Michael O'Connor and Shane Hambly are exactly the type of tech-savvy millenniels that car companies and their dealers are desperate to reach and hold, and they know it. They also think they have a better way to reach their own coveted demographic – 30-somethings also known as Gen Y – and they're putting their own money into a venture they believe will prove it.
O'Connor, 39, and Hambly, 37, are CEO and vice-president, respectively, of a web-based service that acts as something like an online dating service combined with a digital auction. It's called Carmigo and Canadians can register for free online or download the app at the Apple store now and from the Google Play store within the coming months.
Carmigo is the product of intelligence gathered over more than a decade working with car dealers on their web sites. That, along with the smarts they gathered in a joint online venture with Canadian Black Book – which they have since sold back to CBB - has brought them to Carmigo, a newly-launched site that allows shoppers to anonymously solicit "bids" from a wide variety of dealers, all via the comfort of a desktop, a laptop, a tablet or a smart phone.
"We looked very closely and found there is nothing in the market that connects new car buyers to new car sellers" in a free, easy and completely anonymous way, says O'Connor.
Using a pretty straightforward vehicle selection and registration process, Carmigo users can solicit new vehicle price quotes from one, two, 10 or more dealers for a particular make, model and trim. Every dealer in Canada is in the Carmigo database, though to date only about 1,000 sales people are registered. Online shoppers who click on a dealer without a registered sales person trigger a response by Carmigo – which goes directly to the dealer to ask if they would like to respond with a price quote.
Most important for shoppers, right up until the moment when a quote looks like a deal and both parties need to get together face-to-face to complete it, the shopper's identity remains hidden. Indeed, O'Connor and Hambly insist that they have not created a data-mining site like Google and others. Contact information remains confidential until the consumer chooses otherwise.
"It's all about engagement," says Hambly. Serious engagement. The quotes are real and verifiable and shoppers are free to push through dealer negotiations with a number of different quotes in hand. Real numbers in real time.
"What's happening when customers are engaged, sales people take them seriously. This process gets them engaged," adds O'Connor, who along with Hambly insist they are not a lead-generating service that profits from selling the names of hungry shoppers to dealers and their sales people. Carmigo's business model, insists O'Connor, is designed to generate profits from selling banner ads on the site.
The moment just might be right for a digital platform that acts as a virtual middleman, connecting sellers with buyers whose contact information remains off limits until the moment of truth. O'Connor says Carmigo's research shows that in 90 per cent of cases, the sellers close a deal in an in-store buyer visit facilitated by Carmigo.
Research certainly shows that consumers of all ages are frustrated with vehicle shopping, even as they have been empowered with pricing and vehicle information from a variety of sources – from manufacturer and dealer web sites, to services such as unhaggle.com, carcostcanada.com, apa.ca and more. That, says O'Connor, creates an opportunity to use the power of digital technologies to bring vehicle negotiations fully into the digital age.
To drive home that point, Carmigo commissioned Research House to ask a representative sampling of Canadians for their views on vehicle shopping. It's not pretty:
- 62 per cent of buyers worry they might not be able to negotiate the best deal; women were more concerned than men (69 per cent versus 54 per cent);
- 59 per cent said the most stressful part of buying a car is negotiating with salespeople to get the best price; 50 per cent of consumers also said they don’t like being pressured to buy additional services and 47 per cent don’t like feeling as though they must buy a car on the spot.
Car shopping is so stressful, 74 per cent said they want to delay or put off shopping for a car entirely. Nearly half (47 per cent) said they don't like having to visit multiple dealers and 43 per cent said they spend 10 hours or more researching and negotiating a price, which does seem like an excessive time commitment in the digital age.
O'Connor and Hambly say their service takes the legwork out of shopping, replacing it with click-work.
"Millennials refer to car dealers as test drive centres," says O'Connor. But he and Hambly add that their research suggests buyers of all ages are quickly grasping the power of the Internet and this snowball rolling downhill is transforming vehicle retailing. They plan to profit by making car buying a more seamless process, one in which buyers drive away with something they feel is a good and fair deal.
In a word, they argue, convergence has arrived: the technology to link buyers and sellers has met with consumers now ready and able to employ technology tools to do the deal.
"Five years ago we would have fallen flat on our faces" if we'd launched Carmigo," says O'Connor, adding that "we're seeing a 100 per cent shift among consumers" to online shopping for cars.
The obvious question: why would dealers and their sales people participate in a process that empowers buyers so thoroughly? Because the alternative is worse.
That is, today's web-savvy shopper will simply move on to the sellers who serve up quotes, who play the digital game. But by engaging online shoppers in a serious and fulfilling way, sellers have an opportunity to develop relationships – virtual and hopefully then real ones – that are about more than just price.
"We're all about finding the right dealers," says O'Connor. "They're the ones who are aware that if they don't give the answers (to online shoppers), somebody else will."
Deals of the Week consulted with www.unhaggle.com, Car Help Canada, www.carcostcanada.com, and other sources on these offers. As usual, pricing information here is subject to change and dealer discounts vary, so consult your dealer for all the final details, including expiry dates for all offers.
2015 Lincoln MKZ 2.0 Select
- MSRP: $39,400
- Freight, dealer prep, air conditioning tax: $1,935
- Dealer discount (estimated): $1,498
- Factory discount: $2,000 (manufacturer incentive)
- Taxable subtotal: $37,837
- Total price with 13 per cent HST: $42,755.81
- A $1,500 factory discount can be combined with one per cent financing for 48 or 60 months. A one per cent lease rate for 48 months is available with a $1,500 factory incentive and a $500 loyalty bonus.
2015 Mitsubishi Lancer Sportback SE CVT
- MSRP: $20,998
- Freight, dealer prep, fees and air conditioning tax: $1,735
- Dealer discount (estimated): $611
- Factory discount: $1,300 (manufacturer incentive)
- Factory discount: $500 (loyalty incentive)
- Taxable subtotal: $20,822
- Total price with 13 per cent HST: $23,528.86
- A $600 factory incentive and the $500 loyalty incentive can be combined with zero per cent financing for 48 or 60 months. A $1,000 factory incentive and the loyalty incentive can be combined with a 0.9 per cent lease rate for 48 months.
2015 Audi TT 2.0 TFSI Coupe Quattro S tronic
- MSRP: $51,600
- Freight, dealer prep, AC tax: $2,230
- Dealer discount (estimated): $2,928
- Factory discount: $3,000 (manufacturer incentive)
- Factory discount: $750 (loyalty incentive)
- Taxable subtotal: $47,152
- Total price with 13 per cent HST: $53,281.86
- The factory incentives cannot be combined with a 1.9 per cent finance rate for 48 or 60 months, or 2.9 per cent for 84 months - or a 3.9 per cent lease rate for 48 months.
2015 Kia Forte Koup 1.6 SX 6AT
- MSRP: $25,395
- Freight, PDI, AC tax: $1,670
- Dealer discount (estimated): $934
- Factory discount: $2,000 (manufacturer incentive)
- Taxable subtotal: $24,131
- Total price with 13 per cent HST: $27,268.03
- A $500 factory incentive and any dealer incentives can be combined with zero per cent financing for 48 or 60, a 0.99 per cent rate for 84 months, or a 0.9 per cent lease rate for 48 months.
and
. Calculations based on Ontario customers. Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Where noted, "dealer discounts" are negotiated with the customer on a case-by-case basis. Unhaggle Savings are actual discounts received by Unhaggle customers.
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