Online Car Buying Revisited

From Edmunds.com

Several years ago, we were told that the Internet would change the way people buy cars. All that unpleasant haggling and game-playing at the dealership would be avoided. We would locate our car using sophisticated search engines and negotiate via e-mail. Better yet, we could solicit bids from multiple dealerships and choose the best price.

But then the dot-com bubble burst. According to the press, we were to believe that Internet car shopping went the way of online grocery shopping.

What we didn't realize was that, while the popular press was busy writing the obituary of online car shopping, the Web guys were just getting the bugs out of the system. Now it seems that the process is finally streamlined, practical and user-friendly. If you use it, it will save you time, money and frustration.

I'm not saying this based on some lofty user survey or the windy opinions of tech experts. I say this based on my own experience. I've been using the Internet to buy cars for the past two years. But while it always sped up the process, it didn't always take the place of good old-fashioned shoe leather and phone calling.

Until now.

My most recent Internet car buying experience made me feel that we have turned the corner on this process. High technology has been perfectly blended with the all-important ingredient: human touch. The Internet hasn't wiped out car salesmen, or women; it has made it easier for them to do their jobs. And easier for car buyers to get the car they want at a great price.

My assignment was to buy a 2002 Nissan Altima 3.5 SE for the Edmunds.com long-term test fleet. I needed the car at a good price and I needed to procure it quickly. I turned to the Web as I have in the past, prepared to take it as far as I could before resorting to the traditional hands-on methods.

When the scribes here at Edmunds choose a car to test, they like to challenge me by making a wish list of options and features that is highly specific (read: hard to find). They want this car, at this trim level, with this option, this other option and this feature - but definitely not this one - and they want it in this color with this color interior. What starts out as an easy-to-find car turns into a border-to-border search mission. In this case, I would be looking for a Nissan Altima 3.5 SE, with the ABS and side airbag package, traction control, leather, Bose stereo, sunroof and splash guards, in Nouveau Ruby with a blonde interior.

Searching is just what the Internet does so well. I went to our homepage and hit the "New Cars Prices & Info" button and entered my zip code. I followed the prompts to the vehicle page for the 2002 Nissan Altima SE and clicked on the gray bar labeled "Price this Vehicle With Options." I entered all the goodies we wanted and was able to see what our TMV® price was. Without having to retype the information, I clicked a button requesting a free quote from a local dealer.

After that, I went directly to the AutoNation Web site, typed in my zip code and selected the car I wanted. I found that there were 43 Nissan Altima 3.5 SE's in my area. One of them should have the options I wanted. Sure enough, within minutes, I found almost exactly the car we had configured. I clicked the button marked "Contact us" and requested a quote.

The next day, I checked my e-mail and found replies from several dealerships. The e-mail from Lew Webb's Irvine Nissan in reply to my AutoNation query, really caught my attention. Internet Sales Manager Marj Aldoph described the options on the car and the color. Then came this pithy phrase: "Your preferred Internet price is $27,417 plus tax and license."

First of all, I knew that this was a great price because I had checked our site to find out what our TMV was for this car. Secondly, it was nice to have the price clearly stated, up front, with the courteous reminder that tax and license fees would be extra.

Maybe this doesn't seem that unusual to you. After all, if you called a store and said, "How much does a Whirlpool dryer cost?" they would run over to the unit, find the price tag, come back to the phone and tell you. But if you call many dealerships, and ask what a hot-selling car will cost you, you get a variety of answers, such as:

1. "When can you come down and test drive it? I'm sure you're going to love it."
2. "No one can beat our prices. Come on in and we'll work something out."
3. "Fill out a credit application and we'll give you the best interest rate we can finance you at."

The price of a car is the most disguised element of car buying. And, in the past, the price might change according to the wind direction outside the dealership or the arrangement of the tea leaves in the sales manager's cup. But here was a firm and specific price, communicated quickly via e-mail.

When I turned on my cell phone, I found that Marj had also left a message for me on my voice mail. I called her back and asked her to fax me the window sticker. "I can't do that until the car is sold," she said. "But I'll tell you what - I'll fax you the invoice." Another big surprise! She was volunteering to send me the invoice. Within minutes, I had a fax of the invoice from which I could verify the options and the color. I also saw that her quoted price was above the invoice, but well below sticker. (The invoice price matched the figures on our site that I had already seen.)

I filled out a simple credit application and faxed it to the dealership. Within a short time, Marj called to say they would extend financing at 5.9 percent. I said we wanted to finance over four years, with zero down. She answered with two words: No problem. A day later, Marj delivered our new Nissan Altima 3.5 SE to us at our offices. Not only that, but she demonstrated every bell, whistle and widget on the car in a clear and professional manner.

It was only two days from the time I began looking for the car to the time we were behind the wheel. We got exactly the car we wanted at a good price. The process was smooth from beginning to end. While the Internet can't take responsibility for the hard work and professionalism of our salesperson, it did help us find Marj and speeded communication greatly.

While buying the Altima, I didn't tell Marj that I worked for Edmunds.com, so we could objectively test the marketplace. However, when the deal was done, and the car was ours, I called her with some follow-up questions to get a better perspective on Internet car buying.

Marj said she has been in Internet car sales for nearly two years, but switched jobs and moved to Irvine Nissan in March. When she arrived, the dealership was getting 200 leads a month. That figure jumped to 300 leads a month by December. About 20 percent of those leads turn into buyers.

"I have noticed a major, major increase in consumers using the net for purchasing," she said. "Whether it is the final purchase or not, consumers use the net for information, pricing or to locate the specific car they want."

I was particularly interested to know why her Internet price for the Altima was so low. "We are aggressive with our pricing up front. We want to the consumer to feel that, right away, this deal is going to be different."

And what if we had just walked onto a Nissan dealership lot? Would we get a good price? "I would never walk onto a lot to buy a car. I don't want to go through all the hassle." Besides that, she said, the sales team will start by trying to sell the car at sticker price. Plus, they will try to make more money on the back end, through financing. "We (in the Internet department) are straightforward and disclose everything. Nothing is pushed onto a client."

Just before I began writing this column, I happened to be reading the financial section of the Los Angeles Times. A story reported that while many retailers reported poor Christmas profits, the online merchants were jumping for joy because their sales had risen by 11 percent over last year.

Could it be that, to bend the words of Mark Twain, the reports of the death of online shopping have been greatly exaggerated?