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Internet fuels car-buying bargains

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In haggling for a car, consumers may finally have the upper hand -thanks to the Internet.

Take Duane Walton of Apopka, Fla. He says he spends all day repairing computers, and heard they were helping people get some great deals on cars.

So he ordered a Toyota Sienna minivan from AutoWeb, an online service that offers discounts from dealers.

"I just put in my name and where to be contacted, and the dealer called me and beat the [lease] payment I wanted by $75," says Mr. Walton.

Walton struck the deal at noon, and by 5 p.m. was driving his new car.

So far only about 2.2 percent of new car buyers actually buy them online. But this number has doubled since last year, "because people are getting extremely good deals without any of the negotiating that proves so frustrating to many people," says Chris Denove, director of consulting at J.D. Power Associates in Agoura Hills, Calif.

More than a third of car buyers tap into the Web for pricing information before they go shopping. Numbers such as dealer invoice, factory incentives, and even holdbacks that once cost money now come free on the Internet.

Online buyers are among the most aggressive car shoppers, says Mr. Denove, who just completed a study of online car buying.

"Relatively inexperienced buyers can get a price they never could have shopping the old way, and experienced buyers can get as good a deal in much less time" than before, he says.

In the end, the Internet will narrow the gap between the highest prices people pay for cars and the lowest, Denove predicts.

Someday, the Net could replace dealers, with consumers buying cars directly from the factory at rock-bottom prices.

Several companies have plans to build on that model, including General Motors, Ford, DaimlerChrysler, computer mogul Michael Dell's Cars Direct service, and the CarMax and AutoRepublic dealer superstore chains.


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