Mon. May 29th, 2023

Online car buying, where digital tools handle the tedious stuff, is remaking automotive checkout experiences.
This was the takeaway from a conversation for PYMNTS’ Commerce Voices Series sponsored by, featuring CarMax Assistant Vice President of Product Ann Yauger and Assistant Vice President of User Experience Design Eric Martin.
The timing of its omnichannel experience redesign is fortuitous as used car prices went through the roof after COVID-related supply chain snarls in 2020 and 2021 cut new car shipments.
“Used car prices are high right now. Interest rates are high right now,” Yauger said. “We’re thrilled that our new product is timed for this moment because we think it’s particularly helpful. Customers want help understanding affordability or how to find the right car for their budget, not just for their needs.”
The two executives agreed that digital removes many traditional frictions of walking onto a used car lot and going through paperwork, price points and pain.
Martin pointed to CarMax’s Instant Offer solution for trade-ins which values the car online before taking a trip to the physical location. “That powerful unlock allows us to think about our digital tools as not just digital progression tools in a remote way, but it also allows us to unlock value for customers that come into the store,” he said.
CarMax’s online pre-qualification process is another way of improving the on-site experience before the consumer arrives. He said offering that “as a digital-first experience for customers means that you’ve given them a powerful tool to browse a digital lot.”
Conceding that “customers don’t have a lot of trust in cars salespeople,” Yauger added that “our brand differentiation from the very first day has been to give customers full transparency and bring honesty, transparency and ethics into an industry that hasn’t been known for that.”
Read more: CarMax Faced With Growing Consumer Demand for Cheaper Cars
The Joys of Self-Progression
With about 53% of its retail sales following an omnichannel path as disclosed on its second-quarter fiscal 2023 earnings call in September, CarMax is trying to remove the old unpleasantness of haggling and uncertainty that go with used cars — and those that sell them.
Yauger said online prequalification and Instant Offer is emblematic of how car dealers today can employ “that digital part of the experience to reinforce our brand values of transparency.”
She added that prequalification “is a relatively new product. We’ve just scaled it nationwide. We’ve been testing it over the year,” noting that, while unable to divulge its impact on sales,”we wouldn’t have scaled it if it wasn’t [performing].”
What this process also does is search the entire CarMax inventory to give the consumer choices should the car they want be financially out of reach.
“This takes your credit scenario [and] runs it on every car that you would be approved for,” she said.
Additionally, what it serves back to shoppers is “not just an estimated monthly payment, but the actual monthly payment.”
This avoids sticker shock and possible disappointment for shoppers, rather than having all that figuring done on-site while they pace the showroom, growing apprehensive. “At CarMax, we have no vested interest in you buying a car that’s more expensive than you can afford,” she said. “We way more want to get you into a car that’s comfortably priced for you.”
Martin added some context, saying, “it allows that customer to understand their budget as a part of the digital shopping experience, not something separate, not something downstream. That is an incredibly empowering part of the experience for the customer. We turn that experience into a dashboard for the customer.”
See also: CarMax Empowers Customers with Self-Progression Capabilities
Solving the COVID-Era Used Car Conundrum
With their digital dashboard of financing pre-qualification and preferences established long before visiting a lot or interacting with a sales associate, Martin said customers and sales associates are “empowered” to have a conversation — not a hard-sell stare down. It’s “not about necessarily what you can afford, but how we match what you can afford to what we have.”
At that point, bothersome steps have happened online, creating a checkout experience where “they’ve gone through their vehicle-specific application for financing, they’ve gone through taxes and fees, and they’ve done that work through checkout. Now their experience … is that moment of getting to celebrate the purchase rather than focus on the paperwork.”
Yauger agreed, noting that in CarMax surveys a top complaint is spending hours (if not an entire day) in a dealership filling out forms. “Now digital can take that pain point away … before you come in or even after, and just make the time you spend in the store itself all about the reason you’re there: to see the car, to get the car, all the positive things.”
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