Decades of Automotive Insight with Industry Expert Jack R. Nerad
Jack R. Nerad is an award-winning writer, editor, and consultant with decades of experience in the automotive industry. He currently writes, edits, and provides editorial consulting services for websites like forbes.com, drivingtoday.com, autobytel.com, and caranddriver.com.
In addition to writing countless articles, features, and road tests, Jack is the author of several books, including The Complete Idiot’s Guide to Buying or Leasing a Car and The GR Factor. He is also the host of the podcast, America on the Road. Before becoming an independent consultant, Jack was the Editor of Motor Trend magazine, the Editor of Automotive Age, and the Director of Publications at J.D. Power and Associates.
Here’s a glimpse of what you’ll learn:
Jack R. Nerad discusses his podcast, America on the Road
The impact that COVID-19 has had on commuting
How COVID-19 has affected the tech side of the automotive industry
The future of autonomous vehicles
Jack talks about his first piece for Dealer Marketing Magazine
The importance of creating trust within a dealership
In this episode…
There is no question that COVID-19 has required industries across the board to pivot if they want to meet the needs of their customers. Jack R. Nerad, a writer, editor, and consultant with decades of automotive industry experience, knows that COVID-19 has impacted the automotive sector in several ways—especially when it comes to the future of the car buying process.
Tune in to this episode of Inside Auto Podcast as Ilana Shabtay is joined by writer, editor, and consultant Jack R. Nerad. Jack provides his insights into the automotive industry and how COVID-19 has accelerated online car buying. He also discusses his predictions for the future of the industry, shares a story about his most recent car buying experience, and talks about his new book, The GR Factor.
Resources Mentioned in this episode
Sponsor for this episode...
This episode is brought to you by AutoLeadStar, a company that helps car dealerships engage quality customers on the web and convert them into car buyers.
Co-founded by Aharon Horwitz, Yishai Goldstein, and Eliav Moshe, AutoLeadStar’s state-of-the-art software automates a dealership’s entire marketing funnel and provides around-the-clock service for dealers.
Visit their website at www.autoleadstar.com to learn more about their around-the-clock marketing service.
Welcome to Inside Auto Podcast where we feature everyone and anyone you'd want to talk to in and out of the automotive industry.
Ilana Shabtay 0:14
Ilana Shabtay here host of Inside Auto Podcast where we interview top dealers, GMs, marketers, entrepreneurs and thought leaders in the automotive industry. And before we introduce today's guest this episode is sponsored by www.autoleadstar.com. AutoLeadStar is pioneering marketing automation in the automotive industry with sophisticated machine learning that future proofs dealerships marketing operations. Today I'm excited to welcome Jack R. Nerad who has spent decades in the automotive industry as a journalist, author, and communicator. Past positions held by Jack include editor at Motor Trend magazine, editor at Automotive Age, and Director of Publications at J.D. Power and Associates. In addition to writing countless articles, features and road tests, he's authored several books over the years, including The Complete Idiot's Guide to Buying or Leasing a Car, which, by the way, I should read, and his newly published book, The GR Factor, which he's going to talk a bit about today. Jack also hosts his own podcast that you should all tune into America on the Road. I highly recommend it for just good car reviews and automotive chitchat. Jack, I'm so excited to have you today.
Jack R. Nerad 1:25
Oh, Ilana, I'm so excited to be with you. It's a pleasure. Such a pleasure.
Ilana Shabtay 1:29
Yes. And I was just telling you this when we were when we were talking before the podcast, but we can really flip the script here and you with your expertise you can you could be running this podcast for us.
Jack R. Nerad 1:40
I think your audience would prefer you to run the podcast. So why don't you keep doing?
Ilana Shabtay 1:44
No, I'm not so sure. I did listen to your podcast yesterday. And today. America on the Road, what you said I think maybe something like 24 years, 25 years on air.
Jack R. Nerad 1:55
Yeah, we were on air for 20 plus years. 24 years, I think is is what we're claiming it actually started in 1992, 1993. I joined the show soon thereafter. And then was with the show until about 2012 when we kind of ceased operations for a little bit. And then we've cranked it up as a podcast most recently, in our heyday, we were on 300 stations across the country, CBS network and network radio. So there's a lot of fun. And I think it's equally fun now. So you know, thanks for thanks for liking the show and pitching it a little bit.
