Car Shopping on Internet Still in Pits

For most people the idea of buying a new car is quite exciting, but in practice quite exhausting and frustrating. A new Web site offering consumers the opportunity to buy a car over the Internet may not deliver just that, but goes part of the way by giving consumers the opportunity to peruse new and used cars online, and to complete the sale the old fashion way.

Tim Miles, managing director for said the site was not about getting buyers to get over the 'touch and feel' need, but to give customers the opportunity to meet dealers on an equal footing.

"Customers will have knowledge about the deal and the car before going to the dealership to complete the deal. We don't have any figures for Australia as yet, but in the US Fortune Magazine claimed our approach can save consumers an average of $US490 off the price of a new car."

Miles sees the site as important in the corporate sales arena as well.

"Small to medium enterprises are in a position of not having a great deal of buying power. However, motor vehicles are still a large part of their cost. We are working on a project where these companies can post their purchase requirements with us and we will tender them out."

The site has contracted 160 accredited dealers representing all automotive makes, with plans to expand to 240.

All used cars are subject to a 135-point check, standard warranty and 72-hour vehicle return policy. The company also provides training for dealers on how to handle online customers and sales.

Miles said dealers, who are charged for the customer introductions, are able to give consumers a better price on vehicles because they are allocated exclusive territories.

"Their cost of sales and dealership costs will be lower, while enjoying increases to their volume of sales."

Miles said he believed the company would be profitable within three years with a total market potential in Australia of 1.4 million over the next 12 months.

"We see growth on our site in line with Internet growth. In the US, 54 per cent of all new car buyers turn to the Internet for help, this is up from 40 per cent in 1999."

Car manufacturers' sites are not seen as competition Miles said, as consumers going there have already made a brand decision. "People coming to our site haven't made a brand decision as yet."

In 1999, Autobytel US, which started operations in 1995, generated more than $US13 billion in car sales.

Australia is the fourth country where the company has established Web sites, with the company behind the site majority Australian-owned. Shareholders include St George Bank, RACV (Royal Automobile Club of Victoria), The Trading Post, Astre Automotive, Fortis Insurance and The Strathfield Radio Group.

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