Changing the Car Buying Experience: Imitation Breeds Innovation

On February 27-28, 2013, Edmunds.com is hosting Hackomotive, an event open to anyone with an interest in changing the way cars are bought and sold. Participants will form teams to address a particular issue within the car-buying process and then develop a prototype to solve the problem. At the end of the second day, teams will present their prototypes to a panel of judges, who will award the winning team $10,000. Opentable's Chief Technology Officer Joseph Essas will serve as one of the judges. Below are some of his insights as he awaits the event.

1. How broken is the car shopping experience in your view and why?
   There are several problems. One is there's no real price transparency. It isn't clear what the car really should cost. There's all those convoluted methods of invoice, below invoice, above invoice, True Market Value, MSRP — all kinds of things which are confusing, I think. On top of it there's the complexity of lease vs. buy and it's not clear what you're actually getting and for what kind of pricing and how those two compare to each other. The moment you walk into a dealership you get completely confused in terms of money.
   
   Second, there isn't a feature transparency. Every car manufacturer names things differently, so we have no way to really compare apples to apples. And all this packaging of features in different packages makes it even more confusing.
2. Have you or someone you know had a bad car shopping experience? Could you tell that story?
   For my last car we came to the dealership knowing what we wanted, did all the research, and we knew we wanted to buy the car. But somehow the guy convinced us that leasing is better and he upsold us a bunch of packages that we didn't ask for. I ended up with something completely different, paying a completely different price and when I walked out I said, "Why did I do this?" I wanted a Chevy Suburban-type car and I ended up with a Denali XL fully loaded, and I thought it fit in my price range, but then I discovered in the small print that the lease was longer than I really wanted. It just left a very poor taste in my mouth.
3. What does an ideal car shopping experience look like to you?
   "Ideal" to me is, first of all, the least amount of interaction with humans in a dealership. Number two is real clarity on comparing things between different models. Ideally you want to get to something which Apple is great at, which is "here is an iPad and there's three versions — 16, 32 or 64 GB" — and it's explicitly clear how different they are from each other and everything else is the same. So in cars, you can have a similar thing. Like with a Honda Accord you can have good, better and best. So it's very simple, not convoluted and the choice is yours. And ideally it should be done online because there's no need to interact with somebody.
4. What would you like to see come of the Hackomotive event?
   Any innovation around the simplicity of comparison. Cars can be distilled down to three levels: good, better, and best. That's something that nobody's done and it's not easy to do. So any innovation around ways to do that in a pragmatic way I think is interesting.
   
   In terms of pricing, anything that simplifies the pricing structures to something where you can buy it with a monthly payment of $499 or you can lease it for $399. And that's it, no negotiations. There are so many levers the dealers play in those things that the consumer has no way to quantify them.
5. Any words of advice for the participants?
   The best advice would be to pick a product that you love using and try to imitate the good things about it. So if it's Apple, take the simplicity of it and try to imitate that simplicity of transaction. If it's another service, understand what makes it so great and just imitate that.