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Online Car Retailer Launching Nation's First Car "Vending Machine"
cartechboy writes "Last year's Gallup poll showed that car salespeople are the least trusted professionals in America, ranking even below members of Congress. Enter, Carvana, an online dealership operating in Atlanta, Georgia. They allow customers to shop for cars online, secure loans online, and pay for cars online. Now they have gone one step farther and are claiming to remove the despised car salesperson from test drives and even post-purchase pickup by creating, yes, a giant auto vending machine. The facility, which will open at the end of November, will be a fully digital, 24-7 interactive 'vehicle-delivery center' designed to offer customers pick-up options after purchasing a vehicle online. They'll have floor-to-ceiling windows, custom LED lighting, flat screen TV's plus interactive keypads that identify customers based on unique buyer credentials. There will be three car pickup bays to allow for simultaneous pickups. One thing they won't have: car sales people (Note: there will be customer service reps there to answer questions). Carvana plans to expand on the idea, presumably if this Atlanta facility works."
I mean no weekend trips (they probably limit the time/mileage/etc), but need to go shopping or head to the car dealership? perfect!
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Carmakers like Saturn (RIP) offered no-haggle pricing and compensated their sales staff for being consumer-oriented.
The reason car salespeople are horrible is that they're set up to compete with the consumer for a concealed amount of money that is either in rebate or discount to the dealer.
Thus for the consumer, it's guesswork against a predatory salesperson interested only in their commission.
Futurist Traditionalism
If I shake it real hard will a free car fall out?
We fill up ourselves in most gas stations, now we have car vending machines. Next, fix your car yourself in human less garages.
This is really great news.
Everything I write is lies, read between the lines.
Scion, Toyota's badge aimed at young urban crowd, also has no haggle pricing. I just bought one a month ago and the entire sales process took under an hour. Sales guy never pressured me in to adding on features I didn't want or need. He even recommended against getting the factory fog lights for $500 and instead just get a brighter main bulb after market.
Can't really comment on the car yet since my last one I drove for 15 years, VW Passat!, and it'll go another 200,000 miles with the new owner. Let's see if Scion can hold up for 15 years.
Too many states require you to buy from a dealership. Just look at Tesla's pain as a shining example of how legislators and lobbyists want to screw the consumer when buying a car.
With some probable exceptions, car salesmen aren't genetically-engineered-dispicable-abhumans or anything, they are just what you get at the pointy end of a system designed to resist non totally-fucked-up market pricing through a mixture of social flimflam, feature obfuscation, mandatory bundling, etc. (Sort of like trying to get an actual 'price' for a nontrivial medical procedure, except that with the car you are usually conscious the entire time, making it less pleasant)
If you aren't trying to fuck around on prices, I'd venture to guess that you'll automagically get at least apathetic salespeople, rather than overtly slimy ones. Actually good ones might require additional management and technique. However, at the same time, it's not as though there aren't dozens of ways to design confusing and abusive web interfaces for inhibiting comparison shopping, pre-filling unhelpful checkboxes, hiding useful things, and generally shoving the user around.
Barring gross incompetence on the part of either the management or the web devs, the experience is going to follow the economics. Are you running a business moving goods you think people will want at clearly stated prices? Your humans or your website will likely be pretty easy to deal with. Are you fucking around with the user? You'll either get slimy pressure-jockeys in person, or an absurdly unhelpful and downright malicious site. The medium is not the message, in this case.
And the makers don't want to make it easy on you. For instance I was trying to compare the inside volume of minivans. All the makers had sites in Flash with the dimensions and other stats impossible to extract, much less to compare even with other models of the same brand. Had to write them down manually in a spreadsheet. Of course some magazines have nice charts for you but they tend to go for the flashy models and anyway aren't interested to publish specs for anything from the current year or older.
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Traditional car dealerships are owned by wealthy, powerful folks who've managed to preserve their monopoly via lobbying their local and state legislatures to force the auto manufacturers to sell thru the dealer chain. This forced "3 tier" system (a lot like the others many states enforce on commodities which throw off a lot of tax revenue, like alcohol, where a chosen few are granted a limited number of licenses) does nothing to help the consumer -- instead, it limits choice and artificially drives up the price. There's no practical reason for these laws in 2013, yet we still have them. I'm hoping that companies like this one and Tesla manage to disrupt the obsolete, 20th Century business model, but I have my doubts.
This means you can be absolutely ruthless with the price . . . you can get the same thing anywhere else. Do your homework online and find the price that people are actually paying, and call every dealer within 150 miles and ask for their best price. Start playing them against each other, and eventually, one will work with you -- typically towards the end of the quarter when they're all trying to make their number, or at the end of a model year when they have excess inventory. If you don't get exactly what you want from a certain dealer, tell them to pound sand and walk. They prey on most folks' discomfort with the negotiation process -- you need to turn the tables on them and be a little opportunistic, but you can save many thousands if you do so.
Tesla is the company that came to mind when I saw this article. State laws require sales through independent dealerships. Those laws don't say that the 'dealerships' have to have a certain number of employees. I can see it now. There could be a Carvana terminal next to every Tesla store. Each Carvana 'dealership' machine, can have a single, maintenance person given the title of 'car dealer'. Automated parking machines can be very sophisticated. The job losses can be attributed to merely automation, just like bank tellers.
Go to Wolfsburg, Germany and you can see twin towers that do the same thing. I didn't buy a car there, I only visited, so I don't know all the details. My understanding is that you go there, pick out the car you want, and then you go to the tower and watch the robot pick it up and deliver it like a coke in a vending machine. I watched it serve up a few cars. It's pretty cool.
first they seem to only sell used cars
and a quick check of honda acords,their prices aren't cheap. $20,000 for a 2012 model. and the cheap one at that with no options
the prices at the dealers are the same and i can trade my old car with them at the same time
Sounds like you financed through the dealer. That's a mistake. Get a car loan through a bank first (or better, a credit union). Then go car shopping. Dealers make their real money from inflated financing - more than they ever make from car sales - and they love buyers who didn't come prepared.
