Ten million consumers will initiate either buying or selling an automobile online by 2004, according to Gomez, an Internet quality measurement firm based in Lincoln, Mass.
In 2000 alone, it is estimated that 1.3 million used vehicle sales and 1.8 million new vehicle sales will be initiated online. By 2004, Gomez forecasts that the 10 million consumers who will be initiating an automobile transaction online annually, will translate to nearly $200 billion in sales.
The Gomez study, “The State of Online Auto Buying 2000,” was released at eAutoWorld in San Diego early last month.
“The Internet is becoming more important as a channel to reach prospective auto buyers and increasingly is a critical element in the actual transaction process,” said Dawn McGreevey, an analyst at Gomez.
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The Gomez study surveyed more than 12,000 U.S. Internet users — revealing that the majority of prospective buyers will use online vehicle buying services instead of auto manufacturer sites for their purchase.
“Of those consumers who have already used the Internet to initiate a vehicle purchase, 56 percent used an online buying service, whereas only 44 percent used a manufacturer Web site,” said McGreevey.
Joseph Shaker is counting on the kinds of numbers Gomez is reporting.
Shaker is president and chairman of CarDay, Inc. – an Internet company that has signed up some 45 dealers in the New York/New Jersey and New England area – 35 of them in New England, including the Inskip Group in Rhode Island. Shaker, 32, is also the founder of Hometown Auto Retailers, one of New England’s largest networks of auto dealerships.
Shaker describes CarDay’s relationships with the car dealers as the ultimate win-win. The dealers receive a percentage of every sale and the ability to provide financing. They can also sell warranties and other products, such as security features. Simply put, they also get a place to show off what they have – to thousands of Internet users.
The consumer wins, he said, by cutting out lots of legwork – and lots of unnecessary stops. Plug in what you’re looking for – and the possibilities appear.
There are many other online auto sites, including carclub.com, CarsDirect.com, Autoweb.com, InvoiceDealers.com and Vehix.com. Shaker said carday.com is unique because it provides more than a listing. It provides access to dealers that are part of the program, he said.
Shaker refers to such an arrangement as a “brick and click” approach.
Both components, said Shaker, benefit from the other. So many consumers, he said, now buy and sell used cars. All of them, he said, are looking for some kind of advantage. The vast majority of buyers also need financing – something dealers are more than happy to provide.
“You don’t have financing in your kitchen or warranties in your garage,” said Shaker.
The answer contends, Shaker, is the type of service he offers. Bringing the consumer to the car – and to a dealer with the array of other services.
Visit carday.com and tap in a request for a Toyota Camry with about 50,000 miles on it and you will quickly learn that there are dozens available – all of them deliverable. One dealership has a Camry for sale with 43,000 miles that can be had for $15,995. It’s tan with a tan interior, dual air bags, air conditioning and child safety anchors. A sharp photograph accompanies that information.
Shaker points out that going high tech does not mean the end of a car buying tradition – the haggling. Even this, he said, is new and improved.
“What is neat about our site is that you can make offers and haggle with anonymity,” he said. “It is the beauty of negotiating without pressure.”
That anonymity, he said, is especially popular with women consumers – who now make up 65 percent of CarDay’s client base, he said.
Peter Capodilupo, chief operating officer at Autocenter, which is based in Middletown and includes other dealerships such as Warwick’s Inskip Group, sees CarDay’s operation as yet another way to reach consumers.
Capodilupo does not see the traditional car dealer losing touch with consumers. After all, said Capodilupo, when all is said and done, no one should sign off on a car until he or she has gotten behind the wheel and taken it for a test drive. But that initial contact, he said, is clearly coming via the computer more often than ever.
“What we do know is that 50 to 60 percent of our customers go online to find out information,” he said.
Being a part of that information, is good business for Capodilupo.
“We look at it as another way to meet our customers’ needs,” he said. “It’s an opportunity for them to see our inventory.”
