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Internet vs. Traditional Car Buying
Hello:
I'm an editor at Edmunds.com and I've written many of the advice pieces. Now I need your help.
I'm doing research for a story that tests the way cars are priced. Specifically: if you walk on the lot and ask for a price on a car they will probably quote you sticker price and try to stick to that. But if you go through the Internet department, the same car will immediately be discounted.
Has anyone had this experience? Can any of you post your stories and the prices of the cars involved. I need this information for my article.
Thanks for your help.
Philip Reed
Consumer Advice Editor
Edmunds.com
I'm an editor at Edmunds.com and I've written many of the advice pieces. Now I need your help.
I'm doing research for a story that tests the way cars are priced. Specifically: if you walk on the lot and ask for a price on a car they will probably quote you sticker price and try to stick to that. But if you go through the Internet department, the same car will immediately be discounted.
Has anyone had this experience? Can any of you post your stories and the prices of the cars involved. I need this information for my article.
Thanks for your help.
Philip Reed
Consumer Advice Editor
Edmunds.com
Philip Reed, Edmunds.com Senior Consumer Advice Editor
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Comments
Truthfully, I've seen it go both ways. Somtimes the customer gets the right salesman and sometimes they get the wrong internet guy. Usually the internet or fleet managers come in low right away; where the salesman's job is to protect the dealer's profit margin the internet manager's is to move product.
How many stories do you want? We could write a book.
Ed
I'm moving a ton of used cars on eBay and autotrader.com and I do put my "bottom-line" pricing there as a rule..
Bill
PA.. ya missed the fun this week!
On the whole, it was a pleasant buying experience. There was none of the dickering over price or stress of negotiating. Instead, I got to do things at my own pace in an environment that I was comfortable in. The only anxiety I experienced in the whole process was in waiting for those emails responses to role back in. I would recommend it to anyone buying a new car.
On the flip side, I do have some recommendations for dealers. I know I may be speaking to a lot of converts already, but there are a lot of things that a dealer can do to increase the likelihood that I, as an internet buyer, will buy from you. I found that the most useful responses were from dealers that used some sort of form. These responses included some details about the car, price, destination fees, dealer prep fees, and any fees associated with titling or registering the car. By being upfront with all the not so obvious costs of a car, those dealers earned a long hard second look from me. Also, and perhaps most importantly, be courteous in your response even if the price the customer is asking is totally out of whack with what you think you can sell the car at. I sent my emails out to dealers with an offer based upon Edmund's TMV, so I did not think my offer was way out of line for my area. I received several offers that were close (but it turned out they couldn't get the color I wanted on a 2002, so I got the great deal on a 2003). However, a couple of dealers were pretty rude in their responses. One responded that they would not "devalue our product in such a way. This offer is unacceptable." While I may not have the capacity to understand the economics that drive automobile pricing beyond simple supply and demand, I am capable of figuring out that if dealer X , Y, and Z can sell that car for $200 more than my offer than it is not really "devaluing" the product that much. However, if it is unacceptable to you, suggest something that would be more reasonable. I was amazed that I could contact dealers with a stated intent to buy a car for a certain amount of money TODAY and be told "Sorry, can't do that" and not receive some sort of counter offer. To me, it would make sense to at least give me your best price. You might be a little higher, but it does no harm to ante up and get in the game. You might be a couple of hundred bucks higher, but I might be willing to pay that. Maybe your dealership is on the way home from my office or my child's daycare. I might be willing to part with a little more of my hard earned dollars for that little bit of convenience. You will never have the chance to find out and take some of my hard earned money from me if you don't at least suggest what would be a fair price for you.
I'm sure most car salespeople see their share of buyers who want to nickel and dime you so that they can save a buck of two. As a buyer, I want to get a price that I think is fair, to me and to you. After using the email method to purchase my new car, I'm most likely to recommend to my family, friends and co-workers the dealerships that did all the things I described above.
I personally don't think I'll buy another car by walking into a showroom to sit down and negotiate again. It's not a perfect method, but it really puts the power in the hands of the buyer. If I bought the old way and you treated me like cr@p, I had to get up and leave, wasting a lot of my time. If you do that to me now, one simple keystroke and PLONK! you're filed in the trash with all of the other spam that I get.
I do want to thank all of the great contributors to these forums. They provide a lot of information that makes the car buying experience much more palatable. If more sales people were like the ones that frequent these forums, I think most people would not have such a negative opinion of the process.
I also looked at the Ford/Mazda Tribscape, Xterra, Pathfinder and one or two others.
In the process of using the Internet to research them, I wound up on manufacturers' sites that said design your car and e-mail local dealers FOR A PRICE. I believed them. HA!
Okay, I tried two or three. All I got back was invites to come on down and talk.
If I had wanted to come on down and talk I wouldn't have been sitting there typing my info into the pc, e-mailing it and waiting for an answer.
They lied on the sites, or they don't know what their representatives are really doing.
Thanks for listening.
John
I did not want to go down to the dealership and talk. That's why I used the internet. I wanted a damned quote, no more, no less. Why is that so frigging difficult in this business?
