CAR SHOPPING ON LINE CUTS DOWN LEG WORK FOR THE SAVVY BUYER : WATCH THE WEB.
Joe Pierret, a design engineer for a semiconductor company, is a thorough guy.
He wanted a new car, so he started doing his homework. He relied on the Internet for specifications and pricing information. He called and visited new-car dealers. He even talked to some auto brokers.
He ended up using Auto-By-Tel to purchase the vehicle he wanted, a GMC Yukon sport-utility. This Web service puts buyers in touch with dealers who, in turn, give buyers price quotes for the specific car or truck they're looking to buy.
Only in existence since 1995, Auto-By-Tel has emerged as the leading player in the booming car-buying-on-the-Web industry. In less than two years, Auto-By-Tel has turned 450,000 purchase requests over to dealers nationally. The company estimates that about half of them ended up as actual sales.
Auto-By-Tel competitors include DealerNet (700 dealers) as well as Silicon Valley firms such as AutoWeb Interactive (500 dealers) and AutoTown (200 dealers). In addition, many dealers now have their own Web pages to attract customers, while some dealership groups, such as the Fremont, Calif.-based Tasha Automotive Group, combine all their dealers on one Web address.
The services are free to the Web-surfing consumer. Dealers pay Auto-By-Tel and the others to be part of their package.
Pierret was not only happy with his deal - about $1,900 under manufacturer's suggested retail price - but with the process, too.
``It's very painless,'' he said. ``I had a good feeling about buying a vehicle. I got the best price and the least amount of hassle. Usually those don't go together.''
The bottom line, said Don Keithley, a partner with the J.D. Power and Associates consultant firm, is that Internet car shopping is one of several recent developments that will benefit car buyers today and tomorrow. It - coupled with used-car superstores and buying services run by organizations like the American Automobile Association and companies like Price/Costco - ``provides more choices to the consumer,'' he said.
``We're getting rid of that anxiety and that time wasted involved in looking for a car,'' said Payam Zamani, vice president of marketing and sales for the Cupertino, Calif.-based AutoWeb Interactive.
On line since April 1995, AutoWeb now represents more than 500 dealerships. Its site generates 6 million visits a month, which led to about 40,000 purchase requests in January. That's up from 80,000 in all of 1996. Zamani said 20 percent to 30 percent of AutoWeb purchase requests lead to completed sales.
AutoWeb sees its purpose as twofold: advertising its subscribing dealers, and generating some leads and sales for them. The company will also create a dealer's Web site.
``We're just paid by dealers to promote the presence of the dealership,'' said Frank Zamani, Payam's brother, and company chief executive officer and president.
AutoWeb users can chose dealers by state or region, or search for specific models based on price and equipment. Both new and used cars are listed on AutoWeb. Any individual selling a used car can get it listed on AutoWeb at no charge.
Auto-By-Tel started as an idea to sell cars through a home-shopping TV network, evolved into a service on the Prodigy computer network and then quickly settled into a Web site operation. It now works with 1,600 dealers, said Tom Ciresa, Auto-By-Tel's director of used cars and Canadian sales. The goal by the end of 1998 is to sign up 3,000 U.S. dealers - close to 20 percent of all the franchised dealers expected to be in existence by 2000.
``And the Internet isn't mainstream yet,'' Ciresa said. ``When the Internet goes to the masses, retailing gets changed forever.''
Auto-By-Tel users fill out a form that lets them identify the specific vehicle they want by year, make, model, color, type of engine and transmission, and various options. The form is then sent from Auto-By-Tel's Corona del Mar, Calif., offices to the nearest dealer by ZIP code who sells that make of car.
The customers gets a confirmation that the purchase request has been forwarded and he or she is given the name of the dealer. That dealer, within 48 hours, contacts the customer via phone, fax or e-mail with a confirmation that they have the specific vehicle in stock and a price quote.
The Auto-By-Tel user can then go buy that vehicle or use the price quote to shop around at other dealerships.
Sellers also say Internet car buyers tend to be younger, smarter and have higher incomes.
Gathering new car information on the Web and then using the Internet to begin a purchase are just the first steps, according to J.D. Power's Keithley. Used cars, which account for many more sales and greater profit than new-car dealers, are logical candidates for Web merchandising. Auto financing and insuring are the next steps.
Both Auto-By-Tel and AutoWeb said a small number of their dealers have begun delivering cars to customers' homes, which means a buyer can select a car, buy it on the Web and then sign the paperwork and accept the keys, all without leaving the house.
Some places to start car shopping:
Tasha Automotive Group
Box: WATCH THE WEB (See text)
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Mar 24, 1997|
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