Even in today’s competitive marketplace, AutoTrader.com wholeheartedly believes buy-here, pay-here dealers still have the ability to advertise effectively. Brett Kelly contends that operators just have to change their strategies a bit because so many consumers are researching and shopping online.

Up until AutoTrader.com launched its Buy-Here, Pay-Here Center back in May, Kelly admitted that BHPH operators faced significant challenges when advertising on the company’s site, especially if their ads wound up landing next to a franchised store listing that highlighted no-money down or single-digit financing.

“One of the biggest things we strive to do with the Buy-Here, Pay-Here Center is to create an environment where a BHPH dealer can be transparent in their advertising,” said Kelly, who is the director of independent dealer business at AutoTrader.com. “Historically, when you think of the places where a BHPH dealer would advertise or try to reach consumers, they’ve generally been alongside traditional dealers, where the traditional dealers’ messaging might be zero money down or 2.9 percent financing for 36 months.

“You look at an environment like that and it becomes very difficult for a BHPH dealer to be transparent, because in reality a lot of the BHPH dealers need $1,000 or $1,500 down or even $2,000 down, and they’re certainly not going to be offering financing at 2.9 percent,” he continued.

“One of the big opportunities we have with the Buy-Here, Pay-Here Center is because it’s limited to only BHPH dealers, dealers can actually be transparent and fully disclose the real deal terms they have to offer to a consumer. And it’s going to be OK, because the consumer is going to be looking at them compared to like dealers,” Kelly went on to say.

When consumers enter into AutoTrader.com’s Buy-Here, Pay-Here Center, they only see BHPH operators in their market, and only lots that finance their own paper can participate in this section of the website. As of late July, about 400 dealers in 90 different markets joined the Buy-Here, Pay-Here Center, which is free for operators to use for a year.

AutoTrader.com representatives are making the rounds to industry events such as state independent dealer association conventions. Kelly noted that each time a conference passes, the number of Buy-Here, Pay-Here Center participating dealers rises.

“Pretty much every time we participate in an industry event, we see an uptick in dealer participation,” Kelly said. “Kind of like anything else that’s new, we have some dealers who are early adopters and are very proactive with their merchandising and their transparency. Then, there are others who are apprehensive and haven’t done anything to merchandise themselves yet.”

To those BHPH operators who might be apprehensive about leveraging what the Buy-Here, Pay-Here Center can do, Kelly explains the proposition this way:

“You think of your typical used-car transaction, and customer goes in and probably has a short relationship with the dealer. They get financed by a third party or bank, and the only relationship from that point forward is with their bank,” Kelly said. “But BHPH is a unique situation because the dealer is also the bank, and it is going to be an ongoing relationship. When a consumer comes in, it helps to establish that relationship right off the bat based on trust and transparency.

“Imagine a reality where a consumer goes onto the Buy-Here, Pay-Here Center and searches for dealers and cars in their area; they know that for example they have $1,500 they can put down, and they look at everything that’s available in the area based on the budget they know they can afford.

“They go into that dealership, and that car is actually there. It’s available for those terms. They learn about the dealership. That’s a really good solid way to start what is more than likely a multi-year relationship going forward,” he continued.

“In your value proposition, you can talk about the credit approval process, payment terms and rebuilding credit. Dealers can use the display in competitive price environments to speak of their value. They can emphasize credit approval and transparency in payment environments. It’s not advantageous to stress the VIN explosion and price when credit approval is your value. Having the right story in the right environment will help distance yourself from the competition,” Kelly went on to say.

Ongoing Technology Improvements

During a conversation with BHPH Report, Kelly highlighted several technological enhancements that are ongoing with the Buy-Here, Pay-Here Center.

Initially, dealers had to manually add their inventory and descriptions into the platform. Now, Kelly said the platform can accept BHPH listings from a wide array of data providers so the information can be uploaded quicker.

AutoTrader.com is beginning to showcase the Buy-Here, Pay-Here Center in house advertisements on its website. Next, if a visitor comes to the main site from a market where a BHPH operator is using the platform, a tab appears on the visitor’s view of the site so they can go directly to the center.

Furthermore, BHPH operators can use customized templates offered by Auto-Trader.com to create a microsite that’s attached to the Buy-Here, Pay-Here Center. If a dealer doesn’t like the look and feel of his or her current site, they can point their address to this microsite and have it become the store’s main page.

“The dealer microsites are provided because the BHPH is really more dealer first than car first; it’s very important for the dealers to be able to tell their own unique value story,” Kelly said. “So we’re making some improvements to the Buy- Here, Pay-Here Center, including giving the dealer the ability to customize the colors using a template system. They can create their own flavor in their microsite.

“Once a dealer has created their microsite, they’re actually able to use it like their own dealer website. If I pointed that domain name over to my Buy-Here, Pay- Here Center microsite, when the consumer arrives, it would remove the top and bottom navigation bars; it would remove all of the AutoTrader Buy-Here, Pay-Here Center branding, and it would be like the dealer’s own standalone experience,” he continued.

“That’s another thing we want to do to help dealers because No. 1. it gives them the ability to manage their value story, their inventory, everything they need to do in the same place, and they don’t have to go post these things all over. It’s our goal to make these microsites as robust as we can so it will offer the dealer everything they need,” Kelly went on to say.

More Than Just Moving Metal

In an environment where more state and federal regulators are taking a greater interest in how BHPH operators function, Kelly emphasized that AutoTrader.com’s Buy-Here, Pay-Here Center can be more than just another advertising avenue for dealers.

“The big message here is because this is the only marketplace of its kind, it really does give the dealers the opportunity to be transparent,” Kelly said. “I would like to see them try because they think it will work for them. A dealer has the ability to list a car with a true down payment amount, a true weekly or monthly payment amount and the appropriate disclaimers. They don’t have to do this on all of their cars. They can actually list some by down payment and some by selling price, or list some with no information at all.

“I would really encourage them to at least dabble in this notion of transparency because I think that they’ll find that their business becomes much more efficient,” he continued. “The reality is if they need $1,500 down to make a deal on a car, why would they bring in someone who doesn’t have it? It’s like the ultimate dating service. The dealer can say what it takes to make a deal, and a consumer who meets that criteria can come in and buy a car. It’s very simple. It’s a very solid way to start a long-term relationship.

“The big movement we want to accomplish is start to move toward this transparency and trust between dealer and consumer, which is a good thing for them as a business and a good thing for the industry as a whole,” Kelly concluded.