Getting An Edge In Car-Shopping

In this column

Using the Internet to window-shop at dealer sites
• Find objective reviews and price info
• Gain the upper hand during haggling and
• Coming soon: Buying direct from the auto maker.

I've used the Internet to help me purchase my last two vehicles, but that's not what I want to do with my next purchase. I want to buy my next vehicle over the Internet.

There's news from General Motors that leads me to believe this will happen -- sooner, rather than later. But first, let's look at how the process works now.

I'll start with the basics. Why use the Internet for a car purchase?

Does the name Jerry Lundegaard ring a bell? If you've seen William H. Macy as a car dealer in "Fargo" -- or you've sat in a car salesman's office while he "consults" with the sales manager on whether to cut you a discount, or if you've ever been told that the optional undercoating is obligatory, you're definitely ready for an Internet-assisted purchase. There are two rules I live by: I don't need fries with my hamburger and I don't need undercoating on my automobile.

You'll need to narrow your search. Use Yahoo, or a similar directory service, to find the Web sites of the major auto manufacturers.

Those sites can help with basic info, but some manufacturers don't quite "get" the Internet. Last spring, when I researched my current car, I tried to access the Jeep site (actual name, Jeepunpaved.com), but because it was designed with Java programming, it repeatedly failed with my browser (Opera). That's like someone standing outside a dealership telling me to go home. (No loss: I really like my new Ford Explorer.) I've never understood why a Web site should require me to download the latest security risk from Microsoft or Netscape.

The Objective Opinions

Next, you'll want to research your choices. Use a search engine like Google to find reviews of your favorite models. I happen to like Google because it provides more relevant sites at the top of its list of "hits." (Also, It's almost as much fun to say Google as it is to say Oingo, another fine Internet search engine, but I digress.)

Now, the good part. When you've picked out a make and model, go to either Edmunds or Kelley Blue Book sites for complete pricing, both dealer list and cost. Options are listed exactly as they appear on an invoice. It's a simple matter to determine not only the sticker price of the car, but also what the dealer pays the manufacturer. Both sites also list used car prices, so you'll be able to determine the retail and wholesale cost of your car -- in other words, how much money you'll get if you sell it direct (retail) or to the dealer as a trade-in (wholesale).

No, You Make Me An Offer

With your info in hand, it's time to kick tires and take a test drive. In the days before dealerships were surrounded by barbed wire fences, you could actually wander through a dealer's lot on a Sunday, take a leisurely look at some beautiful cars and not be hounded by salesmen. Those days are gone. You'll actually need to face a salesman. Tell him you're "just looking" and arrange for a test drive. If you're lucky, he won't even mention undercoating.

At this point you'd have three options:

• You can use an Internet service like Autobytel or Carpoint to have dealers submit bids to you.
• You can print out your pricing info, sit down with a salesman at a dealership, or even better, three salesmen at three dealerships, and haggle the old fashioned way.
• Or you can do what I did -- use a fleet sales broker, basically someone who acts as your agent, to get the best deal. You'll find one in the Yellow Pages. (You know, that funny-looking paper thing with phone numbers. It's archaic, but it's still useful)

Why use a broker? They use flat rate pricing, meaning they'll quote something like $150 over dealer cost depending on make and model, so there's no haggling. Personally, I don't like to sell my used car myself. I know you can get more money, but I don't like the hassle. The broker I use "shops" my used car to several dealers and gets the best wholesale price he can. Three years ago I purchased a Toyota RAV 4 and traded a Ford Taurus. The broker got me a lower price on the RAV 4 and more money for my old Taurus than the dealer I originally dealt with.

That's how the process works now. It's still flawed, but it will improve.

Cutting Out The Middleman

Today, you can go to one of the major computer manufacturers -- say, Micron -- select the model you want, add the options you want, arrange for financing or leasing, and within a week a computer arrives at your door.

Why shouldn't purchasing a car be that simple?

Most car manufacturer's sites already include an interactive pricing section where you can select options, engine sizes, color, just about anything you'd want. Unfortunately, the last option is always "print," not "purchase."

Well, GM just might be changing that. A few weeks ago, GM announced it wanted to buy into about 10 percent of its dealers across the U.S., giving it a corporate presence in most markets. Dealers, of course, reacted negatively. Why?

Currently, If you want to buy a GM car over the Internet, you've got a couple of options. The first, gmbuypower.com, sends you through most of the motions of a purchase, and then suggests a dealer or dealers for you to contact. (Warning, I had to boot up Internet Explorer to view it.) There's another new option, gmdriversite.com, a test market site in Houston that features photos and no-haggle prices of used cars. With a $100 deposit, you can reserve a car for a test drive and sale.

Could dealers fear competition from a corporate giant selling cars directly to the consumer through the Internet?

It happens they might be right, because on Nov. 1 you'll be able to order a GM car over the Internet and have it delivered to your home within a week. But there is one catch -- your home must be in Great Britain.

According to Reuters, GM's British affiliate, Vauxhall will sell cars directly over the Internet. People there will be able to arrange a test drive, financing, and even determine a price for their trade-in via the Internet. But here's the important part of the story. Quoting from Reuters: "'Customers will further benefit from savings in normal marketing and distribution costs, which will be reflected in lower list prices,' said Vauxhall Chairman and Managing Director Nick Reilly."

Said another way, if GM cuts out the middleman -- the dealer -- it can offer lower prices via Internet sales, just like Micron, Dell and Gateway do in the computer market.

Now that would really send Jerry Lundegaard to the old wood chipper.

--Tom Egan has worked the information business from photography and journalism to video production and online editing. He writes about technology from his home in Saint Paul, Minn., within three blocks of four bars that serve Guinness on tap.