Online Car Buying Revisited
Wouldn't it be great if buying a car online was as easy as ordering a book or downloading a movie? Though we're still a number of years away from that, online car shopping has become more streamlined, practical and user-friendly than most people realize. If you try it, it will save you time, money and frustration.
We're not saying this based on some lofty user survey or the windy opinions of tech experts. We say this based on our own experiences buying cars for the Edmunds.com long-term testing fleet. We've been using the Internet to buy cars for the past eight years, and we're surprised that it hasn't caught on with more shoppers. People are either used to going to the dealership or figure that the buying process will be just as complicated online. Well, it isn't.
The Preferred Method of Car Shopping
High technology has minimized the time you need to spend at the dealership, and in some cases, eliminated a dealership visit altogether. Even more importantly, the Internet has made it easier for car buyers to get the car they want at a great price, without the salesman's pressure or the hassle of negotiating.
Our most recent Internet car-buying experience reminded us why this has become the best way to purchase a vehicle. We tested the waters both in person and online. Our trip to the dealership ended with a negotiation that kept going in circles. But when we took our car shopping online, we saved time, money and aggravation.
When the scribes here at Edmunds choose a vehicle for our long-term test fleet, they sometimes create a wish list of options and features that are 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 that one. And they want all this in a specific color matched to a specific interior.
What starts out as an easy-to-find car often turns into a border-to-border search mission. In this case, we would be looking for a Light Ice Blue Metallic Ford Fusion Hybrid, with the Rapid Spec 502A package. This package features Sync with navigation, moonroof, leather seats and a blind spot information system.
Where To Start
We began our search by obtaining the Fusion's TMV® price. Then we followed the prompts on the vehicle page for the 2010 Ford Fusion Hybrid and clicked on the red bar labeled "Price with Options." We entered all the goodies we wanted and were able to see what our TMV price was.
Since we wanted a certain color with specific options, we used the Edmunds New Car Inventory tool. When we selected the car we wanted, we clicked on the "View Inventory" tab and found that there were a number of Fusion Hybrids in our area. Many of them had the options we wanted. Within minutes, we found almost exactly the car we had configured. We clicked the button marked "Request Price Quote" and waited.
Fast Results, Upfront Pricing
Within an hour, we received replies from several dealerships. The e-mail from South Bay Ford really caught our attention based on its fast response and price. The Internet sales manager included a copy of the window sticker within the e-mail. Then came this pithy phrase: "Your total e-Price today is $29,671 plus tax and license."
This was $200 below invoice. Our Edmunds invoice price differed slightly (probably because of additional regional dealer costs), but it was still within a reasonable range. We knew this was a great price because we had checked our site to find out what the TMV and invoice were for this car. It was also nice to have the price clearly stated, up front, with the courteous reminder that tax and license fees would be extra. We didn't buy the vehicle from South Bay Ford because they didn't have the color we wanted, but we were able to use their price quote in other negotiations.
Maybe this prompt response doesn't seem that unusual. 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:
- "When can you come on down and test-drive it? You're going to love it!"
- "No one can beat our prices. Come on in and we'll work something out."
- "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 we checked our cell phone, we found that a few Internet managers had also left messages for us. This gave us the option to respond via e-mail or by phone. We recommend doing what feels most comfortable for you.
Completing the Purchase
While buying the Fusion, we didn't tell the salespeople that we worked for Edmunds.com, so we could test the marketplace in an unbiased way. We called them back and asked them to e-mail us the window sticker. When you make this request, they usually oblige, and in other cases they actually volunteer to send you the invoice. The invoice is the key to getting a good deal because it shows what the dealer paid for the vehicle and gives a better reference point than the MSRP. Within minutes, we received an e-mail with the invoice, from which we verified the options and the color.
We obtained our financing ahead of time so we could negotiate as a cash customer. Buyers are sometimes asked to fill out a credit application as a screening process, to see if they can afford the car. If you plan on financing, don't fill out the credit application until you've agreed on a price and are ready to purchase the vehicle.
A day later, the Internet manager delivered our new Ford Fusion Hybrid to us at our office. Since he brought the contracts with him we avoided the ordeal of going through the F&I room. Not only that, but he demonstrated every bell, whistle and widget on the car in a clear and professional manner.
From the time we began looking for the car to the time we were behind the wheel was only about three days. 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 credit for the hard work and professionalism of our salesperson, it did help us find the dealership and sped up communication greatly.
Tips From a Straight Shooter
In one of our earlier shopping experiences, we interviewed Marj Aldoph, Internet sales manager for Lew Webb's Irvine Nissan, and asked her some follow-up questions to get a better perspective on Internet car buying.
Aldoph said she has been in Internet car sales for over two years. When she arrived, the dealership was getting 200 leads a month. Nine months later, that figure jumped to 300 leads a month. 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."
We were particularly interested to know why her Internet price for the vehicle we purchased from her was so low. "We are aggressive with our pricing up front. We want 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," she responded. "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."
Your Experience May Be Different
Though full disclosure may be the policy at Aldoph's dealership, your situation may vary from this. A 2008 study by R.L Polk revealed that despite the importance of price information, only one out of four dealers answered questions about vehicle availability and price.
During our Fusion shopping, we came across a dealer who didn't want to give a price quote over the phone. They wanted us to see the car first and discuss the price in person. Avoid falling into this trap. We explained to them that going to the dealership defeats the purpose of shopping online, and that other Internet departments we had dealt with had been more forthcoming with the price. Eventually they gave us the price via e-mail, and we were able to compare prices from the comfort of our home.