As a researcher in your state’s consumer protection agency, you’re frequently called on to investigate consumer topics and write reports for the agency’s website. Thousands of consumers have arranged the purchase of cars online, and millions more do at least some of their research online before heading to a dealership. Some want to save time and money, some want to be armed with as much information as possible before talking to a dealer, and others want to completely avoid the often-uncomfortable experience of negotiating prices with car salespeople. In response, a variety of online services have emerged to meet these consumer needs. Some let you compare information on various car models, some connect you to local dealers to complete the transaction, and some complete nearly all the transaction details for you, including negotiating the price. Some search the inventory of thousands of dealers, whereas others search only a single dealership or a network of affiliated dealers. In other words, a slew of new tools are available for car buyers, but it’s not always easy to figure out where to go and what to expect. That’s where your report will help.

By visiting a variety of car-related websites and reading magazine and newspaper articles on the car-buying process, you’ve compiled a variety of notes related to the subject:

■ Process overview. The process is relatively straightforward and fairly similar to other online shopping experiences, with two key differences. In general, a consumer identifies the make and model of car he or she wants, and then the online car-buying service searches the inventories of car dealers nationwide and presents the available choices. The consumer chooses a particular car from that list, and then the service handles the communication and purchase details with the dealer. When the paperwork is finished, the consumer visits the dealership and picks up the car. The two biggest differences with online auto buying are that (1) you can’t actually complete the purchase over the Internet (in most cases, you must visit a local dealer to pick up the car and sign the papers, although in some cities, a dealer or a local car-buying service will deliver it to your home) and (2) in most states, it’s illegal to purchase a new car from anyone other than a franchise dealer (that is, you can’t buy directly from the manufacturer, the way you can buy a Dell computer directly from Dell, for instance).

■ Information you can find online (not all information is available at all sites). You can find information on makes, models, colors, options, option packages (often, specific options are available only as part of a package; you need to know these constraints before you select your options), photos, specifications (everything from engine size to interior space), mileage estimates, performance data, safety information, predicted resale value, reviews, comparable models, insurance costs, consumer ratings, repair and reliability histories, available buyer incentives and rebates, true ownership costs (including costs for fuel, maintenance, repair, and so on), warranty, loan and lease payments, and maintenance requirements.

■ Advantages of shopping online. Advantages of shopping online include shopping from the comfort and convenience of home, none of the dreaded negotiating at the dealership (in many cases), the ability to search far and wide for a specific car (even nationwide, on many sites), rapid access to considerable amounts of data and information, and reviews from both professional automotive journalists and other consumers. In general, online auto shopping reduces a key advantage that auto dealers used to have, which was control of most of the information in the purchase transaction. Now consumers can find out how reliable each model is, how quickly it will depreciate, how often it is likely to need repairs, what other drivers think of it, how much the dealer paid the manufacturer for it, and so on.

■ Changing nature of the business. The relationship between dealers and third-party websites (such as CarsDirect. com and Vehix.com) continues to evolve. At first, the relationship was more antagonistic, as some third-party sites and dealers frequently competed for the same customers, and each side made bold proclamations about driving the other out of business. However, the relationship is more collaborative in many cases now, with dealers realizing that some third-party sites already have wide brand awareness and nationwide audiences. As the percentage of new car sales that originate via the Internet continues to increase, dealers are more receptive to working with third-party sites.

■ Comparing information from multiple sources. Consumers shouldn’t rely solely on information from a single website. Each site has its own way of organizing information, and many sites have their own ways of evaluating car models and connecting buyers with sellers.

■ Understanding what each site is doing. Some sites search thousands of dealers, regardless of ownership connections. Others, such as AutoNation, search only affiliated dealers. A search for a specific model might yield only a half dozen cars on one site but dozens of cars on another site. Find out who owns the site and what their business objectives are, if you can; this will help you assess the information you receive.

■ Leading websites. Consumers can check out a wide variety of websites, some of which are full-service operations, offering everything from research to negotiation; others provide more specific and limited services. For instance, CarsDirect (www.carsdirect.com) provides a full range of services, whereas Carfax (www.carfax.com) specializes in uncovering the repair histories of individual used cars. Case Table 11.8 lists some of the leading car-related websites. 

CASE TABLE 11.8 LEADING AUTOMOTIVE WEBSITES

Site                                           URL

AutoAdvice …………………www.autoadvice.com

Autobytel ……………………www.autobytel.com

Autos.com …………………..www.autos.com

AutoVantage ……………..www.autovantage.com

Autoweb …………………….www.autoweb.com

CarBargains …………………www.carbargains.com

Carfax ……………………….www.carfax.com

CarPrices.com ……………….www.carprices.com

Cars.com …………………….www.cars.com

CarsDirect …………………..www.carsdirect.com

CarSmart ……………………www.carsmart.com

Consumer Reports …………..www.consumerreports.org

eBay Motors ………………..www.motors.ebay.com

Edmunds ……………………www.edmunds.com

iMotors ………………………www.imotors.com

IntelliChoice …………………www.intellichoice.com

InvoiceDealers ……………….www.invoicedealers.com

JDPower …………………….www.jdpower.com

Kelly Blue Book …………….www.kbb.com

MSN Autos ………………….http://autos.msn.com

PickupTrucks.com …………..www.pickuptrucks.com

The Car Connection …………www.thecarconnection.com

Vehix.com …………………..www.vehix.com

Yahoo! Autos ……………….http//autos.yahoo.com

Your task 

With a team assigned by your instructor, write an informational report based on your research notes. The purpose of the report is to introduce consumers to the basic concepts of integrating the Internet into their car-buying activities and to educate them about important issues.