No matter how you cut it, buying a used car can be a hassle. On a dealer's lot, you get pushy salesmen and somewhat limited selection. On the other hand, do-it-yourselfers face endless pages of classified ads, registration hassles, phone calls, visits to strangers, and nagging concerns about quality.
Relief comes in knowing that some of these issues can be handled quickly by e-commerce. A host of companies have come online to provide industry information, sell used rides directly, make referrals, match buyers and sellers, or serve as trusted third parties in a transaction.
About 32 percent of all US households that purchased a used vehicle from September 1999 through March 2000 used the Internet in their buying process, according to Gartner Group, a market-research firm.
While the number of people who actually completed a purchase in cyberspace, as opposed to window shopping or information gathering, is relatively low (only 1 percent of those respondents), "people are becoming more and more confident as used-car sites offer warranties and money-back guarantees to make up for the fact that, in some cases, you can't kick the tires before you buy," says Thilo Koslowski, an analyst at Gartner.
As consumer confidence grows, sales of used cars on the Web could jump from less than $10 billion in the US today to about $164 billion in 2004, according to IDC, a technology research firm in Framingham, Mass.
Even if you're not ready to buy a car in cyberspace, there are still a number useful sites to check out. Kelley Blue Book (www.kelleybluebook.com), Edmunds.com, and Consumer Reports (www.consumerre ports.org) offer great consumer tips, estimated used-car values, and safety reports.
Another site, Carfax.com, will take a vehicle's 17-digit Vehicle Identification Number (VIN) and provide a history report for about $20.
Perhaps the real strength of the Internet is its ability to scan large inventories and find used vehicles of a particular make, model, and location (using your zip code as a locator).
Sites including Autobytel.com and Cars.com play matchmaker to buyers and sellers, much like vast newspaper classifieds, while providing some warranties and financing services.
Autotrader.com touts a used-car "inventory" of 1.5 million listings with information on color, body style, engine size, various features, and sometimes photos. The service is free to buyers and sellers. The company makes money by selling ad space, links to other sites, and enhanced features for listings like boldfaced type.
Other sites charge a fee (Cars.com charges $20 to list your vehicle on its site for 14 days).
"We designed the company to help people streamline a difficult process and improve the decisionmaking process," says Autotrader CEO Chip Perry. The company's traffic has increased from 1 million visits a month last year to about 4 million now. Autotrader has also teamed with eBay to offer an online auction. The seller pays $25 to list a vehicle on the site and another $25 when a vehicle is sold. A link is available on Autotrader's home page.
Sites that track cars down
Other sites actually track down the kind of car you want, buy it, recondition it, and sell it directly to you. California-based iMotors.com searches wholesale auctions to find vehicles that meet a buyer's specification.
Once a car is found - and after the firm secures a refundable $250 deposit from the buyer - the company buys the vehicle, spruces it up, and ships it to a delivery center in the buyer's local market. Customers don't see the vehicle until they drive away with a seven-day money-back guarantee and a three-month, 3,000-mile warranty. The whole process takes about three weeks, and the average price is below blue-book value. "Only 1.5 percent of customers choose to return the car and usually it's an issue with the color or, say, a lady who can't see over the dashboard," says Adam Simms, CEO of iMotors.com.
Mr. Simms adds the company serves 20 percent of the US and will expand to 50 percent by the end of the year.
Zoomcar.com operates on a similar model but claims it will deliver the car to your front door. The downside: The company is only licensed to do business in New York, but says it is expanding into Cleveland and Phoenix.
The 'trusted intermediary'
Other sites position themselves as trusted intermediaries that help private parties cut a deal. Sellers with cars that meet BestOffer.com's standards can get a three-month, 3,000 mile warranty tacked onto their car to help sell it.
Listings posted on the company's site include photos, mileage, features, transmission, mechanical reports, title and lien checks, Carfax history, and service-record availability.
Sellers fork over 2 percent of the asking price of the vehicle if the car sells. Buyers pay $99. The service is only available in parts of California, but a company official says expansion plans are under way.
There are plenty of used-car sites out there, so check out www.forbesbest.com to find some of the better ones.
A few other points to remember:
&#8226;Some Web companies take trade-ins, so watch for opportunities.
&#8226;If you bid on a car in an auction, factor the cost of shipping, any fees, and taxes into your bid. Dealerships often charge conveyance fees that can range from $80 to $200 and sales taxes can be hefty.
&#8226;Many sites bundle financing and insurance on their site. Get estimates.
&#8226;Look into buying an extended warranty from your used-car dealer. But be sure you know exactly what it covers.
(c) Copyright 2000. The Christian Science Publishing Society