Changes transform used-car industry Superstores prompt dealers to focus on customer satisfaction


You can get valet parking, free day care, a complimentary car wash and cafe mocha on the house.

Just drop by your friendly used-car dealer.

The industry is undergoing a retail revolution that hopes to purge the image -- and fear -- of the backslapping, fast-talking salesman in polyester plaid.

Prompted by the recent emergence of the so-called "superstores" such as CarMax, Car Corp. of America and AutoNation USA, used-car dealers are suddenly rushing to win over consumers with quality products and service.

CarMax opened its first Maryland store in Savage in August. A second is under construction in White Marsh and slated to open next summer. Car Corp., which opened its first dealership in Rockville, is planning a second, in the coming year.

AutoNation USA, the second-hand auto seller launched by Florida billionaire H. Wayne Huizenga, is eyeing a site in Glen Burnie for its first Maryland store.

"There is no doubt about it," said Kenneth M. Gassman Jr., a retail analyst with Davenport & Co., "these guys are having a great influence on the used-car market. They're selling more than used cars, they're selling peace of mind. That's the bottom line."

"We know that people have their defense up when they come to any car dealership. They don't trust us. That's been the reputation of this industry. We're out to change that," said Jack Sayer, president of Gaithersburg-based Car Corp. of America.

It's not surprising. The industry has mushroomed into a $300 billion-a-year business, with used cars getting higher margins than new ones.

Today, shoppers are likely to encounter someone like Valerie Rubin, a cheerful, 20-year-old receptionist at the Car Corp. She sets the dealership's image even before customers get out of their cars by greeting them and providing valet parking, which includes a free car wash while they shop.

Rubin then directs shoppers into a spacious sales office with carpeted floors and upholstered chairs, where they sip steaming cups of cafe mocha and get to use a computer kiosk to browse through an inventory of 300 cars and light trucks.

Sharon Riley, a banker from Montgomery County, remembered car shopping to be as pleasant as having teeth extracted. But she said she was surprised by what she found last week at Car Corp. when she and her husband purchased a four-year-old Mercury Cougar.

"There was absolutely no pressure from the time we walked in the door until we left," Riley said. "Nobody tried to put us in a bigger, more expensive car. I hate that. It was great a experience. I recommended them to a couple of my co-workers."

It was a recommendation from a friend that convinced Eddie Ortiguerra, a senior airmen stationed at Andrews Air Force Base, to try the huge CarMax dealership in Savage.

"My friend said, 'It would be no haggling,' " Ortiguerra said as he completed the paperwork for the purchase of a 1994 Mitsubishi Galant. "He was right. There was none of this, 'Hey, have I got a deal for you' stuff that you always hear. The whole transaction was a lot more comfortable than any car purchase I've made before."

While parents shop at CarMax, children, like Ortiguerra'a two-year-old daughter, Alea, can frolic in a supervised playroom, filled with toy trucks, bean bag chairs, a big-screen television, Disney movies and a padded cage with knee-deep, baseball-size plastic balls.

Car Corp. has a similar Kiddie Room. As a protective measure, parents and youngsters are issued plastic coded identification wristbands, similar to those given hospital patients. And while they test drive a car, parents are given a beeper just in case there's a problem at the playpen.

But the changes sweeping through the used-car industry aren't limited to such conveniences. Increasingly, dealers are careful about what they sell.

Sayer of Car Corp., for example, said all cars sold must pass a 170-point inspection "that makes them as close to brand-new as we can." The vehicles come with a 12-month warranty, but if for any reason a buyer has second thoughts, a full refund is given within seven days or 300 miles.

"We don't want complaints," Sayer said. "We're not the lowest price in town, but we provide good service, and a good car at a competitive price."

"The only similarity between us and the traditional used-car lot is that we have the same product," said David S. Ruben, general sales manager at Car Corp. "Our goal is to be the Nordstrom of the used-car business," he added, comparing the company to the department store chain renowned for its customer service.

It's not just the superstore newcomers who are changing the industry. Used cars are an important part of most new-car dealerships, and they are aggressive in defending their turf.

"We're also out to make it more fun for used-car buyers," said Jerome Fader, president of Heritage Automotive Group, an Owings Mills company that operates 19 dealerships in Baltimore, Anne Arundel and Harford counties. "And that is true of most franchised car dealers today."

Two months ago, Heritage launched its own certified used-car program, which includes a money-back guarantee. "If for any reason you decide you don't like a car within three days or 150 miles," Fader said, "bring it back and we give you your money back. No questions asked."

There's free 24-hour towing for up to a year after the purchase, and buyers are provided with a free loaner if their car has to stay overnight in the repair shop.

The service department's hours have been extended and it is open on Saturday to accommodate customers' schedules.

"The days of used-car sales being relegated to a trailer out back are rapidly disappearing," said Donna Reichle, a spokeswoman for the National Automobile Dealers Association, a trade group of 19,500 new-car and truck dealerships.

Keene Dodge in Jarrettsville is an example. The dealership recently spent $200,000 to upgrade its facility -- half of the money went for a new used-car sales office.

Money is the motivating force behind many dealerships' new interest in used cars. Reichle said the average profit on a used car last year was $350. That compares with $77 for the average new car.

Raymond C. Nichols, chairman of BSCAmerica Inc., a Baltimore-based company that operates six auto auctions throughout the country, said the 1.6 million vehicles coming off lease programs this year provide a supply of late-model, low-mileage vehicles.

"Cars are made a lot better today," he said. "It used to be that you would throw a car away after 50,000 or 60,000 miles. Today, that is considered just getting a car broken in."

Extended warranties by the manufacturers, he said, are also taking a lot of the risk out of purchasing a used car. "For the consumer it is no longer a pig in a poke to buy a used car."

Pub Date: 11/16/97

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