By now, lots of people are used to buying CDs, books and clothes through the Internet. So why not cars, too?
A slate of online car-buying sites have popped up, giving shoppers basically two choices: using the Internet for research and then trekking to the dealership to make a deal, or wrapping up virtually the whole deal on the computer.
The approach you choose probably depends on whether you have the time or desire to negotiate, and whether you're comfortable making such a big buy with a keyboard and mouse. Even then, you're bound to have an eye on price; namely, whether you think you're getting a good deal online.
For now, at least, most people seem content to use Web sites just for homework. CNW Marketing Research in Oregon estimates that about half of car buyers used the Internet during their search for a new ride. That's not surprising, given the plethora of data shoppers can arm themselves with - including invoice prices - before they set foot in a dealership.
Still, only 1.5 percent of buyers conducted the entire sale through the Web, CNW Marketing Research says.
J.D. Power and Associates came up with different statistics but reached a similar conclusion. Chris Denove, a partner in the firm who studies online car buying, said though the number of people buying cars online is still small, it's increased sharply in the past year.
Until now, only the most sophisticated Internet users have had the confidence to buy a car that way, he said. "Most people still feel the need to work with the dealer face-to-face," he said.
That's why even though those sites have the potential to eliminate the sales departments at dealerships, he doesn't expect it to happen anytime soon. Plus, many of the online services still use contact with a local dealership as part of their business models.
But is it cheaper?
Lots of car-buying sites are out there, eager to get your e-business. Not all of them function the same way, so it's worth reviewing what each one allows you to do. Also think about what type of car shopper you are. These sites are generally geared toward customers who don't have the time or interest in negotiating. They pitch their "no-haggle" prices as a plus - something that people who like to do some dealing would see as a drawback.
Richard Lawrence of Purchase, who works for PepsiCo, went through CarsDirect.com to buy his new Honda Accord. Lawrence turned to the Web site because he was looking for a hard-to-find Accord, one with roll-up windows and a stick shift.
As it turned out, the car Lawrence bought came from Ray Laks Honda in West Seneca. It was trucked to him in downstate New York. "Everything was in perfect order," he said.
He found the price competitive -- he prefers a fixed price to haggling -- and liked being able to compare the price that CarOrder.com would charge with the invoice and sticker prices on the same site.
Lawrence said he wasn't uncomfortable buying a car without test-driving it first; he said he'd rented Hondas before and basically knew what he'd be getting.
"The process is pretty straightforward, and they had pretty good access to inventory," he said.
There's disagreement among researchers whether online car buying will save you money. CNW says customers ended up paying an average of 5.5 percent more for their vehicles online last year, and suggests that's one reason so few people actually buy their cars that way. J.D. Power's Denove said customers are saving an average of $500, and cites that as one reason online car buying sites are growing.
Consumer Reports tested five online car shopping sites earlier this year and came away with gripes of its own. Among them: Many services were slow responding to e-mailed requests, and among those that did respond, they often referred shoppers to local dealerships to obtain solid price quotes.
Price is obviously a big, if not the biggest, concern when it comes to online car buying. But sites also differ on local dealer involvement. Franchise law still requires new-car sales to go through dealers, but the extent of customer contact with them varies.
Some of the services allow you to do practically everything over the Web.
Other sites act as referral services for local dealers. Customers can look over what's available but not actually buy anything on the site. Instead, they're referred to a car lot to get a quote or follow up. That's how the National Automobile Dealers Association's site, DriversSeat.com, works.
Greenlight.com pitches itself as a halfway point for customers who like the convenience of Internet shopping but still want local accountability after the deal. The service has hooked up with dealer networks around the country, including the Buffalo market.
Customers select the specs -- make, model, color and the like -- Greenlight gives them a "no-haggle" price and finds a local dealer with the car in stock. Buyers complete nearly the whole deal online, but they're directed to that dealership to wrap up the paperwork and get the vehicle.
Dealerships logging on
Some sites have found online car buying to be a rocky road. CarOrder.com has suspended its operations, blaming thin margins and high costs for brokering cars. The company will try to re-emerge by buying up dealerships and hopes to resume Web-based sales down the road.
Meanwhile, the automakers are cranking up their own sites to tap into online buying. Ford Motor Co. announced it's teaming up with 4,200 Ford dealers nationwide to promote sales through the Internet at FordDirect.com. The program will start in California and roll out to the rest of the country next year.
Even the auto dealer trade group NADA is telling its dealer members that the sooner they get on the e-bandwagon, the better off they'll be.
Dealerships that have operated Web sites since 1995 -- ancient times in the world of the Internet -- are generating 13 new-vehicle sales per month based on Web leads, according to NADA. Dealers who launched sites just last year or this year are getting five a month that way. Those figures translate to 156 sales a year for the old hands and 60 annually for the neophytes.
Most Internet referals for local dealers are coming through a local site, BuffaloCars.com, according to Richard K. Welte, president of the Niagara Frontier Automobile Dealers Association.
About 50 dealers post their inventory on the site, which is a joint venture between the NFADA and The Buffalo News. The site allows consumers to search by type of automobile and price range.
"Our dealers that have subscribed to BuffaloCars.com are doing very well. The consumer loves it. It has a local flavor, it's not a national company that promises everything and maybe can't deliver," Welte said.
Shoppers interested in cars found on the local site can ask to be contacted via phone or e-mail from a representative of the dealership.
Maybe buying a car online now doesn't seem as natural as ordering the latest Harry Potter book or Sting CD. But if the forecasters are to be believed, that's going to drastically change, and soon.
Jupiter Communications predicts that in 2004, 8 percent of U.S. new car sales will come through online sales. That adds up to 1.3 million sales, compared with a meager 17,000 last year.
WHEELS ON THE WEB
A sampling of Web sites to shop for or buy new cars:
Autobytel.com: Allows customers to buy cars by getting quotes from dealers or following up with an Autobytel employee.
AutoNationDirect.com: Users can search the inventory themselves to find out prices on cars they're interested in or have an Internet sales manager call them back. Customers can arrange to visit a dealership to acquire the vehicle or have it delivered.
Auto.priceline.com: Following the Priceline model, customers name the price they want to pay for a car and wait to hear back from dealers. Customers don't talk to the dealer until after their offer is accepted.
AutoWeb.com: Site lists sticker and invoice prices. Users submit information about the car they're looking for, and dealers call back with price quotes. Customers can then decide whether to buy.
Buffalocars.com: Customers fill out basic information about the car they're interested in and it's forwarded to a local dealer who responds to the request.
Carpoint.msn.com: Offers price quotes from dealers based on a shopper's car specifications. Also offers retail and inventory price ranges, reviews and comparisons with other vehicles. Its partner site, Driveoff.com, offers up-front, guaranteed price quotes.
CarPrices.com: Customers submit details on the car they want, then dealers respond with competing prices.
Cars.com: Offers a range of prices, background on vehicles. Customers submit information and get a call from a dealer.
CarsDirect.com: Customers buy their cars through the site and then pick them up at a local dealer, or in some cases, have them delivered. Site shows what CarsDirect charges, as well as invoice and sticker prices on vehicles.
Greenlight.com: Customers complete nearly the entire purchase over the Web, but they're directed to local dealers to finalize paperwork and pickup. Users can compare the Greenlight price on the site with invoice and sticker prices.