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

Statement at the Conclusion of an IMF Staff Mission to Chad

The mission held constructive discussions with Prime Minister Emmanuel Nadingar, Finance Minister Gata Ngoulou, Infrastructure Minister Adoum Younousmi, and other senior officials. more »

EBRD helps improve quality of electricity supply in South Caucasus

The EBRD is helping to improve the quality of power supply and stimulate renewable sources of energy in the Caucasus with an €80 million sovereign loan to Georgia for the construction of a new high voltage transmission line - the Black Sea High Voltage line, which will interconnect Georgia and Turkey. more »

New railway bypass in Tbilisi

The EBRD is helping to improve the infrastructure of the Georgian capital, Tbilisi, with a €100 million loan for the construction of a new railway route bypassing the city. more »

"Notre Europe" chair Tommaso Padoa-Schioppa on the euro

One of the men considered to be the founding fathers of the euro currency met MEPs on the Foreign Affairs Committee Tuesday (16 March) to talk about transatlantic relations. more »

Commission consults stakeholders over trade policy towards developing countries

European Trade Commissioner Karel De Gucht today opened a conference focused on the European Union's trade policy towards developing countries. more »

Results Profile: Mexico Finance

At the beginning of the 2000s, state ownership in financial intermediation in Mexico accounted for about 20 percent of the total credit of the banking system, provided through development financial institutions and funds. more »

European Enterprise Awards 2010 – 12 nominees shortlisted

Halving the number of business failures by offering individual support, doubling the number of young people who want to start their own business or raising by 500% the number of enterprising new cooperatives are just some of the projects nominated for the European Enterprise Awards 2010. more »

Companies are invited to apply for Marco Polo funding to fight road congestion and make freight transport greener

The European Commission has published the fourth call for proposals for the creation and upgrade of freight transport services under the second Marco Polo programme. more »

15 March 2010 - ECB announces EU-funded cooperation programme with the Central Bank of Bosnia and Herzegovina

The European Central Bank (ECB) today announced a programme of technical cooperation with the Central Bank of Bosnia and Herzegovina, in collaboration with a number of euro area national central banks (NCBs). more »

Commission pays €1 billion in Balance of Payments support to Romania

The EU disbursed today €1 billion to Romania, the second instalment of a €5 billion loan, which was agreed in May 2009 as part of a multilateral financial assistance package. more »