AutoRef is a new way to get offers on new and used cars online. Michael Bailey, Product Marketing Manager, tells us how it works, their surprising early adopters, and why customers love it as much as dealerships.
Describe AutoRef in one sentence.
We get you guaranteed offers on new and used cars before you visit the lot.
How does it work?
When you go to our website, you can browse thousands of new and used vehicles at local dealerships.
After you find three specific cars you’re interested in, we’ll submit them to dealerships who will fight over you.
You’ll receive three guaranteed offers. From there you have 72 hours to visit the dealership, test drive the vehicles, and hand them your pre-negotiated AutoRef offer. If you go to the dealers and you don’t like the vehicles you can walk away at any time with no penalty.
Does the service cost customers anything?
Nope. It’s completely free.
Do your customers worry that they won’t get the best price on a car because they aren’t there to negotiate in-person?
Some do, but we can alleviate their concerns with data. On average, our customers buying used cars are saving 11% off sticker price. Average savings without AutoRef is only 6-7%.
They’re also spending only a quarter of the time they would normally in dealerships (45 mins vs. 3 hours).
And most of our customers are using our service because they hate the tedium or unfairness of the negotiation process in the first place.
Women, for instance, are notoriously ripped off at dealerships. Recent studies have shown that on average, women end up paying about $1,300 more than men at dealerships simply from bias in the sales departments.
So women love AutoRef because it evens the playing field. The dealership doesn’t know who wants the quote, just that someone does and on top of that, this person is also opening talking to two other dealerships that they have to compete against.
Besides women and those who are discriminated against in the negotiation process, who else benefits from using your service?
Anybody and everybody, really.
Young people love it because they’re used to shopping on Amazon, and booking hotels to Priceline. They want and have come to expect convenience and transparency, and AutoRef provides that.
Families like it because they don’t have to spend their Saturday schlepping the kids around to different dealerships trying to find the right car at the right price.
And we’re even getting a lot of interest from older, less internet savvy customers. They’ve been negotiating at car dealerships for years and can’t stand it. You can’t believe how happy our service makes them.
Are you getting any pushback from dealerships?
No, they’ve been more than happy to sign on. We’re providing them with highly qualified leads with intent to buy. And we’re getting them in and out of the dealership in 45 minutes.
We’re also improving the customer-salesman dynamic because the customer feels more in control and knows they’re not getting ripped off.
Were any of your original assumptions surrounding AutoRef proven wrong after talking to customers?
Originally we saw our service appealing to a tech savvy demographic. But shortly after launch, we saw that a large portion of early adopters weren’t the most internet savvy, but were so desperate for an alternative to the traditional car buying experience, that they immediately went to our website after seeing a story about us on the news.
And I think that’s great. It speaks volumes to the value our service provides and how much it is needed.
And, how intuitive we’ve designed our website and process to be.
What can we expect from AutoRef at AlphaLab Demo Day?
Well, we launched in Pittsburgh is early June, and the response has been overwhelming. The press has been really excited about it, customers have been really excited about it, and dealerships are signing up every week.
By Demo Day, you’ll see all our continued traction, the various bits of customer feedback we’ve integrated into our website, and we’ll be at the point where we’ll be ready to scale to new markets.
What’s one piece of advice you would offer to young entrepreneurs reading this?
Be coachable. You’re not always right. Listen to what the data’s telling you.
It isn’t your advice that’s going to define the product, it’s your customers’ advice. Listen to them.
Work hard. Work late. And in between coding, remember you have to sell the product to people so you have to get it out there.
Stop having meetings, start working and launching your product. That’s the worst thing you can do. Not launching your product and waiting until it’s perfect. It will never be perfect.
All wise words. Anything else?
If you have any questions about our service or buying a car in general, feel free to get it touch with me personally (email@example.com) or through facebook or twitter. We know quite a bit about car shopping. Quite a bit. And cars too.
I’m a car nut, so, that helps.