Having to bargain for the price sucks ass. Bought a new car once and will never do it again. I like getting a new car but the buying process sucks.
when car brakes after falling in Vending machine you own it and must pay costs to get it fixed. No refunds as well.
If it doesn't deliver the merchandise immediately after payment, it's not a vending machine but a website.
My wife and I just bought a used current-year model from Enterprise, the rental car people, and did most of the work at home on my computer. Found the models we were interested in, the price and mileage, and then went to the dealership, about a mile from home. And they were willing to go to other Enterprise dealers, 20-30 miles from here, at no charge, to get a model for me to look at, with no pressure on me to buy it once I'd seen it. They had many models to choose from, and there was no pressure to buy. And they have the same 7-day return policy. If you don't need a brand new car, this is the way to shop! We had the car at home less than 6 hours after we first left to shop.
when car brakes after falling in Vending machine you own it and must pay costs to get it fixed. No refunds as well.
What if the machine breaks the brakes before the brake can break the brakes?
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Actually, dealers make very little on financing or sales. They make the lions share of their income from service and warranty work.
Think about it, you get the car for the price you want, you have good credit, you get 0% financing, where is the inflated financing aspect. They might get a finders fee from the bank, but that's about it.
But your advice is still valid, going in with a loan approved from your bank or credit union is a great idea since you already know your limits. But at the same time, the dealer will still want to run the numbers, and occasionally come back with better rates and figures. I did this, had a loan approved from my credit union at 3% interest (was for a used car, never going to get 0 rates on those), the dealer came back with 2.75. Sure it is only .25 but that makes quite a different over a long term loan on a $60k car.
I came, I conquered, I coredumped
If a car brakes will falling in a vending machine, it will be fine as the brakes performed as intended... Now if the car breaks, that's a different story :)
I came, I conquered, I coredumped
Having seen how some of my friends treat rentals, I'd want to get a seriously good deal on a used one.
I wonder how many cigarettes you can smoke and how many holes you can burn in the upholstery on a test drive.
Misread headline as "Car Railgun Launching First Car"
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That would be a tough break.
I live in a small town a couple of hours away from a major city. A couple of years ago my wife and I went to the local dealership to try and get a reasonable priced lease on a new Camry. Not only did the local dealership insist on us paying full sticker price, they also wanted to add on top about another $1000 for dealer added "upgrades". They were absolutely adamant about not budging on the price, to the point of insulting me to my face claiming that I just didn't understand financing. After a few hours of back and forth we left disgusted.
Flash forward two weeks later. We go on over to the major city, make an appointment with a salesman at one of their Toyota dealerships and book a hotel room for a weekend of R&R in case this goes south. We show up at that dealership and are greeted by a friendly guy who has a couple of cars ready for us to pick from for a test drive. The sticker price goes out the window as he starts off with a deal about $2500 under the factory sticker, no weird dealer add-ons, and all the same or better features as we were looking at in the small town. Quick test drive and some paperwork later and we were in and out in less than an hour with a far more pleasing experience and at least $50/month lower payment than the local dealership was trying to foist on us.
The lesson to be learned here is that not all dealerships are created equal. Yes, some of them are packed with slimeballs out to screw you over, but others do in fact have decent folks staffing them and a non-sociopathic manager who understands that giving people a good experience at a reasonable price will get so much more business in the long haul that it's the far better path to take. You really do have to shop around. Oh, and it helps to know the dealer invoice price. If you know what they paid for the car then you're in a far better position to negotiate.
TL;DR If you're willing to shop around you'll find that not all dealers are dickholes.
No way they're rated below politicians. Must be a really old survey.
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Look at the trouble Tesla has trying to sell cars in Texas, thanks to bizarre unconstitutional laws paid for by a Texas car dealer "association". The dealers' lobbies will fight this thing HARD if it seems to work...
it will be programmed by car salesmen
Eh, I liked this version.
I don't care if it's 90,000 hectares. That lake was not my doing.
Why are you buying a $60K *used* car, sticking yourself with paying any interest (2.75% or not), and still worried about the 0.25% difference? How about buying something you can afford up front (there are plenty of perfectly functional cars for much less than $60K, even new...), and saving *several tens of thousands of dollars,* instead of being proud of yourself for saving a whole 0.25% blowing money on an overpriced penis compensator? You don't exactly sound like the paragon of fiscal responsibility anyone should be listening to here.
It's true that car dealers make quantitatively less from new car sales (used car sales are much higher margin), but it's not a bad income stream once you realize that they "own" all their cars via leverage.
When they sell a Camry, they don't really pay the full $25,000 invoice (or whatever it is) to have it sit on the lot. They essentially lease it from the manufacturer. So they may be leveraging $500 of their own money or something like that to have the car sit on the lot for, say, 60 days. When the car is sold, the "loan" is paid back with the proceeds from the sale. Let's say the dealer nets $1000 after paying back the loan and after subtracting all the business overhead, they're making $1000 on a $500 investment. That's a pretty decent return. Even if the dealer only nets $250 from the sale, it's still a 50% return.
Think about this next time you feel sorry about how the dealer's not making money off new car sales.
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to car salesmen as well as car related grievances in general:
I moved to Japan, got a bicycle, and decided that I'd never buy a car for the rest of my life.
Cars are nothing but a status symbol in any country with decent infrastructure. If my children want one, they can get one when they're 20. But until then, we're riding the much more pleasant bullet train when traveling as a family.