Ilana Shabtay 2:27
Yeah, yeah, I listen to the episode about as the guest had just driven from California to Florida, which seems to be the new norm for us. I also I just did a road trip from Miami to New York, and which was not fun at all.
Jack R. Nerad 2:46
Yeah, I can believe that.
Ilana Shabtay 2:47
Not easy with a one year old in the car. That's for sure. Wow.
Ilana Shabtay 2:51
Um, but have you been seeing that a lot? Have you just have you been seeing that people are just going to hop in their private vehicles more? And
Jack R. Nerad 2:58
well? Yeah, I think we have seen that. And at the same time, I think this week, we've had air travel pick up to the highest level since March. So I was on an airplane just yesterday. Going to a car event coming back from a car event actually. So I I think that's starting to change. But I think a lot of people want to be in their private vehicles. And that's really kind of a boon for the auto industry. Yeah, I've taken road trips myself, most recently, and, you know, 2500 miles, something like that. So Wow. A lot of that.
Ilana Shabtay 3:29
How is the flying experience?
Jack R. Nerad 3:32
Ah, there is really no social distancing at all, when you're on an airplane. I mean, there's just it seems impossible to do. I mean, I had somebody immediately next to me. I mean, it was inches away, literally inches away. I was on a small commuter jet yesterday, you know, maybe 50 passengers or something like that. And I was just kind of condensed. Yeah, I'll tell you why. It wasn't scary. And the other day, you know, it depends on how, what your level of care is right now.
Ilana Shabtay 4:02
Yeah, I agree with that. I just flew actually, for my first time in six months, and we'll actually flew an airline where they, they knock out the middle seats, which is nice, but you're still inches away from the person in front of you. And behind you.
Jack R. Nerad 4:16
Yeah. And then when you get up to walk out, you're, you know, in close proximity to the people to do so.
Ilana Shabtay 4:21
And of course, they serve the food and drinks at the same time. So everyone's taking their masks off at the same time. So, you know,
Jack R. Nerad 4:27
well, I think it's really interesting that the virus takes mealtimes off when we're taking mealtimes off. I think that's brilliant of day and very nice of the virus to do that.
Ilana Shabtay 4:37
That's very true. That's true, but but it's, it's, it's become clear that private vehicles are here to stay. And that emerging markets are coming from COVID. I can speak for the millennials that I have plenty of friends that were relying on Uber and Lyft and FIA and it was very comfortable to not have to buy a car and pay monthly payments. And that's not really an option anymore. Millennials I think are going to be a huge boom of this recovery for automotive.
Jack R. Nerad 5:08
Absolutely. I mean, we've seen a big rise in in value of used cars, a lot of people are switching out of any kind of public transportation into their own personal car. And that's a big boon, especially to the used car market, and also the entry level new cars, because those people are, are transitioning out of something that were low cost is really important to them.
Ilana Shabtay 5:30
Yeah. And you did recently write about commuting specifically and how COVID has affected commuting? And do you want to talk a little bit about that? I know, it's not what we expect.
Jack R. Nerad 5:42
Right? It really isn't what we expect. I mean, there's a bunch of different things going on. And in some ways, they're a little bit contradictory. Yes. You know, a lot of people are working out of their homes I at at some point, I am not convinced that we won't go back to work a lot like we were used to doing. And I think maybe sooner than a lot of people think but at the same time, I think a lot of people are grasping, I can work at home, it is possible, it's actually desirable for a lot of companies, if they can cut down on the real estate that they have to acquire and rent. It's good for them. I think they feel like they have enough control of their employees that everything is okay. But at the same time, I think we're going to see more commuting going forward, and it will change. And, you know, as you alluded to one of the big changes, getting off public transportation, and then getting into personal cars. And we're gonna see a lot, lot more of that, certainly over the course of the next year. No doubt about it.
