Pros and cons of buying online

Many consumers are going through car-buying Web sites to make their purchases. While there are some obvious advantages to using these sites, there are also some not-so-obvious disadvantages.

In general, car-buying Web sites allow you to specify the model, trim level, and options you’re interested in and to get price quotes from dealerships in your area. Each site is contracted with a network of dealerships. Typically, when you ask for a price quote online, your information is forwarded to appropriate dealerships close to your ZIP code that will then contact you with what they feel is a competitive price.

The price quotes are free to consumers and there’s no obligation to buy, so whether you buy online or not, it’s an easy way to get a sense of what the price might be for the vehicle configuration you want. Indeed, our own automotive experts often use the Internet along with e-mail and the phone when anonymously buying the more than 80 cars and trucks Consumer Reports tests annually.

On the other hand, the quote you get may not be the lowest price. Even if you get quotes through different Web sites, they may be contracted with the same dealerships in your area, and therefore they may not be very competitive. Of course, you will still need to go to the dealership to wrap up the details face-to-face, so you will still have to confront many of the same negotiating pressures when discussing a trade-in, financing, options, dealer extras, and so on.

Consumer Reports now offers a new service called Build & Buy, which allows subscribers to get competitive guaranteed price quotes from local dealers. Find out more about this service.
Advantages of using the web

Here are ways that shopping for a new car online can work to your advantage:

Save time and energy
Using the computer lets you travel at Internet speed to consult with dealerships about price and vehicle availability. You can identify dealers that have the specific make and model you want in stock and compare prices from many more dealerships than you could easily cover by going from lot to lot.

Preserve your identity
Everyone is equal on the Internet. Studies have found that certain consumers, notably women, minorities, and young adults, are routinely subjected to condescension and discrimination in the auto-buying process, and often end up paying higher prices when they venture onto dealers’ lots.

Communicating with dealerships online allows you to minimize the personal information you have to share. Most of the car-buying sites require only that you provide your name, an e-mail address, and a phone number so dealers in their network can respond to your request. The dealers don’t have to know whether you are young or old, short or tall, male or female, or even an English speaker, nor do they have to know the color of your skin.

Extend your reach
If you live in a rural community or small town where dealerships are few, you can use online shopping sites to test the market in other areas, collecting dealers’ bids and vetting their responses. Do this by entering the ZIP code of another area when requesting price quotes. Armed with names of dealerships selling specific vehicles at prices you know, you can schedule a productive car-buying trip.

Narrow your choices
Dealership price quotes can tell you a lot about which vehicle configurations are readily available and which will be harder to find. If you get a lot of quotes for a different configuration than what you entered, this could be a signal that your configuration will be hard to find, making it difficult to generate competing bids.

Size up the salespeople
The dealership staffer who responds to your online price-quote request will probably be the dealership’s Internet sales manager, and this person will play a big role in your buying experience. By judging the quality of information he or she sends, you can determine whether the dealership is one you’d like to work with. After sending a request for a price quote, it’s reasonable to expect a timely, complete, and courteous response. Ideally, the information provided will describe the vehicle or vehicles that match your specifications, itemizing any options that affect the ultimate cost. It will also include a precise—and competitive—price, indicating any surcharges such as destination or document-processing fees that will affect the bottom-line figure. Vague invitations to stop in to chat or, worse, unsolicited phone calls bugging you to schedule a test drive should warn you of dealerships to avoid.

Compare prices
Getting price quotes from a range of car-buying sites is a good way to see what dealerships are trying to get for a specific vehicle and size up how aggressive they will be. Keep in mind that these quotes may not be the lowest prices you can get. If you aren’t satisfied with the prices you’re offered, don’t hesitate to phone or e-mail the dealers again, asking whether they can beat the best offer you got in the first round.

Close the deal
Once you find an acceptable price, call the dealer to verify the numbers. Emphasize that you don’t want to see extra fees or other surprises when you show up to close the deal. If you’re planning to finance, go in knowing the loan rates available elsewhere and ask the dealership for its best rate.
Online speed bumps

Your new-car shopping trip might begin online, but it cannot end there. There are several basic steps that must be completed at the dealership.

Closing the deal
State franchise laws designed to protect local car dealers bar you from actually completing a vehicle purchase via the Internet. You will still have to complete your vehicle purchase face-to-face with a salesperson in the showroom.

Getting the configuration you want
Online shopping for a vehicle is still a blunt instrument. Despite your best efforts to describe as precisely as possible the model, trim line, and options you want when requesting a dealer’s online bid, you cannot be sure that the quote you get covers everything you want until you visit the showroom and see for yourself.

Paying the lowest price
As we mentioned, shopping online is a good way to size up the asking prices for different vehicles, but you can find out how much you’ll actually pay only by visiting car dealerships and working out the price with a salesperson. Even if a dealership has a car that matches your preferences, the online price quote is valid only for the specific vehicle in stock and remains in effect only as long as it remains unsold, until a purchase agreement is signed, and only when you hand over a deposit.