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It pays to click around before buying a car Shoppers who use Web pay 5% less for cars

The Internet has forever changed the way many customers buy new cars, including how much time they spend at the dealership, a new study concluded.

Car buyers who start out with Internet research of vehicles spend an average of one hour and 20 minutes less at the dealership than those who don't tap into the Internet for information, according to a study by Debu Talukdar, associate professor of marketing at the University at Buffalo School of Management, and two other researchers.

Their study also found that Internet users actually devote more time to their vehicle searches, in pursuit of better prices.

Talukdar worked with Brian T. Ratchford of the University of Texas-Dallas and Myung-Soo Lee of Baruch College on the study. They compared survey data collected from Buffalo-area car buyers in 1990 -- the "pre-Internet" period -- 2000 and 2002.

Talukdar said the study, published in the June issue of the Journal of Consumer Research, provides evidence to support what customers have long perceived about the Internet's influence on car buying.

Car buyers who used the Internet for research spent about 20 minutes less negotiating a sale price than non-Internet users, and about five minutes less on test drives, the study found.

About 60 percent of new-car buyers were using the Internet as of the last data period the study used, the researchers said. Talukdar noted the percentage has continued to grow since then, to about 70 percent in a J.D. Power and Associates estimate.

Frank Downing Jr. of Towne Automotive Group agrees that the Internet has dramatically changed the way many people buy cars. By going online, consumers can determine what features and colors they like, compare models and prices, and estimate the value of their trade-in, he said. It also saves them from having to travel from store to store to comparison shop, he said.

"Someone can come in and buy a car now over a half-hour lunch," Downing said.

Dealership sales people will still give customers as much time as they want, but some customers prefer a shorter process if they have made decisions before they came in the door, he said.

Eric Zaczek, a 22-year-old Niagara Falls resident who works at Wegmans, recently bought a 2007 Saturn Aura following a thorough search of his options on the Internet.

Zaczek used a variety of Web sites, from the manufacturers' to the dealers' and those with car reviews, to identify what he liked and what was available. When it came time to visit dealerships, he plotted the most efficient way to reach them.

"I feel like I had productive days," he said. "I wasn't just driving aimlessly."

It was through the Internet that Zaczek discovered the Aura, which he hadn't seen on the road. But by the time he visited the Saturn dealership, he knew a lot about it from his research.

"It really just came down to the price," he said.

Darlean Monfon, an Internet sales professional for Northtown Automotive, said she has watched customer use of the Internet rise over the past 11 years. "I've seen it grow constantly," she said.

Customers use the Internet to make the buying process more efficient, sending in inquiries about vehicles with specific features as they work toward making a deal, she said.

The study by Talukdar and the two researchers found that customers who use the Internet rely, in part, on independent sources such as Consumer Reports and Edmunds, but have migrated from the print versions to the online versions.

Though the Internet is seen as a quicker, more efficient way to conduct research, the study found that Internet-using customers actually increased the amount of time they spent on hunting for new cars, as they compare models and features.

"They're not irrational," Talukdar said. "They see there is a benefit to that extra time."

That benefit comes in the form of the sale price, he said. Studies indicate that people who use the Internet for research pay an average of 5 percent less for their new vehicles, thanks to the additional knowledge they bring to the process.

With auto research Web sites offering information such as transaction prices, sometimes down to the ZIP code, customers can enter a negotiation knowing what others have paid, Talukdar said. While customers still have to negotiate a price, Internet-based resources help them narrow the range, he said. "The spread in price is getting squeezed."

About 81 percent of customers who used the Internet looked at manufacturer Web sites, while 53 percent looked at dealer Web sites, the study said. The manufacturer sites were also rated highest on the "helpfulness" scale.

Talukdar believes that third-party research sites have probably grown in popularity since the study's last set of data was compiled. High-speed Internet access has become much more common, making it easier to run searches, he said.

While the study found 40 percent of car buyers weren't using the Internet for research, he said even those customers still enjoy an indirect benefit of the technology by getting information from friends and family members who are Internet savvy.


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