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Click a Button, Buy a Car

How shopping online is changing the way you purchase new wheels

When the time came for George Welch, 71, to replace his 2007 Nissan Murano, he wanted to avoid his ritual hassle of haggling for a new car at a dealership in Ada, Okla. So he decided to give the Internet a try.

He punched in his request for a 2010 Murano, outfitted with satellite radio and the other accessories he likes, and found one at a dealership 70 miles away, listed for $29,000. He printed the quote and called to confirm it. Two days later, he walked in and bought his new vehicle—equipped and priced exactly as he’d specified. The starting-point sticker price for someone walking in off the street, he noticed, was $34,000.

To Welch, the process felt quick, easy and painless. “I’ll never go into a dealership again unless I have a printout,” he says.

The Internet has long been an ideal aggregator of classified ads for used vehicles, allowing buyers to compare options from private sellers and dealers throughout the country. Now its power as a marketplace for new cars is growing. No longer are buyers constrained by the inventory and tactics of their local dealers. In fact, those dealers are rushing to post their vehicles on Internet sites that list autos for sale. Roughly 30 percent of new cars purchased in the United States are selling online, according to Edmunds.com. At eBay Motors, a site that attracts 13.4 million visitors a month, 3.6 million new and used cars have been sold since the site launched in 2000. AutoTrader.com, which has more than 15 million visitors a month, includes listings from 30,000 dealers.

While the Internet is often perceived as a tool of younger, theoretically more tech-savvy buyers, older Americans are flocking to the computer for big ticket items like vehicles. With good reason: Edmunds.com estimates that taking advantage of the Internet can save consumers at least $1,000 per car. And whether or not people actually make the purchase online or at the dealership, they’re clearly using the Internet as a research tool. Among people 55 and older buying used vehicles last year, J.D. Power & Associates found that nearly half used the Internet while shopping, up from 30 percent in 2002. That portion is even higher for new vehicles: In 2008, 63 percent of that segment used the Internet while shopping, according to the company’s most recent Autoshopper.com survey. “That’s a significant number that I expect to grow,” says Arianne Walker, J.D. Power’s director of marketing and media studies.

Knowledge is power

One of the most attractive aspects of online buying is that it removes face-to-face negotiations from the equation. Who hasn’t felt the calculating stare of a showroom sales shark? Dealers have been known to make judgments on any number of personal qualities, age among them, and leverage those perceived vulnerabilities to create a stressful buying experience.

A big way to combat feeling disadvantaged is to be informed, and the Internet offers tons of information that consumers are using. Brad Joseph, a dealer at Oliver C. Joseph in Belleville, Ill., says it’s not uncommon for older shoppers to bring in their laptops and flip them open on his desk: “They’ll say, I have this price right here from your competitors. Can you match it?”

Indeed, as more and more consumers inform themselves online about everything from pricing to inventory to trade-in values from the Internet, dealers are transforming the way they do business. Before people had access to such a wealth of information, “dealers were in a position to take advantage of consumers if they chose to,” admits Les Abrams, management instructor for The Academy, a National Automobile Dealers Association training division for aspiring dealers. But now they’re having to negotiate on more honest terms, and car buyers enjoy a more level playing field. “That’s been a healthy transformation for the auto industry,” he says.

From couch to driver’s seat

There’s a wide range of sites devoted to helping you purchase a vehicle.

Some sites only provide information, while others allow you to actually click a button to purchase the car, and either have it shipped to a nearby dealership or delivered directly to your door (shipping costs are additional). Much of the content and information comes directly from the automakers, providing a transparency that hasn’t been available at dealer showrooms.

“The dealer will give you facts and details on the car, but is unlikely to detail a vehicle’s shortcomings,” points out Jon Linkov, managing editor, autos, at Consumer Reports.

That doesn’t mean information found online is accurate and trustworthy. Linkov advises taking user forums and blogs with a grain of salt, and using multiple sites to compare your findings.

Armchair shopping

Car buying sites can include listings from franchise dealers, independent dealers and private sellers, typically for both new and used vehicles. Some sites allow you to design a vehicle from the chassis up, with only the features you want. Typically, you input the make and model of car you want and then the site offers several options and trim packages, sometimes with different prices at different dealers. Once you make your selection, you can print out the quote and be assured the dealer will honor it. Some sites, like E-carone, offer financing or the ability to trade in your existing vehicle simply by posting photographs of it.

Shopping from your living room means you don’t have to traipse around town, going lot to lot, explaining yourself over and over. That can be physically and mentally exhausting. Online, you can find out who has what you want, and call them all in an hour or so. “It’s a lot easier to get out of their clutches and make the deal remotely,” says Philip Reed of Edmunds.com.

Still, the push-button approach isn’t for everyone, and not all websites are created equal. You need to be comfortable with navigating sites and following through on each step.

Perhaps what gives some people pause more than the technical hurdle, though, is pressing a “pay now” button for such a pricey purchase. That can feel like too big a risk to some when they haven’t seen, felt and driven their future set of wheels. And the older the buyer, the more important it is to have a test drive, according to Scott Painter, CEO of Zag.com, which runs the online buying programs for member organizations like AAA and sells 10,000 cars a month. (Some auto buying sites will allow you to arrange a test drive at a local dealer with no pressure to buy.)

A car is a big commodity to order over the Internet. Some shoppers still have qualms about conducting a transaction this way, preferring to simply buy from a dealer they’ve come to know. The Internet, after all, is only a tool.

“It doesn’t replace the personal relationships involved in buying an automobile,” says Beau Boeckmann, a 39-year-old dealer who followed his father, Bert, into the business.

Their Los Angeles dealership, Galpin Franchises, has sold to several families over multiple generations. One is the family of Ted Fukuda, a 72-year-old resident of Northridge, Calif., whose parents purchased his first car, a used 1954 Ford Crestline, from Galpin. He traded with Bert for a 1950 Ford Coupe, and then again for a 1962 Falcon Station Wagon, before moving to a variety of pickup trucks. Fukuda’s mother, father, children and siblings have all purchased vehicles from Galpin, and his granddaughter, who just got her license, will likely get her first car there too. “I know I’m getting an honest deal and he treats us like family,” says Fukuda.

More and more, that feels like a quaint sentiment. Even among those old enough who remember what a Ford Crestline looks like.

Julie Halpert, who has covered the car indusry for two decades, lives in Michigan.

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