The biggest shift in the automobile industry over
the past five years hasn't been America's love affair with the SUV
or, more recently, the arrival of fuel-sipping hybrid gas-electric
vehicles. It isn't even the tons of rebate cash and zero-interest
financing that accompanies almost every new car.
It's the Internet.
Now the Internet is crossing the last frontier in
the new-car process -- online negotiation and purchase.
"First the Internet gave people information,
leveling the playing field,'' says Mitch Golub, president of Cars.com,
a site that offers consumers research material and then can connect
them to one of its 7,100 participating dealers.
"Now you can choose which car you want and
then decide how you want to interface with the dealer'' to complete
the purchase -- online through e-mail, through phone calls or
a traditional visit to the store.
John Thomas, an industry analyst with the National
Automobile Dealers Association, says increasing numbers of dealers
are reaching out to the Internet consumer by upgrading their Web
sites.
"In the beginning, most dealer sites were pretty
static. You couldn't do much more than send an e-mail to the dealer,''
Thomas says. "In the last four or five years, dealerships
and even manufacturers have upgraded their sites to the point
that consumers can look at what's in a dealer's inventory and
see photos of the actual cars.''
Philip Reed, consumer advice editor at Edmunds.com
and author of Strategies
for Smart Car Buyers, says he sees the sales pendulum
swinging more toward Internet transactions, particularly as younger,
more computer-literate consumers reach the age where they regularly
shop for new cars.
"Slowly and quietly the percentages are tilting
toward online,'' he says, predicting that soon as much as 30 percent
of a new-car dealer's business will come from the Internet.
So what's fueling this trend?
In part, it's a result of our busy lives. Golub
points out that through the Internet a shopper can cover several,
even dozens of, dealerships in just minutes, compared to spending
days driving from one lot to another.
But a much bigger factor is that Internet shopping
can, depending on the site and dealership, eliminate much of the
haggling factor -- the part of new-car shopping that people, especially
woman, say they hate the most.
"A lot of dealerships have set up fleet or
Internet sales departments where the sales person is on salary
and gets a bonus for volume,'' Reed says. "They're not in
the business of trying to gouge you. Many don't even have sales
backgrounds.''
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-- Posted: Feb. 15, 2005
