TrueCar CEO Scott Painter’s career in cars didn’t start on a showroom floor. After graduating from West Point, he went to UC Berkeley and started helping friends buy cars. To this day, he says, his mom still introduces him as a car salesman, even though he’s quick to point out that brokering felt more like order-taking than selling.
That vantage point, sitting on the customer’s side of the table, shapes how he sees the market today.
“Consumers tend to be price shoppers, but payment buyers.” Scott Painter, TrueCar
How Affordability Is Changing the Way Shoppers Buy Cars
Painter says buying a car is really four transactions bundled together, and a smooth sale has to handle all of them:
The car
The trade-in
The financing
The insurance
Most shoppers start by comparing prices, but they decide based on whether the monthly payment fits. With the average new-vehicle price above $50,000, according to Kelley Blue Book, and the average payment at a record $787, according to Edmunds, that payment is getting harder to hit.
Painter sees shoppers responding in several ways: moving from luxury brands to mainstream ones, from bigger vehicles to smaller and more efficient ones, and from new to used. The trend that worries him most is that many are simply waiting longer to buy.
Part of the fix is education. Some shoppers don’t know what a new car really costs, Painter says. A base Toyota Highlander and a fully loaded one can differ by tens of thousands of dollars, and a feature like all-wheel drive can add thousands that a buyer in a warm climate may not need.
Painter called the share of deals with negative equity, now 57.8%, “almost sort of the automotive equivalent of the big short.”
Why Pricing Clarity Helps Dealers Close More Deals
Painter isn’t a fan of the name of California’s new law, the Combating Auto Retail Scams Act, which took effect Oct. 1. He called the title offensive to dealers. But he supports what it’s trying to do: make pricing clear. The FTC is pushing in the same direction nationally, after sending warning letters to 97 dealer groups this year.
We agree with Painter on this. Clarity creates a confident customer, and a confident customer is ready to buy. Dealers who help shoppers find the vehicle that fits their actual needs, and their actual payment, build trust that lasts well beyond one deal.
The clearest price in town is a competitive advantage.
We dig into the conversation with Scott Painter on today’s episode of the Automotive State of the Union.
