A family of Idaho-based auto dealerships has joined a budding nationwide program that lets customers buy cars online.
Kendall Auto Group, based in Boise and holding almost 40 franchises in Idaho, Oregon and Alaska, has joined the JoyDrive network. It lists both new and used cars for sale and lets people buy them without having to visit a dealer.
Michael Skillern, president and chief operating officer of Kendall Auto Group, compared the process and people’s acceptance of buying cars online with buying groceries online.
“I tried that a couple of years ago, and didn’t think it was a great process, but it’s been refined,” he said. “People are willing to make a purchase like this online. There’s so much information out there for customers to compare makes and models that people feel comfortable with that.”
Kendall Auto Group is the first Idaho-based family of dealers to join the network, said Hunter Gorham, CEO and founder of the Seattle-based company, which launched in 2016 and started selling cars in 2017. Since mid-2018, it’s grown from 3,000 cars to more than 30,000, and from 15 dealers to more than 140 in 14 states.
“Because we already had a strong position in Washington and Oregon, Idaho was a natural next step as a bolt-on state,” Gorham said.
The initial buying process takes from a day to about a week depending on whether the customer has all the credit information ready and knows what sort of vehicle they want. Cars have one price, which eliminates haggling. The car can then be delivered in an hour to a day or so later, depending on how far it is. There is a distance-based delivery fee, which means that people from the lower 48 and Alaska most likely aren’t buying each other’s cars because the fee could be another $2,000, Skillern said.
Customers have a five-day return policy on vehicles, which gives them time to try the vehicles out and get them checked out by local mechanics if they wish. People who want to return a car need to bring it back to the dealership. The return rate so far is about 1%, Skillern said.
While Kendall has joined similar networks for used cars, this is the first one to include both new and used cars, Skillern said. In addition, customers can sell their cars online through the network, and trade their existing cars in when they buy other ones.
Kendall has created a centralized team in Boise to assist JoyDrive customers and process their transactions. That team is located in its corporate office rather than in the dealerships, Skillern said.
In addition to buying and selling cars, Kendall is also partnering with JoyDrive on advertising in the Northwest, which should help make people more aware of the network, Skillern said.
“Compared with other online providers, it’s growing pretty quickly,” he said. “In the next couple of months, with advertising, it’ll probably be more prominent.”
Dealers like Kendall pay a monthly flat fee regardless of how many cars they buy or sell through the network, Skillern said.
“It’s very similar to most of the third parties with inventory listing sites,” such as Cars.com or Autotrader, and costs a similar amount, on the order of $1,500 to $2,000 a month.
While JoyDrive expects to add more Idaho dealers to its network, Kendall gets some exclusivity, based on the territory and the brand of dealerships it runs there. For example, while Kendall has some Ford outlets in the Treasure Valley and some outlets in Oregon, it doesn’t have a Ford outlet in Bend, Oregon, so a Ford dealer in Bend would likely be able to join the network, Skillern said.
Skillern said he expected this business model to grow as people get used to it, but it’s unlikely to eliminate tire-kickers entirely.
“There will always be people who want to touch and drive different cars,” he said.