Auto Dealers Hit the Road

Published: 7 November 1999 y., Sunday
In recent months, CarsDirect started selling straight to consumers, and Priceline.com added cars to its reverse-auction lineup. And on Monday, the latest site jockeying for position will enter the race, OpenAuto.com, promising to let buyers name their own price. But despite the growing traffic, a recent study raises questions about whether buyers are actually saving any money by avoiding the notoriously heavy-handed car sales force. Buyers who go through Web sites that lead them to dealers or that broker a deal for them end up paying more than would have had they gone straight to the dealer, according to a recent study by CNW Marketing/Research. Surveying 1.1 million car buyers, the firm found that buyers typically paid 6.5 percent more for a vehicle bought from an online broker than if they had gone to a dealer. An Autobytel executive questioned CNW_s study and said the site saves dealers about $1,300 per car in marketing and personnel costs and is able to pass those savings on to customers. Prices at CarsDirect are lower than most dealer retail prices, said CEO Scott Painter. The company sets its prices in the lowest 10 percentile of where dealers have priced theirs in the past month, according to Painter. "If we can_t find a car at the right price, we lose money," he said, adding that the company_s goal is 1 percent profit on each sale. Bid sites such as OpenAuto and Priceline hope to sidestep the question over whether buyers get the lowest price, by letting buyers specify the price they want to pay. If a sale goes through, dealers pay OpenAuto.com $150 per vehicle, while buyers pay no service fee. At Priceline.com, buyers pay the site a $50 fee. With OpenAuto.com, buyers can choose whether they want to finance through the site_s partner, LendingTree.com, through the dealership or through a third party. Priceline doesn_t handle financing, but CarsDirect and Autobytel do. OpenAuto.com also offers insurance through QuickenInsurance, car reviews from New Car Test Drive and information from Kelley Blue Book and MapQuest.com. Meanwhile, manufacturers are jumping in. Ford has invested in Microsoft_s CarPoint, which connects buyers to local dealers and launched in September. The company_s DealerPoint interface is even being distributed by Ford and Honda to their dealers. Ford has another investment in Carclub.com. Dealers are also getting into the online act; more and more of them are selling through their own online sites.
Copying, publishing, announcing any information from the News.lt portal without written permission of News.lt editorial office is prohibited.

Facebook Comments

New comment


Captcha

Associated articles

The most popular articles

Sustainable energy for Europe

In European sustainable energy week 2010, new EU energy commissioner presents strategy to reduce Europe’s dependence on fossil fuel. more »

EBRD’s new accountability mechanism goes into effect

The EBRD is launching a Project Complaint Mechanism, which is expected to enhance the accountability and transparency of the Bank’s operations. more »

New local currency financing for micro and small businesses in Armenia

The EBRD is boosting the availability of local currency financing in Armenia with a synthetic loan in Armenian Drams (AMD) worth $4 million to FINCA UCO CJSC for on-lending to local micro and small enterprises (MSEs). more »

Sirpa Pietikäinen on CITES: "Biodiversity at stake"

This year is the UN year of biodiversity and it brings endangered species into the spotlight. more »

Haiti: US$65 Million Grant to Restore Key State Functions and Infrastructure

The World Bank Board of Directors today approved a US$65 million project to support the recovery of Haiti’s critical infrastructure as well as the reestablishment of basic State functions following the devastating 7.0 magnitude earthquake on January 12, 2010. more »

Haiti Sets Out on Path to Recovery with Broad International Support

Haiti’s arduous reconstruction and recovery process jolted forward today following fresh commitments to help the Caribbean nation rebuild in the wake of its devastating January 12 earthquake. more »

New IMF-Supported Program Will Strengthen Uganda’s Policy Design and Implementation Capacities in the Transition to Oil

A mission from the African Department of the International Monetary Fund (IMF) visited Uganda during March 4-17, 2010, to conduct the seventh and final review under Uganda’s Policy Support Instrument (PSI) and reach understandings on a policy framework for a new three-year PSI to cover the period 2010 to 2013. more »

Common Agriculture Policy after 2013: free market will not save European agriculture

The European Economic and Social Committee (EESC), as the first EU institution, rose to the challenge of providing a comprehensive vision for the future of the Common Agriculture Policy (CAP), in advance of the European Commission's papers on the matter, due to be issued later this year and in 2011. more »

Europe and Central Asia Facing Energy Crunch

The outlook for primary energy supplies, heat, and electricity is questionable for the Eastern Europe and Central Asia region, despite Russia and Central Asia’s current role as a major energy supplier to both Eastern and Western Europe. more »

IMF Executive Board Approves US$790 Million Stand-by Arrangement for El Salvador

The Executive Board of the International Monetary Fund (IMF) today approved a 36-month, SDR 513.9 million (about US$790 million) Stand-By Arrangement (SBA) for El Salvador to help the country mitigate the adverse effects of the global crisis. more »