Auto Dealers See Delicate Balance in Online Quotes
Even on the Internet, the process you go through to buy a car bears little resemblance to the way we buy anything else.
With the exception of CarsDirect.com Inc., every site that sells cars on the Internet asks for personal information about you before showing you their price for a car.
We don’t do this for books, toys or music. Stock brokers will tell you how much the stock will cost without asking who you are. Even home prices are listed.
But the auto industry carries the same baggage it has in the real world into the cyber one.
People in general don’t trust car dealers, who rank dead last in the latest Gallup Poll of how people feel about the honesty of those in various professions. (Journalists were in the middle of the pack, just below funeral directors.)
When a salesman tells them the price of a car, people don’t believe it’s the best deal, and they shop around. Getting a price online makes the shopping that much easier.
Recently, that has been changing.
Pasadena-based CarsDirect.com began selling cars directly to customers, as opposed to passing their purchase inquiries on to car dealers, and posting their prices online. Last week, Autoweb.com Inc. said it will roll out direct sales at the end of this month, and Irvine-based Autobytel.com Inc. is testing a version of it.
“There are people who don’t feel safe dialoguing with the dealer, and if that’s the issue, we’re going to find out if that model is really of significant interest to the consumers,” said Ann M. Delligatta, chief operating officer at Autobytel. “We’ve put prices on the Internet, but it remains to be seen how well it’s going to work out for both the dealer and the consumer.”
If consumers walk into car dealers waving a price quote that they got online and asking the dealer to beat it, dealers may not cooperate with the online services.
Of course, other categories already experience that. Customers walk into Barnes & Noble bookstores asking to get the price they saw on the online counterpart, bn.com. Try to explain to people that they have separate operations and different cost structures.
While direct pricing is the current rage, it too has several flavors, and rival business models are emerging all the time. Priceline.com Inc., which touts its “name your own price” model, last month partnered with AutoNation Inc. Last week, online auctioneer EBay Inc. said it might get into the car-selling business.
What these business models have in common is that they want to avoid the messy and expensive business of actually setting up shops where people come in to browse and where they would have to hold inventory.
The key will be having a flexible organization able to identify and go with whichever model the market chooses.