CONSUMERS : Professional Advisers Ease Sting of Buying Cars

Next to sky-diving and rock climbing, opening the door to an automobile showroom is one of the riskier ventures in life. A pool of sharks will size you up, estimate their profits from your purchase and dig in their heels for a negotiating marathon.

In some cases, the consumer comes out a big loser. A recent study by Northwestern University found that minorities and women pay higher prices for cars. In the worst case, black women were quoted prices $800 higher than white men.

I am often asked by readers if there is a way out of the showroom charade that would insure the buyer on the one hand a low price and on the other hand freedom from the time-consuming problems of dealer shopping.

There are several alternatives to directly buying your own car and if you are not a dedicated shopper and hard-nosed bargainer, you could possibly come out ahead.

The alternatives include automobile-buying services that charge you a fee, auto brokers that obtain a commission and warehouse outlets that arrange discounts on certain makes of cars.

The auto-buying services do not buy or sell cars, but act as a purchasing agent for the buyer. They typically charge a flat fee and guarantee to refund the fee if the buyer can find a lower price for an identical car within a specified period.

AutoAdvisor, based in Seattle, is one of the first of this breed that assists buyers for a flat fee, which starts at $287 for a standard order from a factory. (The organization can be contacted at (800) 326-1976.)

You specify what kind of car you want and the AutoAdvisor will shop dealerships in your area to find the lowest price. The company claims it can obtain a lower price than the typical consumer because, in addition to dealer cost data which is widely available to consumers, it conducts extensive research on hidden money that auto manufacturers provide to dealers.

For example, many manufacturers provide cash rewards, vacations and contests jackpots for car salesmen, said Ashly Knapp, owner of AutoAdvisor. Acura had a program in which a customer was shown an invoice that made it appear that he or she was getting a new car at dealer cost, but the dealer later was credited $1,025 for the car, he said.

The other advantage the service claims to have is that it surveys the market to determine the supply-and-demand situation for specific models, providing it with a better understanding of day-to-day prices than a single consumer.

Under the firm’s price guarantee, if a consumer finds an identical car at a lower price within seven days, the fee is refunded. The problem with this arrangement is that the lower price car must be identical, even in color, which may be hard to find.

For AutoAdvisor to be worth the expense, obviously it has to beat the price a consumer could find by $287. Knapp said that since the service takes no money from the dealer, it is working only in the interest of the car buyer.

An alternative way to buy a car is a broker, which also shops among dealerships for the lowest available price.

The auto broker, however, obtains his payment from the dealership and it is wrapped somewhere in the price you pay the dealer.

You won’t find brokers listed in the Yellow Pages, but many leasing firms will broker a car for you. In some states, brokering a car is illegal.

A third alternative is warehouse stores or membership discount clubs that sell new cars at a set low price. These prices are typically discounted by a set amount, but typically not below dealer invoice. The prices are often not subject to further negotiation.

Vartabedian cannot answer mail personally but will attempt to respond in this column to automotive questions of general interest. Do not telephone. Write to Your Wheels, Times Mirror Square, Los Angeles 90053.