Superstores:The revolution to buy to the used car
Date: Jan 25, 2005
Contributor: Mathew Hornberger
There is a unique, new concept available to consumers in this new era of used-car buying. The used-car superstore makes selecting a used car a lot like buying a refrigerator or a computer in a megastore. Now it's possible to shop in a huge automotive supermarket to buy the vehicle equipped with the features you need at the price marked on the window. Like choosing a refrigerator with an ice maker or a computer with a CD-ROM drive at the big appliance or electronics mart, at the used-car superstore, you might select a sedan with power windows or a sports car with a turbo-charged engine.
Interestingly, the first used-car superstore was developed by a successful electronics retailer.
Circuit City Stores, Inc. introduced the concept when they opened their first CarMax Auto Superstore in Richmond, Virginia in October, 1993. Today there are 19 CarMax superstores in 16 cities. Circuit City's fiscal year 1998 report shows total year sales of $873.4 million for the CarMax Group -- not bad growth in just five years. But that's nothing. The company boasts that by the end of calendar year 2001, there will be 80 to 90 CarMax superstores in 45 of the top 50 advertising markets in the United States.
The second auto megastore to roll across the country offering easy, friendly used-car buying is AutoNation USA. The brainchild of entrepreneur Wayne Huizenga and his partner Steve Berrard, AutoNation USA employs lessons the two learned while growing Blockbuster video stores from 19 to over 5,000 locations, with revenues increasing from $7 million to $5 billion in about ten years. AutoNation USA was founded in 1995 and the first megastore opened October 15, 1996 in Cottage Creek, Florida. Number 26 was launched on January 26, 1998 in Irvine, California. At the 1998 International Auto Show in Detroit in January, Huizenga (now Chairman, Republic Industries, the superstore's parent company) predicted that AutoNation USA will top $13 billion in sales and $350 million in profits just three years after it was founded. AutoNation says they are looking into a number of unique cyberspace opportunities. Stay tuned.
Helpful in their pursuit of these big dollars is Republic's April 1998 acquisition of the nation's third auto superstore, dealer-owned Driver's Mart. Like CarMax, expect AutoNation USA to be situated in most of the 50 major markets in the United States in the next few years.
The two remaining used car superstore chains in the U.S., AutoNation USA and CarMax, share basic selling philosophies. Both offer haggle-free pricing, used-car warranties, in-house financing and a customer-friendly environment. They pattern their low-pressure sales approach after lessons learned from Saturn. AutoNation is an exceptionally friendly place to shop with cafes, child-care centers, and community rooms in each store. CarMax has similar amenities in many of their locations.
Both superstores have a broad selection of reconditioned, late-model vehicles to peruse. Perusal begins at a touch-screen computer kiosk where the shopper provides information that prompts the computer to search and find vehicles matching specific criteria. On a visit to an AutoNation USA store, for instance, you might tell the computer you are looking for a mid-sized car priced under $15,000. A list of cars in the existing inventory matching that criteria appears on the screen. Choose those for which you want further information and the computer prints out an individual sheet for each vehicle selected. The sheet contains the specifics of the car: stock number, color, mileage, engine size, features, etc. It also includes the lot location, so you can find the car yourself and look at it. CarMax operates in a similar manner.
Sales consultants (or "sales guides") are available at the door and throughout all superstores to help customers search and decide. Because these are salaried employees and their paychecks don't reflect the size of any particular sale, they tend to be more honest and can take time to be helpful.
Many buyers appreciate the fact that the cars on sale in these superstores are carefully inspected, reconditioned to quality standards, and sold with a warranty. AutoNation buyers are protected with a 99-day/3,300-mile limited warranty and a 7-day/300-mile money-back guarantee. CarMax buyers have a 30-day/1,000-mile warranty and 5-day/250-mile money-back guarantee. While CarMax offers less warranty than AutoNation, both are miles ahead of the traditional used-car dealer.
Also unlike most used-car locations, AutoNation USA stores include a repair facility and an accessories section where extra items can be selected and included in the purchase price of the vehicle. Some of these facilities are also in CarMax stores, but their availability seems to vary.
Both companies have some kind of an association with new cars. AutoNation has purchased dealerships in the areas they operate and CarMax has an arrangement with Chrysler-Plymouth and actually sells new cars in some of their stores. Both superstores not only take trade-ins, but they will buy your car without any obligation to purchase from them as long as the vehicle is a recent model and in reasonable shape. Each company maintains locations (tagged ValuMax and ValueStop) for older and less expensive used cars.
The superstore concept provides many benefits used-car buyers enjoy, but more importantly, they appear to be encouraging the entire used-car industry to offer some of the things they do. Women, in particular, enjoy these benefits. Think about it. We may never again have to haggle in a dirty car lot with a guy wearing a white belt, white socks and a leisure suit. That, gals, is progress!
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