Originally created 05/17/99

There's a lot to learn about car shopping online



For almost 20 years, I drove the family bus. Actually, I drove three family buses -- two lumbering GM wagons and a Dodge minivan, cars with all the excitement of a lawn chess tournament, cars that required two or three passes to wrestle into the average parking lot space.

What those vehicles were good for was hauling large quantities of kids, groceries, lumber and mulch -- sometimes all at once. For that, I'm thankful. But this is the spring of my liberation. With my older son in college and his brother driving himself, it was time to retire the van and buy a Real Car. So, naturally, I turned to the World Wide Web.

I discovered an incredible variety of Web sites devoted to what must be America's favorite -- and most hated -- pastime. Some are independent operations, such as Autobytel, Microsoft's CarPoint and AutoWeb, which provide information and match buyers and sellers. Automobile manufacturers and dealers have their own sites, while Web-based buying services offer to find the "best price" deal on the car you want for a fee ranging from $75 to $200.

There's a healthy demand for these services. According to J.D. Power & Associates -- a market research company that surveys automobile owners -- 25 percent of the people who bought cars for personal use in 1998 did at least some of their shopping on the Web.

Most of them were using the Web to arm themselves with pricing information, and J.D. Power claims that on average, they saved almost $1,000 by doing their homework. That's a hard figure to prove, but I do know that after some serious shopping -- online and in person -- I came up with a good deal on a car that I really like. Here's what I learned:

First, even if you think you know what car you want, use the Web to research the market. There are sites that ask you what you're looking for in terms of size, specific features and price, and show you a list of cars that meet your requirements. Drill deeper and you'll find detailed specs, side-by-side comparisons, reliability ratings, federal crash test results, reviews from magazines and even comments from owners themselves.

If you forget your preconceptions, you may find a pleasant surprise. For example, it probably wouldn't have occurred to me to look for a Buick -- too much my parents' kind of car. But the Buick Regal I wound up buying popped up on the radar screen when I asked for a list of cars that were similar to a sporty Olds Intrigue. I might have overlooked the Buick otherwise.

Once you've narrowed your search, abandon your computer and test-drive the cars that interest you. When you find a couple you like, ask the dealers for price quotes -- and be very specific about recording which options each car has, you'll need the information later.

That done, turn on your computer and research prices for the cars you're serious about. Find a site that will let you "build" your car, option by option. By the time you're through, you should be familiar with the car's list price, its invoice price, the factory "holdback," and whatever incentives are available. You may have to visit a couple of Web sites to get all this information, but it's important.

Many sites limit their price guides to the car's sticker and the so-called invoice price -- what the dealer allegedly pays for the car. But the key is the holdback -- an additional 2 percent to 4 percent that the factory refunds to the dealer for each car he sells. Even if a dealer offers you a price that's only a few hundred dollars above "invoice," he still has plenty of wiggle room.

Also check for factory rebates and other incentives on the cars you're considering, such as low-interest financing. These can make a substantial difference. One of the clinchers on my Regal was a $500, Internet-only coupon that I stumbled on when I visited General Motors' Web site.

Look harder and you may find factory "incentives." These are discounts that dealers get for moving specific models. They aren't widely advertised, and the dealer has the right to keep the money or pass the savings on to you. Knowing that an incentive is available on you car can give you more bargaining power.

Once you know the true cost of the car, you're ready for the final battle. You have a couple of choices here. You can go back in person and negotiate with the dealer from scratch, or you can take advantage of a site that will put you in touch with a dealer via e-mail. Some of these are nothing but come-ons to get you in the door, but the best sites have arrangements with dealers who promise to get back to you with a no-haggle, "best price" offer on the car you want.

I don't think it matters which approach you use. The important thing is that you know what cards the dealer is holding and whether he's making a decent offer.

I used GM's BuyPower Web site (the best site among the big manufacturers) to browse a local dealer's inventory and ask for a quote on a car that had exactly the equipment I wanted, although I wasn't crazy about the color. That car had been sold, but the salesman offered to check other dealers' inventories to find one like it -- in the color I wanted. Another, non-Webbed Buick dealer I visited in person just showed me what was in stock and didn't offer to look around for the car I preferred. So it pays to shop.

My dealer found the right car a day later, and I accepted the salesman's offer -- $100 over "invoice." That left the dealer a $700 to $800 profit, which I thought was reasonable. On top of that, I used the $500 discount coupon and took advantage of GM's zero percent financing for three years.

Did I get the best possible deal? You never know -- that's the awful thing about buying a car. You always figure you could have done better. But all things considered, it was a relatively painless process and I was satisfied.

Car shopping online

There are scores of car shopping sites on the Web, but I liked these best:

-- Carprices.com (www.carprices.com): The best site for building your car from scratch. Choose your make and model, then pick exactly the options you want from the manufacturer's list. You'll get a nicely formatted report showing sticker and invoice prices for the whole shebang. You can use the report as a guide when you visit a dealer or get a quote on your car through AutoVantage.

-- Edmund's (www.edumnds.com): This longtime publisher of automotive consumer guides has produced a well-organized source of online information. You'll find capsule reviews and excellent pricing information, including dealer holdbacks, consumer rebates and unpublished dealer incentives.

-- General Motors BuyPower (www.gmbuypower.com): The stodgiest of the Big Three automakers threw a curveball at the rest of the industry when it opened this radical site in March. BuyPower will not only stack GM's cars up against the competition with comparative, third-party reports, but also will let you browse its dealers' inventories to find exactly the car you want and get an aggressive price quote. Its reports include sticker and invoice prices, but not holdback information. About 75 percent of GM dealers participate. Inventories aren't always up to date, but you'll get a good idea of what's available in your area. A must-see if you're interested in a GM car.

-- CarPoint (www.carpoint.com): Microsoft's excellent site will let you spec out a car from a general list of options and then refer your request to a specific dealer in your area (you get to choose). Excellent research materials, including a link to the Edmund's price guide for used car trade-ins. Downside -- too many JavaScript errors. You'd think these guys would get it right.

-- Autobytel (www.autobytel.com): This site offers good interview process for finding a car that matches your needs, but you can't build a car from scratch and get a quote on that specific automobile from Autobytel's dealers. You can't specify the dealer, either. All you know is that a salesman will call. Quite frankly, it's hard to see what made this site's initial public offering a hit, given the competition.

-- Negotiation Dynamics (www.negotiationdynamics.com): Good advice for negotiating the purchase of a car -- including an excellent summary of holdback percentages by manufacturer.

-- AutoSite: (www.autosite.com/new/grabbag/rebatet.asp): A decent all-around site for car shopping, but this link will take you to one of its best features -- a table of rebates and financing incentives on virtually all cars.