For OEMs and retailers, selecting and onboarding the necessary digital retail technology to grow online sales and service is a massive undertaking. The biggest challenge is finding the right technology to power the entire transaction online.
The right technology should make the process easier and more efficient for both buyers and sellers. Car companies have spent millions trying to build technology over the years but getting it right has proven to be difficult and costly, because automotive sales transactions are complex cocktails.
There are over 13,500 makes and models of new cars and millions of different trim, color and option combinations to choose from. The elements of a transaction are many, including vehicle pricing, manufacturer incentives, down payment, finance/lease payments, rates, residuals, money factors, terms, bank fees, trade value, equity, negative equity, consumer credit profiles, taxes and fees.
To add to the complexity, the industry is regulatedunder strict federal and state advertising laws, franchise rules and brand compliance requirements, which makes it extremely difficult to calculate “to the penny” transactions on millions of cars that are legal in all 50 states and compliant with all franchise rules and brand guidelines.
Carvana & Vroom have avoided the complexities of the strict regulations of the new car market, because they solely sell used. Because of the complexities of selling new cars online, Tesla is the only car company who has been able to crack the code to solve these issues, enabling them to sell new cars completely online, at scale. Walmart’s CarSaver offers new and used cars, so their platform integrates with all the top brands and with dealer systems.