Found, fixed, delivered all online
December 28, 1999
HOLLYWOOD, CALIF. (AP) — Dan Rucks decided he had to have a third-generation Mazda RX-7 before it dawned on him that finding a decent one was going to be a chore.
Mazda began selling the last version of its rotary-engine sport cars in 1993 but quit importing them in 1995. In all, dealers in the United States sold only 13,897 of the sleek two-seaters whose design, penned at Mazda’s North American studio in Irvine, was so advanced it earned a permanent display at the Petersen Automotive Museum in Los Angeles. Not many of them show up in the used-car classifieds.
Rucks, a West Hollywood music video editor, spent almost a month chasing RX-7s on the Internet before stumbling across a new electronic-commerce company, IMotors.com, that promised not only to find him the car of his dreams but also to buy it, refurbish it inside and out and deliver it to him with a 30-day warranty for a price that was about $3,000 below the $25,300 retail value suggested in the oft-cited Kelly Blue Book.
The clincher came when an IMotors sales representative explained that Rucks would have to put down only a $250 deposit, could back out of the deal at any time with a full refund and could even cancel the sale and get his money back up to seven days, or 700 miles, after taking delivery of the car.
”I’m a busy guy, and I don’t have a lot of time to look for cars,” Rucks says. ”It took them 36 days to find one, but the waiting was the only hard part. And now I’m getting exactly the car and the color I wanted.”
San Francisco-based IMotors, went online in Northern California in September and launched in the Los Angeles area in November
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After all, a new car is a commodity: A 2000 Ford Focus is the same whether at a dealership in San Francisco or one in Orange County.
But every used car is unique, its condition dependent on how well its owners have treated it.
”There’s a much greater need for used-car buyers to see, touch and drive the vehicle before committing to buy it,” says Chris Denove, who follows automotive e-commerce trends for J.D. Power & Associates, the Agoura Hills-based marketing consultants.
In an effort to take some of the gamble out of used-car buying, many manufacturers now inspect and ”certify” the quality of used cars that come back to them from lease and rental fleet returns. But those certified used cars are only available through the manufacturers’ franchised dealerships.
IMotors’ claim to a unique position in the independent used-car retailing market is that it certifies and guarantees all the cars it sells no matter the brand.
Still, Denove says he has ”serious concerns whether IMotors can be a long-term moneymaking venture” for its backers because of the potential for losses as the company spends its own money refurbishing cars that customers can easily return.
At the same time, he acknowledges, IMotors and any Internet used-car sellers that decide to copy it could represent a great deal for consumers who know what they want and are willing to forego getting the absolute lowest price in return for guarantees of quality and refundability.
Denove recalls the adage that any deal that seems too good to be true probably is.
”But there is such a fight for market share in Internet commerce that companies now sometimes offer deals that seem too good but really are true.”
Beth VanStorey, IMotors’ president, says the company can make the promises it does because its overhead is so low and because it is selling to a fairly committed buyer. So far, she says, the return rate is below 1 percent.