Buying a GM Car on eBay Motors


GM has extended its experimental program to sell cars through eBay Motors in California. Some early figures are in and the results are encouraging.

Since the program began August 11, some 1.4 million shoppers interested in buying a new Buick, Chevrolet, GMC or Pontiac, visited GM's virtual showroom on eBay. Of those, some 4,000 people entered into negotiations with dealers. GM did not say how many sales were concluded because of this program but early reports were that sales were slow.

Obviously, there are a lot of Internet tire kickers.

Clearly, consumers have a high degree of dissatisfaction with the current car-buying process. It is slow, stressful and filled with the danger of overpayment. So when a new car-buying route is offered, consumers are quick to investigate it.

So, why aren't more people actually buying through GM's eBay program? Well, Edmunds.com analysts looked at the "Buy It Now" price and found GM's prices to be 2 percent higher than our True Market Value pricing. On a $25,000 car that is about $500.

Clearly, shoppers need to click on the "Make an Offer" button rather than "Buy It Now." Use our list of starting offer prices as a guide. You can easily negotiate through the fleet or Internet department apart from the GM eBay program. But this new GM eBay process takes online car buying to the masses. If successful — and we believe they will modify it until it works — other manufacturers will follow suit. In the near term, GM says the California-based program would likely be expanded to buyers in many other states.

GM said California was selected for this test program because of its tech-savvy consumers and to help strengthen sales which have typically been weak in the state. Consumers can visit the GM and eBay page at gm.ebay.com and will be allowed the opportunity to ask questions to dealers.

However, shoppers using the GM eBay site should understand that their offer will only be treated as a "qualified lead." In other words, even if the offer is accepted, it isn't a done deal. You still need to physically go to the dealership, confirm the price and sign the contract. Typically, car contracts are drawn up in the dealership's Finance and Insurance office where an expert salesman (the "F&I Manager") will try to sell you an extended warranty and other products and services. To get a good deal, consumers must make sure that they finance the vehicle properly and they don't overpay for added products.

Furthermore, consumers should understand that between when your online offer is accepted and when you arrive at the car lot, the car could be sold to anyone who makes a better offer.

While the GM eBay program is far from perfect, it is a valuable first step in online car sales from a manufacturer. If GM makes the pricing more attractive and expedites the delivery process, this would be a major step forward for car buyers.

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