Ilana Shabtay 6:44
Yes. While we think that traffic that COVID has affected traffic positively, we're we're going to be I think, hitting face with that because everyone's going to be in their private vehicle, and there's going to be no public transportation and traffic is going to be way worse. That's what it sounds like, at least
Jack R. Nerad 6:58
Yeah, I think that's going to be the case. I mean, I've done a lot of driving around recently, I drive for a living. So of course I would do that. Traffic is way different. I live in Los Angeles area, too. And traffic. Yeah, it typically horrible, less horrible now than it was, you know, eight months ago, 10 months ago. But that will it'll change again, too. And as you say, once people are in personal cars more so than public transportation. We're going to see more traffic that we saw before.
Ilana Shabtay 7:30
Yeah, we got to stay away from LA, then.
Jack R. Nerad 7:34
Yeah, I think a lot of people are leaving la in droves. Anyway. So I think that's another kind of interesting aspect of this is a lot of people are leaving urban areas, quite literally leaving and deciding, well, you know, if I can work from home, my home can be in Lake Tahoe. My home can be a you know, on a lake in North Carolina or at the shore or say, you know, so that's going to change the dynamic too. And in a lot of ways that's really good for personal transportation, like automobile.
Ilana Shabtay 8:05
Right? That is true. A lot of people are leaving all of the some of the biggest cities in the country. New York City is empty right now. From what I understand, I haven't I haven't actually visited New York City. Since depends. Yeah, I did some travel. I have not been in New York City since this happened. But I was in Nashville, Memphis, Birmingham, and they're all kinds of shelled out right now. I mean, hollowed out.
Jack R. Nerad 8:30
When you go to downtown areas, it's it's almost spooky, in a way. Yeah. How little is going on? It's a shame really.
Ilana Shabtay 8:39
It is a shame. It is a shame. And they're saying it's going to get worse this this winter. So we'll we'll see what
Jack R. Nerad 8:44
happens. But we'll see about that. I am not convinced that's going to happen. But I'm not an epidemiologist.
Ilana Shabtay 8:49
I'm not either. But I agree with you. I think we're preparing for the worst so that we can lower expectations.
Jack R. Nerad 8:55
Yeah, I think that's what public health officials typically do. Right? They want to prepare you for the worst. And then when it's not as bad as the worst, you know,
Ilana Shabtay 9:04
feels really good.
Jack R. Nerad 9:06
Yeah, exactly. Feel better, anyway. Yeah.
Ilana Shabtay 9:08
Yeah, totally. Well, on the flip side, you've also been tracking and writing a bit about the the tech side of things and what's come out of COVID or what COVID has accelerated for the tech side, dealer tech, automotive tech. Tell us a bit about that, Jack.
Jack R. Nerad 9:23
Well, it's really accelerated online purchasing. I think that was a trend to anyway, yeah, there are a lot of trends that point in that direction. And one of the trends is just the desire of consumers not to spend as much time on an automobile transaction as they have been in the past. When it takes, you know, when you have to commit an entire Saturday morning or an entire Saturday or you know, pick a day to do that transaction. I mean, people don't want to put up with that anymore. Time is too precious to folks. So that has accelerated online buying because you can do a lot of the stuff you know in the comfort of your own home. You know, sitting in your pajamas on the couch, if you want. And so I think we're going to see more and more of that I think we're, we're probably under 5% of all transactions are done online now. It might double in two or three years, I, I just think we're moving in that direction.
Ilana Shabtay 10:16
Do you think the entire transaction is going to be done online? Or do you think it's going to be 75% online so that they can spend half hour in the dealership to close the deal?
Jack R. Nerad 10:25
That's a really wise question. And that's an educated question. I appreciate that. Because I think probably the latter, I think a lot of people will like to get a lot of the just the paperwork, you know, the stuff behind them, some of the research, you know, maybe maybe even some of the negotiation, and maybe all of the negotiation, but then they're probably going to want to come in and see the vehicle kick tires, and take delivery and get that delivery process. If they can get most of the transaction done and feel good about it and just do the delivery at the dealership, I think that's, that's maybe the sweet spot or do as much as you want to do. By by you, I mean the consumer, and then get to a point where when you get into the dealership, you can take it up from there. One of the big problems with you know, early online stuff was, if you then stopped in the middle, you had to start over, you couldn't save your work, you couldn't, you know, go into the dealership and take it up from there, you had to re establish the whole thing. And that's a giant time waster. And I think nobody wants to waste time.
