Ebay / Craigslist Changing the Face of Automotive Sales

There's an axiom in the car business that's almost an article of faith; put simple, it is this: You have to have your customer come to the showroom and test drive the vehicle the he or she has chosen. After all, the reasoning goes "you wouldn't buy a pair of shoes without trying them on, so you have to have your customer test drive the vehicle so that the customer can see if it's the right vehicle, too!"

In the normal course of events, this works every time at a dealership. It does ad lots of time to a deal, but it is as necessary as rain is to flowers. It seems - or at least management makes you think it seems - that you cannot sell the car without the test drive.

That model is being challenged more and more, though, by outfits like Ebay or Craigslist, places where you can find the vehicle you are looking for, at a price you are willing to spend. The big kicker here, though, is that there's no test drive, unless you and the vehicle in question are local to one another. Instead, you are relying on the honesty of the seller totally.

This is the way this type of buying works:

1. The customer searches for the vehicle or vehicles he is looking for on Ebay or Craigslist (say a 2002 Honda Accord EX cloth

2. If the customer finds the vehicle he wants, he or she then reads the description and looks at the photos

3. The customer also likely looks at the condition report and any other listings that might be germane

4. If the customer likes what is there, he usually makes a bid, if it's on Ebay or makes an offer if it's on Craigslist

5. If it is an auction, then the buyer puts down what he thinks will be the winning bid and then waits to see what happens. Auctions can run from 3 to 20 days and the price can jump up steadily so a potential buyer has to watch things carefully

6. On Craigslist, it's just a matter of finding a price you can agree on, reading the description carefully and looking at the photos to make sure that it is the vehicle you want

7. Once he auction ends on Ebay, if you are the winner, you must put down a deposit that can range from as little as $100 - depending on the seller - to as much as $1,000 or more. Usually this is done by credit card.

8. With this preliminary out of the way, you write up a standard purchase and sales agreement and then fax it to the customer, who signs and returns it. The customer is now responsible for finding financing, unless the dealership provides the financing piece.

9. That's all there is to it and the deal is done.

I usually try to stay out of my pieces because I believe you can see that I might know and thing or three about what I am writing about. I have written about cars for more than 30 years and been a writer for more than 40. However, this is one time where I will insert myself just to let you know that I have sold many cars and trucks on Ebay.

It goes without saying that honesty is the best policy. You cannot take any shortcuts because they will come back to bite you, usually in the form of non-payment or a payment dispute or the invocation, now, of the protection clause that gives buyers up to $20,000 of protection against fraud. It works out that the seller involved can really be raked over the coals.

So, since honesty is the best policy, it makes sense to try to illustrate every feature and angle of the vehicle for sale. When I was more active in Ebay automotive sales I usually included between 30 and 50 photos of each vehicle that I was putting up for auction - you cannot rely on the 10 or 12 photos usually supplied by an inventory service, although it does make things quicker and helps to keep the cost down. And I made sure that each vehicle that was up for auction went through a safety inspection by my top mechanic so that I could let the customer know if there was a ton of work ahead. And, I usually took any Ebay sales cars out for test spins to see if there any problems that might comeback to bite. The test drive told me a lot about the condition of the vehicle; how it handled, and it let me know if I felt something was amiss. If it felt too bad, I went to the general sales manager and told him I was pulling the vehicle because it was not worth the potential problems we'd face.

Finally, I conducted a comprehensive condition report that not only detailed the condition of every system in the vehicle, including the electrical system, engine, transmission, options, upholstery, body panels, rust, and so on. The buyer had to know that he was not getting the proverbial "pig in a poke." This method of selling must have worked because in my 18 months of doing this job I averaged from 10 to 15 sales per month as Ebay Sales Coordinator for one of my former automotive employers.

To do this job correctly was not an easy task. When I had it down pat it still took me more than an-hour-and-a-half just to get the reporting side of the job done. The writing and photography took about another hour. So, at its best, I was able to list one car every 4 cars per day. And, while I did feel lots of pressure to get cars up more quickly, I pushed back to make sure all of the bases were covered.

The why of this is easy to see. We sold cars to customers as far away as Holland, British Columbia, Saskatchewan, Manitoba, Hawaii and to buyers from across the lower 48 states. Each state has its own patchwork of laws so we had to make sure that our cars were ready to meet any contingency that the authorities of a state might throw at it.

Most of our customers trusted our products because we sold Hondas that were within five to seven years and with reasonable mileage. We also sold high-line vehicles that the other members of our dealership group couldn't move. The most expensive car we sold on Ebay was an $87,500 VW full-sized sedan that was specially equipped as it was the owner's vehicle, while the least expensive cars that we sold were for little more than parts and cost about $1,500.

Sometimes, believe it or not, the less expensive vehicles brought us better profit than the more expensive ones.

There were some buyers, though, who still wanted to do the test drive and the whole nine yards before they would take delivery of the vehicle. This meant that we not only had to do the purchase and sales agreement, but we also had to get payment for the entire vehicle because the buyer expected to drive it out of the dealership. These buyers evidently though we could register cars for them in their states - there are some services that do this but they do take a bit. In this situation, though these buyers may not have realized it they had to purchase the vehicle from us before we could send them the key documents they needed to get insurance and plates in their states to drive out with them.

To these buyers, they believed they had the option of canceling the sale and they could have, but, the would have lost their deposit and they would have had to invest in an additional insurance policy for the new vehicle and in plates. Some states even required that a police officer come over and inspect the vehicle and sign off on its Vehicle Identification Number (VIN) and mileage.

So, these buyers did, indeed, get their test dives, but they started them and kept them going as they drove away from the dealership.

It was far better to have the vehicle shipped to its destination as it only added minimal cost and it not only saved wear and tear on the car, but also wear and tear on the driver, too.

Craigslist, with listing services all over the country, is also a favorite of many dealers because they can list their entire inventories for very low cost and they can put pricing in place that only a Craigslist buyer would know about.

You just have to be careful on Craigslist, something which thay admit themselves, because the potential for poor sales practices is more pronounced as you have no recourse through the sales channel as yo do with Ebay.

This type of sale is changing the face of the auto industry and while it would be nice for it to be "business as usual" for traditional sales managers, it just is not anymore. Ebay sales are here to stay. Just ask General Motors, the plan to use Ebay as a major sales venue to get out of their current troubles.