Point, click, drive latest option for Internet car buyers
September 29, 1999
DenverDenver — Point, click, drive. — Point, click, drive.
Denver — Point, click, drive.
That’s the latest option for Internet car-buyers, after driveoff.com started taking orders this week.
The buyer orders the car online, agrees to a price, pays a deposit and gets the closing documents the next day by courier service. The deal is done before the buyer ever walks in the door. More than 400 dealers in Colorado have signed up, and hundreds more are waiting to join.
Dealers are happy, and so are the customers.
”We’ve been overloaded with leads from the Internet. We were getting 200 a month,” said Jesse Boden, a Phil Long Ford Internet specialist. He said the company has sold hundreds of cars online the past few months, and expects the new service to add even more customers.
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Several Internet services already offer vehicles online, but the services offered differs greatly.
Andy Mountain, spokesman for driveoff.com, said a number of Web sites offer cars, but most of them turn around and sell the leads to dealers, or act as brokers. His Web site offers to close the deal immediately.
Nicholas Lobaccaro, an analyst for Lehman Brothers, said the Internet is rapidly changing the way people buy cars.
”Up until now, a lot of people have used it to gather information, but rarely do they follow through the whole transaction. We’re now moving in that direction,” he said.
Lobaccaro said Internet sales could make up 4 percent to 5 percent of auto sales in the next four years.
He said buyers turn to the Internet for cars because they are cheaper.
”If you reduce the cost of sales, you can pass some of that on to the customer,” he said. ”People will use the Internet for convenience.”
The company plans to expand the Internet site nationwide within six months.
”Anyone can launch a lead-generating or brokering Web site and claim that visitors can buy a car online,” said Michael Kranitz, president of the company. ”Other sites have gone to great lengths to convince consumers that they can buy a car online, when in reality they can’t.”
Forrester Research has predicted that more than 470,000 vehicles will be actually sold online by 2003. J.D. Power & Associates says 40 percent of American car buyers are using the Internet for researching their purchase.
Boden said online buyers at his dealership are getting fleet prices, and only a few demand to test drive the car before they buy it.
”Sometimes they want to kick the tires, but that happens a lot less with Internet sales,” he said.
”We encourage them to get the information first, and by the time they get here, most of them already have made up their minds about what they want.
”We’ll even bring it to your house if you want. We’ve done that.”