News Column

Auto Sites Become a Recognized Niche in Cyberspace

Jun 2 2000 1:50PM

By Scott Williams

Internet transactions accounted for nearly $6 billion of the $360 billion U.S. consumers spent on new cars last year. Auto industry research firm J.D. Power & Associates estimates that in two years, more than half of all new car sales will be done entirely on the Internet, with the estimate for used cars slightly lower. Gomez.com, which ranks shopping Web sites, lists 14 major car-buying sites, and a simple Internet search uncovers several more. Clearly, buying or leasing a car on the Internet has become a recognized niche in cyberspace.

So, with all these car deals happening over the Internet, does it make sense for business owners to purchase or lease fleet vehicles over the World Wide Web? Not yet.

As it stands now, most Internet sites are geared toward consumers not fleet-buyers. Individual consumers seek low prices without having to endure the intimidating process of buying a new car. The sites offer the lowest possible price with no pressure, and many also offer financing, insurance, and warranties. Andy Mountain, a spokesman for DriveOff.com in Denver, says consumers like the fact that they can choose their vehicle and options, get a binding quote, and arrange financing without having to deal with salespeople.

That's great for consumers, but most business owners don't mind negotiating all the details, says Manny Loya, vice-president of finance for Office Solutions Business Products and Services, the number 196 company on the HISPANIC BUSINESS 500. "We like the game, we enjoy it," he says. "It makes our job interesting."

To make online fleet purchases a reality, the Internet will have to equal the low prices most dealers offer business owners, while matching the convenience and personal service these volume buyers already enjoy. And Mr. Mountain says the Internet is not yet ready to tackle the complex field of commercial auto leasing.

Roxanne Rivera, CEO of PMR Construction Services Inc., ranked 306 on the HISPANIC BUSINESS 500, says she buys her vehicles from a local car dealer who offers excellent service. The company has 36 Chevrolet vehicles in its fleet.

"I can't even imagine how [Internet sites] could offer better service," she declares. "We have a sweet salesman who brings the vehicles out and lets us test drive them. We might be able to find something cheaper on the Internet, but what we save in time kind of makes up for that."

The prospect of finding something cheaper on the Internet lures many to cyberspace shopping. But what works for books and plane tickets hasn't yet translated into lower prices for fleet vehicles, which manufacturers and dealers offer at discount to their best customers.

"We tried it and found out it's not cheaper," says Marcelo Afonso, chief financial officer for Northeast Construction Inc., the number 124 company on the HISPANIC BUSINESS 500. "We have an ongoing relationship with our dealers here. We pay $50 over the invoice because we buy so much from him he gives us a better deal."

Comparable prices can be found at Autoeasy.com, a Web site operated by Claire Haley of Ahwahnee, California. Ms. Haley advertises some fleet vehicles at $49 over invoice, but they have to be ordered from the manufacturer, which takes 30 to 120 days for delivery.

Mr. Loya says his company, which leases its 11 delivery trucks from G.E. Capital, uses the Internet to check prices to make sure they're getting a good deal. "[G.E. Capital] locates the best deals on a particular vehicle and comes back and we negotiate on rate. We get the best cost and monthly payment," he says.

Mr. Loya says for his company to buy over the Internet, a particular Web site would have to be easy to use, offer lower prices, and provide assurance that they had shopped around for the best possible deal. "At least then I would have some comfort that I had shopped," he says.

For some sales-oriented business owners, the cold technology of Internet shopping stands as another drawback. "You're not dealing with a human being," Ms. Rivera says. "And we like dealing with a human being."

Ms. Haley says she provides a telephone number on her Web site for that very purpose. "I do find usually that before people close a deal with me they will give me a phone call. Most people want to know there's a real person there," she says.



Source: Hispanic Business Magazine


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