Web 2.0 Meets Car 5.0

By James Turner
June 22, 2008 | Comments: 1

Buying a car is probably my least enjoyable experience on Earth. Ok, that's an exaggeration, having my eyes torn out by rabid weasels is probably worse, but not by much. Traditionally, refreshing the family car have involved long hours in "The Closer's Room", haggling over price without a lot of data on my side of the table, and wondering just how much flexibility there was in that extended warranty price. The last time I had shopped for a new car is when I got my 2003 Civic Hybrid (and who;s laughing now about that choice, eh?) That process had consisted of going to the local Honda dealer and doing my best to haggle the lease rate in the absence of much hard data to back up the negotiation.

As anyone who's shopping for a car recently knows, the Web has changed car buying as drastically as it changed DVD rentals or book buying. The two forces that it brings together to empower consumers should be familiar to students of internet commerce. Firstly, it increases the amount of data available with which to negotiate, and it allows geographically distant businesses to compete for my trade.

The wealth of data available to a new car buyer today is pretty impressive. My wife and I were looking for a 4WD or AWD vehicle to replace our 2001 Dodge RAM 1500 Quad Cab, which required a new mortgage every time we filled up at the pump. Starting at cars.com, an classic study in Web 2.0, we were able to quickly narrow our search down to just a few vehicles based on price, mileage, and features; as well as the crash test ratings.

We then bopped over to Consumer Reports to check out their reviews. Now, Consumer Reports might seem about as Web 0.0 as you can imagine, being a print publication with companion yearly buying guides, but they've embraced the idea that not everyone wants to read a monthly magazine, and offers searchable access to their product reviews and articles on their web site as a separate subscription.

Based on those two data sources, as well as visits to the company websites to check out option packages, we managed to narrow our choices down to the Jeep Patriot, Honda CR-V, Nissan Rogue, Toyota RAV4 and Ford Escape in just a few hours. Of course, no amount of new-school internet e-commerce can replace actually sitting in a vehicle, so we had to get ourselves over to some local dealers to do test drives, which included driving the CRV and Patriot up the side of a dirt road on a mountain to simulate winter driving conditions.

As soon as we had narrowed the choices down to the Patriot and CR-V, Web 2.0 swung back into full force. Back at cars.com, we were able to quickly find local dealers offering both vehicles, and start calling (and e-mailing) around to find what the best dealers where. We were aided by the Kelly Blue Book database of current selling prices, which led us to quickly conclude that the Honda dealer was sticking to a price way over what was reasonable ($1,500 over sticker) A few e-mails and phone calls later, we had two Honda dealers competing on price and eventually settled with one for nearly $1,500 below sticker.

But the Internet wasn't done yet saving us money, we knew we wanted to extend the warranty beyond the anemic 3/36,000 standard that Honda (and everyone else) offers these days. We had made a point of pricing out the service plans from the dealers as part of the initial pricing research, and knew that $1,900 was the "going rate" for an 8/120,000 service plan with no deductible. However, I had also googled and found a dealer in Rhode Island who sells the same service plan from Honda for half the price. This is the geographic competition that the web has brought to many businesses. Of course, Honda's not happy that one of their dealers is undercutting everyone else, and has tried to shut them down (the dealer has a temporary court order keeping them in business while the legal niceties are fought in court...) And while we ended up buying the contract from the dealer, it was because when we told them we intended to buy the contract out of state for much less, the price of the contract magically came down to just over what we'd have paid to the RI dealer (which tells you just how much profit margin there must be for service contracts sold through local dealers, no?)

I had already pre-arranged financing (online of course), and was walking into the dealer with a check ready to fill out, which left them in a "beat this rate" situation (they did), as well as reducing the stress of wondering if I'd qualify. All that was left was to add the car to my GEICO policy (done in a few minutes on the company web site, of course), and start looking for someone who wants a massive piece of Dodge pickup (anyone out there want to make me a good offer? Low mileage!)

So what's the point of all this, beyond bragging about my shinny new Royal Blue CR-V? Just another notice that the internet has changed the way we run our lives, to an extent that would have been hard to believe even 10 years ago. As much as we may gripe about increasing restrictions to privacy or attempts to gouge high-usage ISP subscribers, it's still become a pretty amazing part of our daily lives. It has certainly taken what in the past was an agonizing ordeal, and turned it into an almost pleasant experience, one in which I held a lot more of the cards than I have in the past.


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1 Comments

Buying a car is probably my least enjoyable experience on Earth.I have bought an automobile once, it has gone bad two one week later .

I like your book and the article, I have also learned many things from inside. I work in kswchina, a examinations site about education. I am very happy that I can know so many friends in here.

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