Car Dealers Feel Net Effect

[Akasha]

I really liked reading this story as I personally don't think much of car dealers... ironic since my mother's brother, my step-grandfather and a man my mum dated for like 4 years all sold cars.... ;)

When I was buying my car I was working in the city, office full of males so thought I would be fairly safe. Asked my boss to help me find a good deal and there was a not so bad sports edition EA Ford Falcon, price... $8,999.

Guy brings the car to the office, me and the boss take a look at it, thank him for showing and let him know we'll be in contact. I ring him later the afternoon to talk about final price and his words were, "Sure, $9,999" I kindly inform him the price quoted in the paper was $8,999 and he tries to tell me I read wrong... 18 year old pretty female - he thinks he has me.

By the time I hang up the phone the three males in the office I work on were back's against the wall looking rather surprised... turned a few heads outside as well... including the general manager :D

Didn't the car dealer get a shock when I told him that if he thought he could rip me off because I was female he had another thing coming blah blah blah... then SLAM with the phone... 3 months later the car was still for sale.... ;)

Now.. the article...

[size=18px]Car Dealers Feel Net Effect[/size]

Savvy online shoppers are schooling car salespeople in the art of the deal. Car buyers who mine the Web for detailed vehicle information are saving hundreds while depriving hucksters of their greatest weapon -- consumer ignorance.

Consumers armed with comparative pricing information from the Web have replaced the doe-eyed innocents who used to wander onto car lots and fall prey to high prices of the sales vultures. According to analyst firm JD Power and Associates, 64 percent of all car buyers are going online to sites such as Autobytel.com, Kelley Blue Book and Edmunds.com to get the manufacturer's invoice price and neighborhood-specific real-world pricing.

Because of the Internet, car salespeople must be more knowledgeable about their products and have adapted their strategies for increasing their commissions, according to Phil Reed, consumer advice editor for Edmunds.com.

Reed said that salespeople who traditionally start the negotiations at close to the manufacturer's suggested retail price will substantially lower their initial price for consumers who have done their homework. Reed said salespeople would be less likely to tack on hidden fees and finance costs with smart shoppers. "If you appear informed, all of the tricks that they use on someone who isn't prepared are put aside," said Reed, who worked "undercover" as a car salesman for three months.

Reed said consumers who shop online can be more discriminating since it's easier to end an e-mail conversation than it is to evade the grip of the salesperson, especially in the dreaded "finance and insurance" section of the showroom where the warranties and options are negotiated.

Nearly all car dealerships have now set up websites to funnel online shoppers, and to allow customers to skip the high-pressure haggling of the showroom. Lori Hammond, the Internet sales manager for Conicelli Toyota in Conshohocken, Pennsylvania, manages a team of 20 people schooled in the art of negotiating with the well-clicked car buyer.

Hammond said Conicelli established preset pricing that all but eliminates back-and-forth negotiations. Hammond's Internet sellers -- most of whom did not sell cars previously -- are paid commissions based on the volume of cars they move, and not the profits on the individual vehicles, which creates a different dynamic for selling.

"Our pricing provides fair deals, so we're looking to sell them by being attentive and offering good customer service," Hammond said. She said Conicelli's floor salespeople aren't limited to the same preset pricing, and most aren't interested in online selling. "I don't understand the thinking when you could be handed all of these leads, but they are happy with how they operate." Hammond said that online shoppers who come into the showroom for a test drive make a purchase about 60 percent of the time.

Mark Garms, director of consumer and dealer services for Autobytel.com said that dealers are much more likely to quote a price over the phone now than five years ago because of the information available online. "It has dramatically changed the dynamic in dealers' willingness to provide up-front information." Garms said Autobytel has a five-day coaching program to instruct dealers on how to interact with consumers who have researched pricing online. "The expectation of knowledge is different, and the process has to be greatly accelerated," said Garms.

According to Paul Taylor, chief economist for the National Automobile Dealers Association, 64 percent of all dealerships are selling cars online. He said shopping online greatly increases the efficiencies of purchasing, which should reduce the dealers' costs and eventually lower prices for consumers. Taylor said many dealers are training the entire staff on how to effectively use the Internet so that they can speed up the process. "That's the model of the future."

Taylor said that before the Internet, consumers would drive to three or four dealers to get comparative pricing, "but now they can get five to 10 quotes all from their living room." Virtually every online sale still concludes with a test drive and signing the final paperwork at a showroom, Taylor said. "All roads lead to the dealers."

Edmund's Reed said consumers should avoid car dealers without an extensive website. "If they don't understand the Web, then you don't want to deal with them," Reed said. He warned that although it may be cheaper for companies to sell online, the number of salespeople isn't likely to diminish. "Since they all are paid by commission, it doesn't cost the dealers to have a bunch of guys standing around smoking cigarettes."

Information Source : Wired News!