News flash: Online car buyers confused.
Wait a minute, you say. Is that news? Car buying is for many consumers the most dreaded, anxiety-provoking consumer experience.
Well, the fact that online car buying has followed the lead of its real-world counterpart is news — and bad news at that — for e-commerce.
Most people I know would much rather buy a house than a car. Yes, houses cost 10 times as much and take 30 years to pay off instead of five, but there’s only one price listed in the newspaper for a house.
Cars are another story. The model in the newspaper ad with the thousand cash back? That’s only an example, the salesman says. That model was sold, but let me show you something in your range … you know the drill.
Fizzled Revolution
So along comes the Internet, promising to revolutionize the car-buying process. And in many ways, the potential for revolution is there.
However, all that car Web sites have managed to do so far is move the confusion from the corner parking lot to the Net. At least that’s the conclusion of a recent study from CNW Marketing Research, which found that the car prices quoted online were often higher than the prices dealers offer people in the offline world.
Driver’s Seat
I tried to use the Internet to buy a new car just a few months ago. As advertised, it was a good way to research and compare makes and models. But when it came time to compare prices, all hell broke loose.
A local dealership had its “Internet-only” deal posted on the model I wanted, so I dropped him a note. What about the cash back that the dealer was offering? Can that be included?
Days passed with nothing back. Then, finally, a phone message arrived, asking me to call the dealer back so he could explain exactly what “cash back” really meant. The dealers who promised me the rebate? Well, they weren’t liars, not exactly, but, well, it’s complicated.
But it shouldn’t be. A price should be a price. And the price on the Internet should be a lower price, right? Otherwise, what is my motivation for using the Internet at all? If I’m going to save a few hundred dollars by driving to the dealership, then I’ll do it.
Game Console
Now, however, it is pretty clear that there are games being played with car prices on the Web. And it’s a dangerous game that could take Web car sales down a dead-end road.
After all, who is better equipped to find out the true invoice price for a vehicle than a savvy Internet user? And that is precisely the type of person most likely to try to buy a car online.
The CNW study says “consumers are not as trusting of online automotive data as they were just a year ago.” That’s definitely driving in the wrong direction. It’s probably not too late to reverse, but damage done this early in the game is not easy to erase. Shoppers have long memories.
Facts Is Facts
The solution? Make the Web side of car buying as much of a fixed-price, open-book scenario as possible. Everyone should know up front what the offer is, how the options and custom choices add up, and all of those extra, hidden details.
The idea of using the Web to sell products on price alone died with a couple hundred dot-coms in the past year or so. And the automakers and dealers aren’t about to undersell themselves online, effectively taking money out of their own pockets.
But consumers need some reason to use the Internet to actually buy cars instead of to simply look around at makes and models. So if price is out, that leaves only convenience and ease-of-use.
If car shoppers click away from an automotive Web site more confused than when they click on, online car sales will remain stalled for a long time to come.
What do you think? Let’s talk about it. 
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.
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Although the online car buying experience is a little confusing at times, I’ve found great results from Edmunds.com with their True Market Value numbers as well as listing invoice and suggested MSRP prices. All three prices allow the consumer to understand how low dealers can go and when you’re getting ripped off. After using these numbers, I was able to buy a 2001.5 VW Passat for $300 under actual invoice (though the mistake was the dealer’s for quoting me 2001 invoice instead of 2001.5, as the selling price). I’ve visited the other numerous car sites and wouldn’t recommend them to anyone. Edmunds.com certainly has them beat.
Please, forgive me if you don’t get a better price purchasing an automobile over the Internet. Car dealerships and salesmanagers have been negotiating with purchasers for decades through their salesmen on the sales floor. I’ve been there.
The Internet creates a more informed potential purchaser, however it does not change the desire for gross margin on the part of the dealerships. Messing up the price, not getting back to well-informed Internet purchasers, trying to get them into the dealership to increase negotiating advantage are all part of the sales process.
The Internet is just one more obstacle a dealer faces in maximizing gross obtained from the purchaser. And this is not likely to change until the dealers themselves are replaced – concurrent with radical change in the reward system used to motivate sales managers and salesmen.
Sorry!
Also, if you’re leasing a car, leasecompare.com is an excellent gauge of the rates you should be getting, so you can enter the process prepared no matter where you choose to lease.
The confusion most people experience from on-line car buying is directly attributable to the business model most of the sites employ. Virtually all of them take some revenue from the dealerships they use. If the dealerships profit from confusing the consumer, then it follows that a virtual extension of the dealership on the ‘Net is going to profit from that same confusion.
There are only a handful of car buying/info sites that don’t have any affiliation with dealerships.
The most confusion-free sites are:
http://www.carbuyingtips.com
http://www.carsos.com [which is about the only car buying site that doesn’t take money from dealerships]
http://www.clarkhoward.com [an overall consumer awareness site that has a great “Cars” section]
Just my $0.02