A revolution is sweeping the car-sales industry, and much of it is being fueled by the Internet's World Wide Web.
What the Web sites offer consumers is leverage against car dealers, which have long held pricing information close to their vests. You can get information about dealer rebates and manufacturer holdbacks, or use services that do the negotiating for you.
The goal is to save you the time of going from one dealer to another and back to get the best deal. If the new approach takes hold, buying a car may become almost as easy as buying a doughnut.
Similar car-purchase services have been available through consumer advocacy groups, discount warehouse clubs, and print publishers. Now they are all in one place: on your home computer. And new services are being offered as well.
The primary Internet aid is called Auto-by-Tel (which can be found on the Internet at www.autobytel.com). Unlike car-shopping services offered by some manufacturers, such as Chrysler, Auto-by-Tel lets you order and buy a new car on-line. In fact, several warnings on the company's Web site admonish visitors to use the service only once they're serious about the car they want to buy, not as an information source to shop for cars, because that undermines Auto-by-Tel's credibility with dealers and its ability to get good prices.
Instead, Auto-by-Tel encourages customers to shop around at dealers and use other on-line information (ABT provides links to these other services), then contact Auto-by-Tel for the actual purchase. Auto-by-Tel then forwards the buyer's name and order to a local dealer, who calls the customer with a firm price, and, if the customer agrees, prepares all the paperwork in advance. The dealer can even drop the car off at the customer's doorstep, though most buyers prefer to come in, says Tom Ciresa, Auto-by-Tel's sales manager for Canada. The company has sold 350,000 cars in its two years of operation, and more than 40,000 of them in December.
Dealers offer good prices because Auto-by-Tel eliminates about $1,500 per vehicle in personnel and marketing costs. Affiliated dealers dedicate certain salespeople to Auto-by-Tel deals. They work on salary plus bonuses based on customer satisfaction and overall volume. The dealer gets other advantages, too: Sales increase 20 to 40 percent, helping dealers' volume and ability to get inventory from the factory.
"Most of our customers go in focused on price, and come out talking all about what a good buying experience they had," Mr. Ciresa says. Auto-by-Tel can also arrange financing and auto insurance.
The Internet is also likely to revolutionize used-car sales soon. (Auto-by-Tel is starting a used-car buying service this month.) But for this to happen will require an independent board to rate the quality of the used cars, because buyers can't inspect them fully over the computer, says Donald Keithley a partner at J.D. Power and Associates, in Agoura Hills, Calif.
Japan already has such a system, which rates cars on a scale of 1 to 10. Some used-car auction houses in the US are working on such a system, he says. And the manufacturers are starting down that road with their "certified" used-car programs.
Other Internet sites offer more traditional buying services that get a local dealer to submit a nonnegotiable competitive bid to the customer. The buyer then has to go to the dealership to take advantage of it. Microsoft's CarPoint (http://carpoint.msn.com) announced this week that it will start such a service. Three other such sites are are AutoVantage (www.cuc.com/auto), Auto Town (www.autotown.com/autotown.html), and CarSmart (www.carsmart.com). All these sites also offer comparison shopping information, though CarPoint is by far the best organized. All three also have operational used car services, though coverage is spotty in some areas of the country, for example in the northeast.
For those who prefer to make their deals themselves, a number of traditional car-pricing publishers have brought their information on-line.
Fighting Chance (www.fightingchance.com) publishes all its information on pricing and dealer rebates on the Web and updates it frequently. It also includes all the skills you'll need to have to put the knowledge to work.
Edmund's Buyer's Guides are also on-line (www.edmunds.com). Oddly, the site is not quite comprehensive when it comes to less popular models and options.
And the ubiquitous Kelley Blue Book (www.kbb.com) provides its used-car pricing service in the easiest-to-use format anywhere. But it gives only wholesale trade-in values, not what you could get selling your old car privately.
All these sites are free.
Used-car buyers should not miss one last site. VINguard (sterba.com/vinguard) will take a vehicle identification number and search the vehicle's history. For $19.95, you can be sure whether it has ever been stolen or involved in an accident. The site is temporarily down for reconstruction, but the service is still available by calling (707) 539-1444 or sending e-mail to: firstname.lastname@example.org
These services are having a profound effect on the way dealers sell cars, Ciresa says: "They're all having to learn how to deal with informed consumers."