Ilana Shabtay 11:33
I think that's a really good point. I think that's one of the better things that COVID has accelerated, which is the the wake up call for dealers. But it's not just about the full transaction online, because I don't know how realistic that necessarily is. Although I think that the processes need to be in place for the for the markets that are ready for that. It's about the digital, the smart digital marketing, and actually being able to leverage technology to create that experience up until the person is ready to come in and make sure it's a seamless transition so that they don't have to start all over. That's it. I think exactly what and needs to happen. And it's going to happen with with dealerships that will survive this. Yeah,
Jack R. Nerad 12:13
and I think everything a dealership needs to do to do a fully end to end online transaction also helps the process when people come into the dealership, because what dealers have to do is put guardrails around what the salesperson can do, and you know, give the set what what dealerships have found is sales people learn a lot from what is offered to the consumer, if you put the guardrails on to say on grosses, for the consumer, so they can deal online, right? I mean, you could deal within a certain range, or you just have a one price, if you have that set up, that facilitates a lot of stuff for your sales, people who might not even know that those kind of parameters, right, they're now empowered to do much more of the transaction. Maybe they can go end to end on the transaction, where they constantly had to go, you know, back to a superior and get approval for a particular negotiation that they were on. And that's a consumer dissatisfied in and of itself.
Ilana Shabtay 13:22
Yeah, I was actually talking about this with the CMO of Roadster, Michelle Denogean, who was on our podcast couple weeks ago, and I know you you also wrote a piece about Roadster and what they've been doing. And she and I asked her the question, what are your successful dealerships doing? Like, how are they successfully implementing roadster? And she said, it's all about the process and educating and if the sales team isn't, it doesn't understand the power that they get from something like Roadster they're not going to be successful. And I think I think that's really an important important point. It's not just about digital retailing, it's about the process and what it can do for the sales person, even if the person even if the buyer doesn't complete the transaction online.
Jack R. Nerad 14:05
Right? I mean, you can't just buy software or buy a service. And you know, do six weeks of training and think bang, okay, I'm, I'm impact but not change anything else about your operation. And there's so much to gain. The dealership should really change their operations based on the new power that number one it gives to salespeople, but also how it just speeds the transaction. They can do more transactions, they can work you know, the sales people can work on multiple transactions at once if they're dealing online, versus sitting in an office babysitting somebody for the better part of a morning. Just making one deal happen.
Ilana Shabtay 14:45
Yeah, just so much more efficient. Right. And, and getting away a bit from dealer tech, but also just the connected car world and autonomous vehicles. I know you also wrote a little bit and spoke a little bit about how How COVID's accelerating that as well. Tell us a bit about that.
Jack R. Nerad 15:04
Well, it's kind of contradictory again, I mean, it's accelerating some aspects of it. And there's other aspects of it, where it's probably a big roadblock. You know, certainly a lot of people want contactless situations, right? You talked about your friends and Uber. And, you know, getting in an Uber to getting in an Uber was always a bit of a leap of faith, but now it's a giant leap of faith, right. And a lot of people just don't want to take that risk. Getting in a vehicle that is piloted not by a human might eliminate some of that risk might not, on the other hand, introduces
Ilana Shabtay 15:39
a whole nother risk. So
Jack R. Nerad 15:40
yeah, and and you're like, Okay, who is in this before you get out, because you're not the first one in and you're not going to be the last one in that vehicle that day, right. So there are different things that this introduces, I think those companies that are all in for autonomous vehicles, and that technology, this is accelerated, their growth accelerated their ability to move forward. I think for major car companies, not so much. Number one they had don't have the resources they have, we're going to have a lot fewer sales this year, they're going to have less revenue, less revenue for r&d. So that will probably knock down the the goal of getting autonomous into the marketplace really rapidly. Another thing I wonder about autonomous vehicles to is just the consumer demand for it. I know that engineers love the idea of it, you know, popular, it's popular in the general press to think we're going to have driverless cars in five years. And, you know, we won't have traffic accidents, because, you know, computers will be running things. And I would caution them. I mean, your computer fails too right. We've all experienced that. So
Ilana Shabtay 17:00
especially until it learns, that's the right machine learning. So I get very good. car in the beginning. No way. Yeah.
Jack R. Nerad 17:08
Yeah. You want to see at least has a full driver's license instead of just a learner's permit.