Last month I was looking for a new ML320, so I emailed the dealers & also all the internet sites like Stoneage, Autobytel, etc.
Of the 3 dealers in the area, one never replied, one quoted me FULL MSRP as their "best price" (and I was already one of their customers) after about a week, and the third dealer sent me a letter two weeks after my inquiry asking me to go to their dealership and talk to them.
Pissed me off so bad I went and bought a new Envoy. (With a GM Employee Discount, so internet shopping wouldn't have made any difference anyway)
When I was buying my Altima, I emailed 6 dealers for a quote. 3 of them called me and wanted me to come down and talk. 1 never replied. 2 gave me a price quote, and I bought from the cheaper one of those two.
It is truly amazing to se what some people will put themselves through in their quest to get the "best" price on a car!
And beware of the lowball! I recently had a customer drive over 100 miles to "save" five hundred dollars on a new Civic.
When she got there, the car she wanted turned out to be a five speed and not the automatic she wanted!
" Oh...I could've sworn you wanted a stick...sorry, but the automatics are 800.00 more"
She stormed out, drove another 100 miles and bought the car from me.
Sadly, a lot of shoppers wold have simply caved in and bought the car from the store that lied to them.
The sites say "Choose Model, Color, Options and Click Here To Get A Quote From A Local Dealer."
What part of this am I misreading?
Appears deceptive to me. It should read click here to get bravo sierra.
John
When I emailed, I emailed out an offer for a new car. I named what was included in my offer and what costs the offer did not include (tax and tags). I indicated I was buying that day from the first dealer that met my offer. While I was willing to pay a little bit more than I offered, many dealers did not even make a counter offer. If you give me a fair price quote you are more likely to earn my business than if you say "come on down and we'll talk".
As I said, I was looking to buy, not shop. It would make sense to me to give a quote even if only 1 out of 10 inquiries is looking to buy.
I think the internet is an incredible resource for the consumer in the car buying process. It helps level the playing field and allows me to make best use of my time. I would recommend it to everyone.
" I'm willing to pay 18,250 for a XXXXX and will buy it today...can you do that?"
That will get a response.
"Give me your "best price"? These requests are generally ignored since the vast majority of them amount to nothing.
It's not 1 out of 10....not even close!
No biggie; you got what you wanted, those who didn't respond are out a sale.
Are you more likely to agree to an offer that is slightly low if it is coming from within your normal sales area or outside of it?
Although I think I may be still smarting from being turned down by that cute redhead when I was a gawky teenager, being rejected by a salesman just seems puzzling to me. If you really don't want my money, fine with me. I don't understand it, but there are a lot of things in life I don't understand.
Close-rate-wise, I have a little better than 13% of "raw" offers accepted this month. That includes the people who are trying to save 50% off on a new car and crazy stuff like that (those mostly get ignored). I have a little over 30% of "reasonable" offers, those that dealers are likely to respond to, closed. Some of these are cars that have been configured incorrectly, usually the wrong options or color combinations are a sticking point.
My response rate from dealers is running 76% month-to-date, a little above average. This means that a lot of my offers were still either too low, too small a search area or configured badly enough that the dealers didn't reply to the request.
I collect a deposit from my customer, tell the dealer about it and they still don't always respond. Go figure. You can't throw money at some people!
Had a guy on a Highlander last week. Hard enough to find, but he wanted something that will have to be special ordered. No problem. The dealer down the street was offering to sell it to him for invoice and had a buy-down rate to 0% for 36 mos.
I saved him a lot of time and effort. I told him to go buy it from my competitor. If they're dumb enough to throw away that much money, they have my blessing.
I explain it like this. "Yes, Mr. customer, you can always save $100-200 shopping my number somewhere else, but you'll have to go through the typical "dealership experience" that you were trying to avoid in the first place by shopping on the internet. Now, I can deliver your new car to you and you can sign the papers on your kitchen table with no BS and you can have that day of your life back to do something worthwhile with your family. How much is your time worth to you?"
I'm looking through a few of my last surveys here... "we paid more with Ed than our local dealer, but loved the process"..."wasn't the least expensive, but provided the best service"...It goes on and on.
Ed
What cracks me up is when the customer is trying to buy one of my vehicles from another dealership. I had that happen with an Avalon a couple of months ago...the guy calls and tells me that his local dealer will sell him MY car cheaper than I will (again, not by much). I informed him that I didn't have to trade the car with that dealer, then I told him how easy I could make the whole process on him, and we delivered it that afternoon. One of the surveys I mentioned in the above post was from that guy.
Ed
You dealer guys are always telling us thick skulled customers that we should focus on the "out the door" price and if that's the price we're willing to pay, we should shut up and be happy with that and not worry about saving $100 for the dealer across town. So, I similarly advise your side that if you truly quoted your "best price", YOU should be happy because that's the lowest price at which you are willing to sell the vehicle, and not worry what the dealer across town is doing.
Quote your best price - no more, no less. Problem solved. Please, tell me what am I missing. I want to hear this.
