Internet vs. Traditional Car Buying

There are two doors to today's car dealership.

In the traditional entrance, you walk onto the car lot, meet a salesperson, talk about cars and work out a deal in a sales office.

The other entrance is a virtual one and leads to the dealership's internet department. In this version, you call, email or text the dealership internet sales manager to verify that the car is in stock, schedule a test drive and get a general idea on price. Once you have test-driven and chosen a car, you can do the rest of the deal (including financing and negotiating) online or over the phone, still working with the internet team. In some cases, a dealer will even deliver the car to your home or office. This helps you avoid delays and sales pitches in the dealership finance and insurance office.

Which of these two paths to new-car ownership results in a lower price? And which will be the more pleasant buying experience? More importantly, which one will take the least amount of time? It's the internet path. Hands down. Here's an example to illustrate this point.

When you walk onto any dealership lot, you'll find that the new cars have a window sticker with the manufacturer's suggested retail price (MSRP). If you haven't previously contacted anyone, the negotiation would most likely start from there. But if you went to that same dealership's website and clicked on the "e-price" link (and then entered your contact information) or called the internet manager, you'd get a discounted price with little effort.

Who Is the Internet Salesperson?

Salespeople in internet departments typically have different sales incentives and so behave differently from traditional car salespeople. Car dealership internet departments focus on selling a higher volume of cars rather than zeroing in on getting on maximum profit on each individual deal. Therefore, the initial price quote from an internet sales manager is often very close to the absolute lowest selling price for a given vehicle.

Internet department salespeople also assume car buyers are informed, have shopped around and won't necessarily "buy today." More importantly, the internet team is willing to give specific prices on actual cars in an email or over the telephone. Edmunds has also taken this approach with its Special Offers, which present guaranteed, up-front prices for specific cars online.

Time Is Money

On a number of occasions we have tested the internet versus traditional method of getting a price on a car. The results were always the same. The "on the ground" method takes at least an hour of your day (more if you factor in travel to and from the dealership), involves speaking to salespeople who try to "see what they can do," and ends up with something that is not the best price.

Compare that to these methods, which can be done from home or wherever else you need to be:

1. Call, email or text the dealership of your choice, ask for the internet sales manager and describe what you're looking for. If the car is in stock, you'll have a quote within a few minutes at a price that is more competitive than you'd get by walking into the dealership. At worst, you'll have a reply email in an hour, but at least you can go about your business.
2. Find the car you want on Edmunds and enter in your contact information where it's indicated. You'll receive discounted prices upfront, followed by a call from a salesperson.
3. Find the car you want on a dealership website and enter your contact information. An internet salesperson will be in touch shortly after to send you the price quote.

A side note about the frequency of salesperson calls and emails you may receive if you shop via the internet: We know the calls and emails can get excessive at times. The salespeople are eager to make a sale and they want to follow up to gauge your interest. We don't recommend giving them fake contact information, however. They may need to get a hold of you for valid reasons. Instead, consider creating a dedicated email address and a temporary phone number (something like Google Voice) for the duration of your car shopping. A temporary number can be easier to monitor and turn off once you're done with the sale. Once you've bought the car and decide to get rid of the temporary number, make sure you give the dealer your actual contact information, in case it needs to reach you for things such as recall information or if there's a problem with the paperwork.

How Much Can the Internet Save?

A few years ago, we were shopping for a subcompact car with an MSRP of $20,809. Here's how our experiences differed when we tried both the traditional and internet sales processes to buy it:

After walking onto a car lot and test-driving a new car, we requested a written price quote. The salesman escorted us into a sales office, where he wrote our name, phone number and address on a "four-square" worksheet, which dealerships sometimes use to negotiate a car deal.

There's no question that using the internet department to buy a car saves time and stress.

We repeated our request for a written price quote but didn't get one. Soon the assistant sales manager appeared. After an opening sales pitch that extolled the virtues of the car, he said, "What if we could discount it by $500?"

After more discussion and a trip to see his manager, the assistant sales manager said he might be able to get a $999 discount if we bought the car that day. We decided to leave, even though he was increasingly insistent that we stay and work out a deal. Had we hung around to complete the purchase, it appeared that we might have been able to buy the car for $19,810.

The next morning, we phoned the internet manager at the same dealership and asked for a price on the car that we had test-driven the day before. "Let me look that up for you," he said. A minute later, he was back. "Our price is $19,310."

When we asked if there were additional fees, he said, "I can email you all the fees and your out-the-door cost if you like." This pleasant three-minute phone call yielded a price that was $500 below the vague price quoted by the traditional sales department. In short, we saved about $1,500 off the original price with much less effort than our walk-in experience.

Traditional Shopping Advantages

While the internet approach clearly offers advantages to many consumers, some buyers are still more comfortable buying the traditional way: physically going to the car lot. Maybe you want the salesperson's recommendations on selection of the right model and features, a face-to-face sales pitch and some hand-holding during the buying process. If the salesperson truly is an expert in the car's features, this approach can be helpful. You just need to have done your homework to ensure the deal is a fair one. Just know that the route to a fair price might be a longer one.

One alternative to try is to ask for the internet sales manager when you arrive at the dealership.

The Bottom Line

It's difficult to accurately quantify the savings you can get by using a car dealership's internet department. But it's safe to say the price will nearly always be lower than the price you'll be quoted if you walk onto the car lot — assuming you can even get a definite price.

There's no question that using the internet department saves time and stress. When you shop in person at a dealership, you run the risk of making costly, spur-of-the-moment decisions on financing or additional products. Working via the internet department minimizes that. It also is good if you don't have an appetite for negotiating.

By using the internet as the front door to a car purchase, you make more informed decisions. There is time to consider all the possibilities in a relaxed atmosphere, away from the distracting lure of new-car smell.