Ilana Shabtay 17:12
Yeah. 100%. That's a great. Yeah. So that's something that we should look out for. I know that it is a hot topic in press. I think it might be getting more press than then what what it's actually going to show in reality in the next five years, but we'll see. We'll see two more things I wanted to touch on with you, because you're really sharing your expertise here. You just joined the Dealer Marketing Expert Panel, which we're really excited to see how have you haven't shared your first piece yet?
Jack R. Nerad 17:43
I have. I have.
Ilana Shabtay 17:45
Okay, what was it about?
Jack R. Nerad 17:47
And it was largely about what we've talked about already in terms of online selling. And, and it really, I think, what we will see going forward and you alluded to it very wisely is kind of a hybrid of on complete online selling, you know, go from cradle to grave, from inception to delivery of the vehicle online, and instead gives the consumer the choice of how much they do online, when they do it online, and then going into the dealership picking up where they left off and going on from there, and all the advantages that not only gives the consumer which are many, but the advantages that is the dealership, which are many as well. I mean, they're they can be much more efficient doing.
Ilana Shabtay 18:37
Yeah. Yeah. What and condense more deals that way, just because you're not spending four hours with a customer. Right, right.
Jack R. Nerad 18:45
Yeah. And having things established having business rules established, so that there's really not so much mystery about price. You know, one thing I've learned through 30 plus years of looking at the car buyer, and I scrutinize the car buyer a lot doing the kind of writing and research that I've done through the years is the car. The typical car buyer doesn't want the absolute lowest price. They just want to feel like they were treated fairly and treated pretty much like everybody else. They really don't want to be a chump.
Ilana Shabtay 19:20
I think no one wants to be a sucker. Especially I
Jack R. Nerad 19:23
was like, Oh, yeah. And everybody has a tendency to lie about what they paid for a car and they lie low. I mean, typically, when you tell people if people ask you what you paid for your house, you might inflate the figure a little bit. Because maybe that kind of aggrandizes you a bit. Yeah, at the same time when you when somebody asks you what you paid for a car, you're always going to say man, I drove a great deal and I'm you know, way under invoice and a you know, everybody can have bought their vehicle under invoice. It just doesn't work out that way. We all know that. That's not The case,
Ilana Shabtay 20:01
but that's the art of the of the car salesman, right? They don't feel like they got the best deal,
Jack R. Nerad 20:07
right. And that's the interesting thing about buying a car too. I mean, the consumer can walk out having not gotten a particularly wonderful deal and feel very good about it. Right and be totally satisfied and go on about their business. And it probably won't affect them in any way shape, or form in any negatively in any way, shape or form. Or they can leave the dealership having gotten a great deal. And, you know, really kind of home run for themselves and go, Oh, maybe I left money on the table, you know, have some buyer's remorse. It's I think that's a big problem for the industry, in that a lot of people have, can have walked out of the dealership doing really well and feel negative about it. And they feel negative because they're always afraid somebody else did a little bit better.
Ilana Shabtay 20:55
Yeah. Yeah. I mean, try try selling to car dealers.
Jack R. Nerad 21:00
Ilana Shabtay 21:02
It is not easy. It's not easy.
Jack R. Nerad 21:05
Well in it, you know, but they're fun to talk to, too. And you know, they're, they're fun to deal with. I love going in to buy a car. Because I know that I have the ultimate power. And the ultimate power is I can buy that car or something very similar. Dozens of places. Yeah, they have power over me. I have power over the fact that I've got my wallet, my checkbook, and I'm in control of that.
Ilana Shabtay 21:32
Yeah. And you know, yeah, so know that if you walk out without buying that car, and the day that you walked in your best considered a fail on the dealership, as part, not every consumer necessarily knows that.
Jack R. Nerad 21:43
Right? I have literally had dealership people sales people, even the general manager of a dealership, follow me out into the park and saying, Would you Really? And because they don't want you to leave, right? They want to sell you not just a car, but they want to sell you a car today? No, because
Jack R. Nerad 22:09
you will never come back. Exactly. And they're probably right. No, I get it.
