New Roads to Owning an Auto

The automobile is the one major consumer product that has defied the mass marketing that dramatically changed the selling of other goods. Despite the industry’s sporadic experiments in making car buying more consumer-friendly--Saturn is a leader in that area--some shoppers are still looking for ways to avoid the dreaded ritual of haggling. For the haggling-averse, the low point is often near the end, when a salesperson “throws in” an unnecessary undercoating or turns on the hard sell for a costly extended warranty. That can sour the excitement of the purchase. Finally, though, change is on the horizon.

Wary, weary consumers are seeking alternatives. Some car buyers are using Internet services to research and actually purchase vehicles. Others are turning to car brokers, who charge nominal fees to find the best price. A number of companies are attempting to create nationwide chains of car superstores. If the new stores can reduce expenses, consumer prices should fall. And buying a car could become about as easy as purchasing a TV, refrigerator or stereo system.

It’s happening now with used cars at fledgling superstore chains. These stores, part of publicly held companies, use economies of scale and access to cheap capital to finance large inventories. Their salespeople do not work on commission, and the cars have firm sticker prices.

The fragmented U.S. car distribution system includes 22,000 new car and 60,000 used car dealers. Of course there are plenty of well-run and fair dealerships that have loyal followings. But many potential car purchasers are dead set against any negotiating and are candidates for alternative ways of buying.

It’s too early to tell whether the new retail outlets will have an enduring impact. But they were the talk of the dealers at their annual meeting in Atlanta earlier this month. Auto manufacturers, who once brushed off the notion of radical change, are watching closely. The $1-trillion car business could be changing in a big way.