There is no single "best price." In my emails and telephone conversations, I quote someone a very competitive price, which varies by the type of vehicle, market conditions, etc, but I also mention to them that if they have a lower price from another dealer, I'd certainly do everything I can to beat it. My compensation relies on me making the dealership money, so I don't always quote the lowest price (in the first conversation). Nobody does.
There are also intangibles that add value to a transaction (my service) that I should be compensated for. I'm going to say this again, at the risk of seeming repetitive, THE LOWEST PRICE ISN'T ALWAYS THE BEST VALUE.
I'm sorry that you don't like the color of the sky in reality.
You haven't heard of anyone here posting a thread called "I got my car for free because two dealers have a promotion where they will beat anyone else's deal by $500!!" have you?
Believe it or not, dealerships are in business to make money. If another dealership is going to beat my quote significantly, they can have the deal, because usually the "haggle to the last $50" customer is a perpetual problem on the surveys also.
I'm not trying to be condescending, but what part of this aren't you understanding?
Ed
So the insanity has its' limits with those guys.
What number do you give?
just because a customer walks in the door demanding his "best" price.
If the customer can convince the dealer he is a serious buyer, has the cash, and is willing to take his business elsewhere ..
... can generally get the dealer's "best" price without too much effort.
The act of doing this is called negotiating.
To expect to get it without negotiating is sort of entrapping the dealer into a lie.
Now you're telling me that "the actual cost of the car can change daily because of many factors".
I'm just confused - is cost really cost, or isn't it? I'm guess I'm just too thick to understand.
In order to beat their prices, you have to expend effort.
Hmmm... would that be like "There are no free lunches in the real world" ?
Ed
hud
hud
The mooch buyer knows something must be amiss but can't resist checking it out.
And often they will simply cave in and buy the car from the sleazy dealer who lured them in.
Too bad...
Car_man
Host
Smart Shoppers / FWI Message Boards
I've bought my last two cars via the internet (if you count email as internet, this was a large part of it):
Car 1: 1997 Nissan Maxima. I browsed the dealer's web site, and contacted them via e-mail. They had fixed pricing for customers who found them via the internet - 1.8% over invoice, plus about $100 in doc fees. They had the car I wanted, I went in, test drove it, and bought it (cash transaction). Total time in dealership: less than one hour. No hassles, no pressure.
Could I have gotten it cheaper? Yes - the weekend before I bought it, their Sunday ad contained my car for $100 less than what I paid (I hadn't noticed it in the ad). When I asked for an explanation, the internet guy said he had no idea it was advertised for that price, but since the deal was done, he couldn't give me money back. So instead he gave me a $100 credit for service. Would a salesman on the floor have given me that price if I didn't ask for it? Probably not.
Car 2: 2003 Toyota Sienna. My company belongs to a group called MassBuyPower, which pre-negotiates prices with specific dealers for each manufacturer. I contacted them via email about the Sienna, got a reply to go to a particular dealer and talk to a particular person, where I would get the car for $200 over invoice plus $200 in doc fees. I so called them up, made an appointment, did a test drive, and bought the car (cash transaction). Total time in dealership: < one hour. No hassles, no pressure.
Could I have gotten it cheaper: maybe. The really large Toyota dealers around here are always running ads that make it look like I could have saved several hundred bucks over what I did pay. It's really hard to tell, because the ads are deceptive (asterisks all over, rebates go to dealer, have to buy the day you come in, yada yada). I had no interest in spending half a day dickering, though. I thought <2% over invoice was good enough.
Conclusion: while I may be leaving a few hundred bucks on the table by not spending all day grinding down the dealer, the pleasantness and hassle-free nature of the experience more than makes up for it. Besides, I don't begrudge the dealer a little bit of profit. All my research was done on the internet, so I knew what I wanted and what the prices were before I started looking for a dealer.
I'll never buy another new car the old way.
Ed
In both cases,the entire negotiation process lasted about 5 minutes and we paid a fair price.To us the convenience and ease of the transaction was more important than trying to save the last $100 or so.
With sites like this one ,it is now pretty easy to know if you are getting a fair price or not-and in the experiences I've had the car guys know that-so they offer a fair price pretty much upfront-we countered once and we were done.
Price is only one of many components...
I have always found best price on internet. I can sit at my time, email 7 dealers and ask for best price or meet my price and I will seal the deal.
I have found though that some dealerships internet service is a waste of time. The "so-called "internet special" price is nothing special at all, just all smoke and mirrors.
When I bought my Aurora, I was getting internet prices that varied by thousands of dollars.
When I joined the masses on my '03 Ody I actually got the best price by picking up the phone a getting a salesman through blind luck. But since I had problems with this dealer on the ordered vehicle, that eventually turned out ok. I had a network of about 5 dealers who would email almost weekly saying this color/model came in or this customer walked are you interested in the car.
I would think that the knowledgable, current generation of customer is going to demand more of this internet service. And the dealers who stay cutting edge will be the most successful. IMHO
Sorry for the long winded post...