At NADA 2020 in sunny Las Vegas, host Jim Fitzpatrick was joined by Paul Whitworth, Senior Vice President of Inventory Management Solutions for Cox Automotive.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: So talk to us. What does the current marketplace look like for dealers that are acquiring vehicles through trade-ins?
Paul Whitworth: Yeah, so we’re seeing dealers paying much more attention to sourcing vehicles directly from consumers. Our Kelley Blue Book Instant Cash Offer product has been really helpful to them, and we’re seeing increased demand for it. The cars that come in from the consumer, whether it be a trade-in or what happens more and more today, it’s just an outright buy, is they’re much more unique pieces of inventory. And have a lot more retail promise than maybe, the off-lease cars or the large volume of program cars that have been the traditional sources of inventory for dealers.
Jim Fitzpatrick: For over about the last 10 or 15 years, it seems like more and more dealers are getting into that business of buying right off the street. I think maybe CarMax started us in the industry on that. Right?
Paul Whitworth: Well, I beg to differ. I think Kelley Blue Book’s been out there all along and…
Jim Fitzpatrick: Oh, okay. Yeah, a good point.
Paul Whitworth: And we love to see CarMax and Carvana educating consumers about that as an option for them. And we see a lot more consumers come to Kelley Blue Book as a result. We’re trusted at helping the consumer know the value of the car. And so, you’re exactly right. These other folks in this space are actually making it a better for all of us. So it’s worked out really well.
Jim Fitzpatrick: That’s right. That’s right. Yeah. For sure. And consumers are now thinking about that. It used to be that you wouldn’t take your car to a dealership to sell it unless you were buying one. But now it’s…
Paul Whitworth: They never understood, they had that as a choice before. Right. They used to think, I want that new car so bad, I got to just take whatever that dealer will give me. And now they realize they can unbundle the transaction. It also makes it easier for, “well, I’ll own three cars for three or four months while my kid’s home from college. And then come September, I can downsize and I don’t have to take one in. And I want to get rid of one out of my garage.”
Jim Fitzpatrick: That’s exactly right.
Paul Whitworth: So it’s working well for all the… everybody in the market.
Jim Fitzpatrick: Sure. Sure. Can you tell me about the new integration between Kelley Blue Book’s Instant Cash Offer tool and vAuto’s Provision platform?
Paul Whitworth: I sure can. So, as I think most people in the industry know, vAuto is the preeminent software tool to help dealers manage their inventory…
Jim Fitzpatrick: That’s right. Yeah.
Paul Whitworth: what stock, how to price it. And so it was only natural that we wanted to bring the Instant Cash Offer inventory sourcing into the dashboards of the auto, and help the auto dealers use that tool more effectively. And so, that’s one of our main promotions here at the show, is to educate dealers that believe and use the vAuto methodologies for managing their inventory. The Instant Cash Offer can be one additional source of inventory for them.
Jim Fitzpatrick: It’s a great move.
Paul Whitworth: We’re really excited about it. And over at the booth, there’s a lot of other people really excited about it too. It’s going really well.
Jim Fitzpatrick: No question. How does the integration help solve the marketplace barriers for dealers?
Paul Whitworth: Well, one of the areas that it really helps out is on the appraisal process. So it establishes a more credible value for the car than traditionally the dealer, the vAuto dealer can generate. By just inputting some numbers into the vAuto screen, now the dealer effectively, can swivel that monitor around, or on an iPad, show the consumer how Kelley Blue Book thinks about the value of the car.
Jim Fitzpatrick: It means a lot too, in the sales process.
Paul Whitworth: And make them feel more comfortable that, yeah, it’s not worth quite as much as you’d hope, but look, it needs new tires and there’s a ding over here, and this is how an outside third party thinks about value in the context of those kinds of issues.
Jim Fitzpatrick: What advice would you give to dealers looking to maximize their potential trade-ins wins?
Paul Whitworth: I’d advise dealers to use a transparent process and stick to it every time. And treat every consumer coming to the dealership with a car to sell, in an appropriate, positive way, whether it’s a trade-in or an outright acquisition. And just follow a consistent methodology that’s transparent to the consumers. Kelley Blue Book is a great way to do that, but it’s like everything in this business, it’s about a disciplined process more than the tool you use.
Jim Fitzpatrick: Yeah, that’s for sure. That’s for sure.
Paul Whitworth: So I think that’s important.
Jim Fitzpatrick: A lot of changes in the industry that we’re seeing. Right?
Paul Whitworth: It is. It is.
Jim Fitzpatrick: We’re not going to have as many new car vehicles sold, from what the experts tell us, in 2020, which means we’ve got to be running much more efficient, right, than ever before.
Paul Whitworth: And pay much more attention to the fixed-operations department.
Jim Fitzpatrick: That’s right.
Paul Whitworth: One of the other things we’re debuting here at the show, is the Kelley Blue Book Automotive Repair Guide.
Jim Fitzpatrick: Yeah, talk to us about that.
Paul Whitworth: Kelley Blue Book is the place consumers come to understand what they should pay. And they’ve been bugging us for years, Tell me what I should pay for service as well. We rolled out that functionality in the fall. We’re already getting a couple million consumers a month coming to us to get the value.
Jim Fitzpatrick: Wow. A couple of million, that’s incredible. Wow.
Paul Whitworth: Yeah. It’s gone really, really well. We’re now the number one site on a SEO for, what I should pay, what a fair repair price is.
Jim Fitzpatrick: That’s fantastic. Wow.
Paul Whitworth: In just a couple of months. And so, we’ve got a product now for dealers to be able to advertise their service departments alongside that valuable Kelley Blue Book information about the price of a brake job or the price of a transmission job.
Jim Fitzpatrick: That’s fantastic. And it adds such credibility for the consumer. And that feeling of confidence rather than saying, well, what are we supposed to pay for this?
Paul Whitworth: Yeah, and dealers have picked up an unfair, bad reputation in the service department for being too expensive.
Jim Fitzpatrick: Oh, I know. I know.
Paul Whitworth: And it turns out, most dealers are priced fairly compared to the independent repair shop down the street. And on top of that, that dealer offers factory parts, a good waiting room, wi-fi-
Jim Fitzpatrick: factory-trained technicians.
Paul Whitworth: … factory-trained technicians. So we think it’s a wonderful opportunity to reach out to those consumers that defected from the dealership service department, and get them to come back in and give it another try– And so we’re really excited about that.
Jim Fitzpatrick: That’s awesome.
Paul Whitworth: So Jim [Roche 00:07:07] who’s worked in fixed operations software is over in the booth.
Jim Fitzpatrick: Yeah, we’ve had him on the show a number of times. Oh good.
Paul Whitworth: He’s got his… added a new chapter to his book. He’s talking to dealers about Kelley Blue Book Automotive Repair Guides.
Jim Fitzpatrick: Awesome. That’s great. That’s great. Well, Paul Whitworth, I want to thank you so much for joining us on CBT News. It’s been very enlightening for dealers that are watching. If you’re here at the show, make your way over there to Cox Automotive, say hello to Paul. But, if you haven’t been able to come out to the NADA Show, we’re going to show the website online, for them to learn more about this. Because you guys are doing some dynamite things over there for dealers.
Paul Whitworth: Super.
Jim Fitzpatrick: Yeah, thank you so much.
Paul Whitworth: Thanks for helping me get the word out.
Jim Fitzpatrick: Thank you for joining us. Thanks.
