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

EBRD set to take minority stake in Promsvyazbank

EBRD to pay 4.6 billion roubles for 11.75 percent stake. more »

Spanish Move to Alytus

On 24 November in London a letter of intent will be signed between Alytus Municipality and the Spanish aluminium company “Sopena group” regarding investments of the “Sopena group” in Alytus. more »

Lithuania invites China to benefit from tourism opportunities

Tourism opportunities in Dzūkija Region of Lithuania and other issues of incoming tourism promotion were the main topics of the meeting of the Mixed Intergovernmental Commission on Trade and Economic Cooperation between the People’s Republic of China and the Republic of Lithuania. more »

Belarus, Ukaine and Lithuania will be the first states to present trilateral Eastern Partnership projects

On 22-23 November in Kiyv, foreign ministers of Lithuania, Ukraine and Belarus discuss trilateral cooperation and participation of Belarus and Ukraine in the Eastern Partnership of the European Union. more »

Boosting energy savings in Bulgaria

The Kozloduy International Decommissioning Support Fund is supporting an innovative programme to boost energy savings and efficiency of public buildings in Bulgaria with a €5 million grant. more »

A return to robust economic growth not expected for at least another two years, immediate reforms a top priority- DnB NORD Economic Research Group

Bank DnB NORD’s Economic Research Group predicts that out of the six Baltic Rim countries, moderate economic growth will be seen in Poland, Finland and, possibly Estonia in 2010, while Denmark, Lithuania and Latvia will need more time to climb out of recession. more »

European Commission and IMF welcome reaffirmed commitments of the largest foreign banks in Hungary

In a meeting in Brussels of the European Bank Coordination Initiative held on 19 November 2009, the parent banks of the six largest foreign banks active in Hungary reaffirmed their commitments made in May 2009 to support their subsidiaries. more »

AB Bank SNORAS will be represented in the United Kingdom by the representative office in London

On 17 November 2009, the Board of AB Bank SNORAS decided to establish the bank’s representative office in London. more »

Commission approves €103 million capital injections for 'Mortgage and Land Bank of Latvia'

The European Commission has approved, under EC Treaty state aid rules, two capital injections in favour of 'The Mortgage and Land Bank of Latvia' (LHZB). more »

Ghana to sign first voluntary partnership agreement with EU on legal timber exports

The government of G hana will tomorrow sign an historic agreement with the EU aimed at ensuring that only legally harvested timber from the West African country is exported to the EU market. more »