Report: 75 Percent Of New Car Dealers Now Online

About three quarters of new car dealers in the United States have Web sites, and that number is expected to grow to nearly 90 percent during the next six months.

The National Automobile Dealers Association, which released the results of its online retailer survey yesterday, said the number of online auto dealerships has grown nearly 25 percent over 1998’s figures.

Dealers Use Web For Information

New car dealers are still focusing primarily on disseminating information on their Web sites, rather than actually selling cars, the auto group said.

Almost all sites allow customers to view inventory and check prices, but less than half process information input by consumers online. About 40 percent of new car dealer sites let customers complete finance applications online, and at 42 percent of the sites, customers can schedule service appointments.

Despite their NADA classification as franchised new car dealers, most such retailers also sell used cars. NADA did not release data differentiating online information for new and used vehicles.

Third-Party Sales

Actual online sales of cars and trucks are still being left primarily to third party Web sites, such as Autobytel.com, the Microsoft Network’s CarPoint.com and Cars.com.

According to NADA, more than half of all new car dealerships with Web sites subscribe to Autobytel.com’s or CarPoint.com’s services. Cars.com, meanwhile, works primarily with local newspapers, whose classified advertising divisions have already established relationships with major auto dealerships in their communities. The Web site has about 130 local newspaper affiliates signed on.

The number of online dealerships working with online sales sites increased from about 31 percent in 1998, as online auto sales sites have ratcheted up marketing efforts. Forrester Research predicted this summer that the market will get hotter in coming years, with new online car sales jumping from 15,000 this year to 500,000 in 2003.

NADA publicly endorses the concept of third-party Internet-based services as an advantage for consumers.

This endorsement comes despite the potential conflict such third party sites may eventually create with franchised auto dealers’ sites.

If the franchises ever begin selling cars online, there may be conflict between them and the third party sites. In spite of this siutation, NADA has endorsed them because the sites help consumers find specific vehicles and pass consumer inquiries to participating dealerships, the dealers still have the power to close sales.

About NADA

NADA helps consumers and its 19,500 franchised new car and truck dealer members use the Internet as a tool in the purchasing process. Consumers can locate online dealers through a dealer locator service or connect to vehicle manufacturers on the NADA site. In addition, they can access information about the value of various used vehicles on NADA’s separate Official Used Car Guide site.