Consumer Reports Slams Online Auto Sales

According to venerable information resource Consumer Reports, auto sales over the Internet are fraught with pitfalls, problems and overhype.

Consumer Reports recruited 1,056 online test shoppers nationwide to request quotes for six different vehicles from Autobytel, AutoWeb, AutoVantage, Cars.com, and CarPoint. The cars, all equipped with common options, were a minivan, a sport utility vehicle, a luxury import, a sport sedan, and two mid-priced sedans.

To pass the Consumer Reports test, dealers located within 100 miles of a shopper had to deliver their quotes by e-mail or phone within 48 hours.

Sixty-five percent of the would-be online car purchasers did not receive requested price quotes within two days, and the quotes that were eventually supplied were not always for the exact cars specified.

Prices Slippery on the Web

The research also showed that not all dealerships are willing to give quotes via phone or e-mail . Twenty-two percent of the shoppers were told they would have to visit the dealership to get a firm price. In one-third of the test cases, the dealers neither had the requested cars in stock nor could they find them quickly.

Test shoppers also found that surfing rarely turned up the lowest prices online. Consumer Reports noted "patchy" prices and that none of the five sites produced high or low prices with consistency. Overall price quotes were between 5 and 10 percent lower than the Manufacturer's Suggested Retail price (MSRP), which Consumer Reports said was reasonably competitive for some models but pricey for others.

Lou Richman, Finance Editor of Consumer Reports, said, "We discovered that the online referral services don't live up to expectations -- yet. Going online is a terrific way to do auto-related research, but you can't kick the tires through your computer monitor and you can't slide behind the wheel with your mouse."

However, Richman is not dismissing the concept altogether. "When online shopping matures in the next few years, consumers might well prefer the Internet to showrooms, but for now the car buyer still has to visit the dealers," he said.

The Internet Paves the Way

Even if few auto deals are closed online, the Internet's advantages for consumer research will keep customers coming back to the Web.

Most major car manufacturers allow customers to check out cars virtually before driving down to the dealership, and even auction giant eBay allows customers to shop for cars online.

For now, the most common use of the Internet will be to peruse options, compare models, and research safety records. A report last year by JD Power & Associates showed that 40 percent of new car buyers had used the Internet prior to making a purchase.