Online auto referral service Autobytel.com Inc. will launch a new direct-purchase program today that will make buying cars as easy as buying books online.
With the nationwide direct-to-consumer buying program, Irvine-based Autobytel said it will offer consumers access to millions of vehicles--and the sticker price for each--from dealers nationwide.
"If we want to be the place that consumers come to for buying a car, then we need to sell them cars in the way they want," said Ann Delligatta, the company's chief operating officer. "If you want to come to the site and make your own decisions, great. If you want to continue having dealers send you quotes, you can do that, too."
Traditionally, shoppers have turned to Autobytel for information on cars and light trucks and for dealer referrals for vehicles. The Internet services are free to consumers, who provide personal information about who they are and where they live.
Autobytel makes money from auto dealerships that pay to be part of its referral service and leads on buyers.
Now, the company also is allowing customers a direct link to these dealerships.
Consumers visiting the site can search for cars by make and model, as well as by location and specialty automobile features. The site then pulls up all vehicles that match the description, and lists the vehicle's price.
If a person wants to buy a car, he or she pays a $129 deposit while the paperwork is being processed. Autobytel gets $29 for administrative fees; the remaining $100 goes toward the car. The $129 is refundable if the consumer decides not to buy a car.
Analysts praised the company's shift, saying that the dealer-referral system limited consumers' true savings potential when shopping for cars online.
"If there are only a limited number of dealers that are bidding for your sale, what's the incentive to give a low price right away?" asked Adam J. Weiner, a senior automobile analyst at the research firm Gomez Advisors. "On a national level, no one has done what Autobytel is going to do."
Autobytel's new sales approach comes as online auto sellers struggle to find the right strategy for selling vehicles on the Internet.
In just the last two years, the online car-buying field has grown increasingly competitive. Rivals Autoweb.com Inc., CarsDirect.com Inc. and CarOrder.com Inc. serve as intermediaries between buyers and dealers. General Motors Corp. poses a threat since it launched GM BuyPower, a site that links its huge network of dealerships. Even Priceline.com, the name-your-price service that first sold only airline tickets, has expanded into other products, including cars.
Industry experts note that Autobytel's key advantage is its dealership network. The company has been able to keep expanding the network of dealerships that list on its site--hitting 3,143 dealers as of Sept. 30, according to regulatory filings.
"You've got the undisputed leader of one model of online selling beginning to see the tide shift to another model," said Chris Denove, who follows automotive e-commerce trends for J.D. Power & Associates, the Agoura Hills-based marketing consultant. "Autobytel is saying they don't want to have the boat leave without them."
Autobytel officials said the new program will be particularly attractive to car buyers who want to comparison shop, but also wish to avoid high-pressure sales tactics at traditional dealerships.
As more people get online--and get used to making large purchases online--the number of shoppers willing to buy a car over the Net grows. A 1999 J.D. Power survey reported that the percentage of new-car buyers who use the Internet before they buy a car is up to 40%--compared with just 25% in 1998.