Ilana Shabtay 22:15
Yeah, yeah, it's true. That's a trick that I tell all my friends looking for a car, I say, just know that you have the power. And if you you consider walking out, you'll just get lower and lower to a certain point but get lower and lower. Like don't don't take the first don't take the first step.
Jack R. Nerad 22:32
Have fun with it. Yeah, you could really have fun with it. If you look at it from that point of view.
Ilana Shabtay 22:37
Now, have you ever bought a car from a one one price store, they have some of those I know Lexus was driving a big
Jack R. Nerad 22:46
I haven't bought from a one price store. But I bought the most recent car I bought for the family was at one price experience. I actually bought it from Budget Rent a Car, which was a terrific experience. You know, obviously they sell through a dealership. I don't know, I can't remember the exact parameters. But it was a one price situation. They're selling basically vehicles that are being used in rental service, and they take it out of rental service and let you drive it around for two or three days. And then you decide whether you want one or not. This was a car for my daughter, we actually looked at one decided that that wasn't quite it got another one of the same model that seemed to be in better shape. And we like more and we bought it and it was you know, just a single price. never talked to a car salesperson. all the paperwork was done either over a computer. And then the final stuff was by FedEx. And off. We got we had the vehicle, they sent another set of keys and we were done.
Ilana Shabtay 23:45
Oh, we should have started this podcast episode with that story. Yeah, that's interesting. When one was this, this was recently,
Jack R. Nerad 23:52
this was within the last year and a half, I think something like that.
Ilana Shabtay 23:57
That's interesting. That's a good option for for some people that might not necessarily want to negotiate.
Jack R. Nerad 24:02
Right now, they are selling particular cars, they only have some cars, they only have some level of equipment. They're generally about a year old to maybe two years old or something like that they have probably more miles on them than the typical vehicle of that vintage would have. So it's it's a slice of the market. It's not the entire market. But for people who are buying a transportation type of vehicle, like a rental car agency would have.
Jack R. Nerad 24:36
It was kind of a perfect solution for us.
Ilana Shabtay 24:38
Yeah. Well thank you for sharing that. And and before we sign off, I'd love for you to talk about your new book, The GR Factor.
Jack R. Nerad 24:46
The GR Factor is kind of a labor of love for me. And it kind of sums up a lot of my experience of managing people and dealing with people and understanding customer relation for the better part of four decades, the subtitle is unlocking the undeniable power of the golden rule. And I think the golden rule, which is the GR in The GR Factor, is just how you treat people. I've just written a piece on trust being really important in the dealership, and dealers don't do nearly enough, in my estimation, to establish trust between themselves, their personnel, and the buyer. And trust is the key to making a win win deal. And The GR Factor is kind of all about that how, how one treats customers how one treats employees, how one treats, you know, individual co workers who are of equal rank. And I think that's the way you get the most out of people. You know, it's, it's not simply altruistic, there is an altruistic aspect, certainly the treating people well. But there is also just the benefit of you get when you treat people well, when I you know, that was my management style, you know, not ask people to do what I would not do. Try to lead by example, by good example. And I think, overall, you get the most out of your people, you get the most self respect and respect from others by doing that. So that's really what the book is about.
Ilana Shabtay 26:25
And is it automotive specific?
Jack R. Nerad 26:28
There, it's not automotive specific, but there are a lot of automotive vignettes within it. A lot of it, you know, comes from my knowledge of, you know, customer satisfaction within the auto dealership, because that's what I've been studying for, for 30, 40 years. So
Ilana Shabtay 26:46
Great. Well, we can get it you can get it on Amazon. Google Books, Kindle.
Jack R. Nerad 26:51
Yes, it's everywhere. It's gonna go Yeah, it's on Apple books. It's, it's out there. So yeah,
Ilana Shabtay 26:57
that sounds like a great read. I'm happy we got a chance to get a glimpse into it. Thank you so much for joining us today, Jack. You are such a thought leader in the space and innovator. Any of our listeners, if you enjoyed this episode, please tune in to Inside Auto Podcast and I highly recommend America on the Road as well. Thank you so much. Thanks so much, Jack.
Jack R. Nerad 27:19
Oh, Ilana, thanks so much for having me on your show. I really enjoyed it. Yeah, it's really intelligent questions, and I thank you for that.
Ilana Shabtay 27:26
Thank you. Thank you for participating.
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