me-too car-buying app. Instead, it acts as an extension of a dealer’s marketing efforts, taking advantage of Facebook’s ad-targeting capabilities and Messenger app to connect with customers who click on its ads. The startup only requires that dealers make it an admin of their Facebook page, set vehicle pricing, prioritize the vehicles they want marketed, and set their advertising spend for the month.

As for the others, well, Carvoy CEO Daniel Yuabov put it best when he said, “We don’t send leads; we send completed deals.” So, yeah, these third-party deal generators are doing what TrueCar was working toward before Scott Painter stepped down as CEO in August 2015.

Speaking of Painter, a partner in his newest venture, Fair, was also there. That would be auto finance legend Georg Bauer. If the name doesn’t ring a bell, he’s the guy who built the financial services business for Tesla Europe and is credited with creating the first leasing program back in the ’80s.

Bauer held true to his promise to Painter that he wouldn’t launch Fair in San Diego, although he did talk a lot of about the need to reinvent leasing. So I’m guessing that was a hint. He also had this to say about the digital push: “This is no longer about evolution. This is about revolution. And I’m not a techie. I’m not a geek.”

Asked if he thought dealers stood in the way, he responded, “Dealers have become true friends. They are our partners. They don’t stand in the way. Our responsibility is to work with dealers to make them more digital.”

All of this tells me this digital conversation isn’t going away. So, again, don’t tune out just yet.

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