| BUSINESSWEEK ONLINE : APRIL 26, 1999 ISSUE | ||||||||
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| PERSONAL BUSINESS
Kicking Tires on the Web By the time you see car dealers, you should know as much as they do Pssst. Wanna buy a car cheap? These days, you can get a better deal for almost anything via the Internet--and cars are no exception. You can't actually buy a car on the Net--franchise laws in most states prohibit it. But you can do everything right up to the point of signing on the dotted line. The Internet puts you in control of the buying experience. The wealth of information available for free on thousands of Web sites has pretty much leveled the playing field for car buyers and sellers. Some would even say the buyer now has the advantage. ''People now can walk into a dealership knowing more than what the dealer's salespeople often know,'' says Peter Steinlauf, president of Edmund Publications in Beverly Hills, Calif. If you want to purchase a vehicle without dealing with a salesperson or dickering over price, submit a request for your dream car through a buying service such as Autobytel.com or Microsoft's CarPoint (tables, page 120E2). You'll have a firm bid by E-mail or phone from a nearby dealer in a couple of hours, and can close the deal in a day. If you think you can save more, and like the negotiating process, you can shop the bid around to other dealers, inviting them to beat it. But have your guard up when you get to the showroom: The dealer may try to make up the difference by low-balling your trade-in or selling you a high-margin extended warranty or alarm system. FIVE FOOLS. When you're beginning your online car search, Edmund's is a good place to start. It and CarPoint are the two most comprehensive auto sites on the Web. They give you all the tools you need to figure out what a car cost the dealer and how much you can expect for your trade-in. But Edmund's has the edge. It displays a keen sense of humor and pulls no punches when it comes to telling it like it is. Take April's ''Top Five'' column, ''The Top Five Cars Fools Drive.'' The winners: the Mazda B-Series pickup, AM General Hummer, Cadillac Catera, Ford Excursion, and the entire Daewoo car line. The Korean-built Daweoos are ''the most foolish cars in existence,'' Edmund's concludes. If you don't know what car you want, the Internet offers lots of places to look. Every manufacturer has its own site with specifications and pictures. They're good for sorting out confusing option packages--whether, say, you can get the top-of-the-line audio package with CD changer without having to ante up an additional grand for leather seats. General Motors' new BuyPower service even lets you search dealers' lots to see where your car is in stock. But manufacturer sites omit the most important fact: what the dealer pays for the cars and trucks. To unearth those details, go to such specialists as Edmund's, Kelley Blue Book, or AutoSite (www.autosite.com). Of the car-buying sites, only CarPoint has resources as complete. CarPoint also has three separate reviews for most cars, including one written from a woman's perspective. What these sites provide is a way to calculate the dealer's invoice price on a car and its options, meaning what the dealer paid for the exact car you want. Just as important, they explain the hidden sources of dealer profit, such as ''holdbacks''--a 2% or 3% kickback from manufacturers to dealers to help them finance their inventory. You can also use the Web to ferret out advertising fees some dealers try to add, and to keep track of customer rebates, which salespeople sometimes don't know about or forget to mention. And you can find dealer-incentive payments from carmakers. Retailers don't have to give them to you, but you can use them to exact a better price. Links from these sites can also get you quotes on everything from financing to insurance to extended warranties. You may want to have these in hand when you show up at the dealer to buy your car. But be sure to shop around. Mostly, the links point to paying partners who may or may not offer the best deal. All that free information from Edmund's, for example, is paid for by fees or commissions Edmund's gets for referring you to Autobytel.com or NationsBank's CarFinance.com site. At a minimum, however, such sites can help you figure out how much car you can afford, whether you should buy a new or used car, and whether you should lease or buy. And www.financenter.com features a nice collection of online calculators. They'll walk you through such issues as whether it's better to use a home equity or auto loan or to take a carmaker's $2,000 rebate or its 1.9% financing deal. About the only thing that's difficult to find on the Internet is an easy way to compare auto lease costs. Edmund's has a good primer with an example you can use as a template for your own deal, and there's a lease calculator at LeaseXpert.com. Consumer Reports has a leasing worksheet you can print out and fill in, though you'll feel like you're doing your income taxes when you use it. A word about Consumer Reports. Long the standard print reference for car buyers, it comes up short online. While its site offers some free advice in its Bumper to Bumper section, to get ratings and reviews you'll need to subscribe, for $2.95 a month or $24 a year. Details such as invoice pricing, widely available elsewhere for free, cost $12 for the first vehicle, and $10 each for other reports ordered at the same time. Before you make your final choice, you might want to check what the experts have to say. The car-enthusiast magazines' Web sites, such as www.caranddriver.com or www.roadandtrack.com, maintain archives of car reviews. As much as they claim otherwise, magazine reviewers pretty much find something to like about every car, and you have to read between the lines to figure out what they really think. More valuable are their drive-offs, where they review a series of like vehicles, such as four or five family sedans, and rank them. WHEN TO WALK. Once you're ready to make a deal, log on to one of the car-buying sites. The largest is Autobytel.com, which sells as many cars as its two closest competitors--CarPoint and Autoweb.com--combined, according to market researcher J.D. Power & Associates. If you're having trouble finding a used car, try AutoConnect, which lists the largest inventory. All of them give you a firm quote in hours. If the quote turns out to be not so firm and the dealer wants to charge for extras, or the car's the wrong color, take a walk. Then go back to the buying service and report the dealer. Chances are, though, you'll get what you want at the price you want. Take Bill Townsend, who bought his red 1995 Mazda Miata from a Sunnyvale (Calif.) dealer referred by Autobytel.com. ''It was a huge savings of time and effort,'' the 33-year-old Oracle marketing director says, ''but the real value was taking the haggling out of the process.'' Now that the buyer is in control, you may just be able to persuade the dealer to deliver the car to your door. That way, you can be on the road in a new set of wheels--without ever setting foot in a showroom. By Larry Armstrong _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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