This is one of those stories that takes you by surprise when you first read it mainly because – for me – I first read about it in WardsAuto, a US based media outlet rather than an Australian publication, which is odd considering that TheCarTest is based in Melbourne!
The concept that TheCarTest has brought to the automotive industry down here is a try-before-you-buy system and one that has worked well in other industries. They use their own methodology defined as “S-T-B” for Select, Try and then Buy. Research undertaken by the Autotrader magazine found that many people simply hate the process of buying a new car because of the time involved and dare I say it, the sales people involved as well. We have all heard the stories about sales reps being too pushy or simply dodgy and TheCarTest has put together a less stressful process.
To start with, the buyer registers with TheCarTest and then selects from two simple choices: size and price. Currently the website offers two sizes: Hatch or SUV with a price range from $10,000 to $100,000 in $20k increments. Although the website has plans to expand the range, I would see these two categories as being the most preferred by their target market – we all know that hatchbacks and especially SUVs are very popular today. The buyer can choose several vehicles to make a shortlist.
Then buyer can choose how long they test the vehicles on the shortlist for: three to seven days. The idea when the system started in 2016 was that the buyer would rent the car for the testing under a standard rental agreement – with a different per day cost based on the size and price of the vehicle.
If the vehicle is enjoyed and the purchase started, the buyer will receive a special quote that can be taken to a local dealer for the sale to be done. The quote is valid for 30 days to give the buyer enough time to deal with other issues such as possible financing etc. Importantly, the cost of testing is returned on completion of the sale. It is a form of short-term rent-to-buy. Clearly TheCarTest knows that the buyer is serious when they book the test drives because there is nothing like outlaying a wallet of cash to focus the mind!
I like this method of car buying because it attracts the non-enthusiast into the new car market and I would see its success being in the lower price sedans and where they are today in hatchbacks and SUVs. Buyers of these types of vehicles are more interested in utility rather than sports focused driving, in other words, they either need a practical car for the family or for carrying equipment for lifestyle purposes. As most manufacturers in these segments offer very similar feature/functions, it would be a easier to have a select few cars come to you for testing rather than trudging down an “auto alley”.
Enthusiasts and drivers who travel large distances may well want to go down the traditional buying method because they are more comfortable with it and they are looking for specific features or performance. In all cases, buyers would start online to look at reviews, digital brochures and offers before they even contacted TheCarTest.
It is an interesting concept, battling with the traditional sales outlets and with car share or ride sharing schemes. However, with local Governments building more outer town and city suburbs without public transportation infrastructure, the need for a car to carry a young family is still very relevant. Most car sharing schemes have started inner city and are working their way outwards. TheCarTest can help residents of these outer suburbs buy a safe new car.
Consumer buying methods are definitely changing with many people no longer loyal to a brand or outlet and as such are happier to move their allegiance based on customer experience rather than reliability as it was in my day! That means a poor service experience could swing a buyer to another marque when its time to change a vehicle. However, the key for the consumer is always price – if they can buy a product faster and cheaper through TheCarTest, they will. I once worked for a sales director whose mantra was “make it easy to buy and easy to sell”. In other words, cut the crud, be sensible and offer a product and service that is acceptable to all parties and build a relationship such that the customer comes back for more.
I hope that this system finds its place in the market and is a local success story.