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Car buyers drive Web traffic

LOS ANGELES — Jane Wolff used to spend days visiting car dealers and reading auto magazines to figure out which car to buy. Even then, the retired schoolteacher said she wasn't sure she was getting the best deal. The Internet has changed all that. Wolff went digital with her research this time, collecting price and trade-in data from auto information websites operated by Edmunds, Kelley Blue Book and TrueCar Inc. The bottom line: Wolff last month negotiated a Subaru Outback Limited for near the invoice price.

"I went to the dealers better prepared," the Chino, Calif., resident said.

Shoppers such as Wolff are driving more traffic to such websites. Such companies, including car sales referral sites Autobytel.com and CarsDirect.com, are attracting tens of millions of visitors a month because they enable shoppers to gather information without having to journey to car dealers and face down the sales staff.

"That whole concept of working out a deal and coming out with a final price is the area of car buying where customers are the most dissatisfied," said Jim Gaz, senior director of automotive retail research at J.D. Power and Associates, a consulting firm that surveys buyers about auto-purchasing experiences.

That's why almost 80 percent of the car shoppers J.D. Power surveyed about their car-purchasing experiences last year used the Internet for research before buying a vehicle, Gaz said. They wanted to "arm themselves with information about price and features before they approach a dealership."

Edmunds is experimenting with ways to answer consumer questions even from the showroom floor.

When Denver resident Carrie Barker used her iPhone to tell friends on the Twitter social network that she was car-shopping recently, a member of the Edmunds Live team tweeted back, offering help. Later that day, Barker suspected she had received a lowball offer for a trade-in from a Hyundai dealer and tweeted back to Edmunds, asking for used car price data for her aging Ford Escape.

"I found out they should have offered me about $200 more, and once I am ready to sell it back, that is what I will ask for," said Barker, who at age 23 is nervously navigating her first new car purchase.

Although there are other sources of digital auto information, including Consumer Reports, the trio of Edmunds, Kelley Blue Book and TrueCar have become the major players by closely tracking sales and pricing data, hiring analysts to identify trends in the data, evaluating new models and estimating the amount of money individual automakers are pouring into sales incentives and other discounts.

They don't charge for their information. The companies, which keep their revenue figures private, collect money from manufacturers, dealers, insurers and finance companies for advertising and sales leads.

"We now get about 18 million visitors a month, and they are looking at about 250 million pages of new and used car information," said Paul Johnson, chief executive of Irvine, Calif.-based Kelley Blue Book.

At times, the research and opinions of these companies generate angst among automakers and car dealers.

Edmunds tussled with General Motors Corp. in 2010 after it became one of the first organizations to label the auto company's Chevrolet Volt a plug-in hybrid rather than the electric car description GM was using in its marketing campaign. Edmunds' classification was supported by California's Air Resources Board, which also calls the car a plug-in hybrid because it can be powered by both electricity and gasoline.

TrueCar and Edmunds, both headquartered in Santa Monica, Calif., received angry calls from auto dealers in 2011 when analysts at the companies suggested that consumers delay purchases until an inventory shortage and price rise caused by the Japanese earthquake subsided.

With about four out of five auto shoppers already tapping the Internet, Edmunds Chief Executive Jeremy Anwyl doesn't see a lot of opportunity to attract new eyeballs. Instead, digital auto information companies will have to become more involved with the sales process.

"We all need to be doing a better job connecting the dots for people," he said.

Car buyers drive Web traffic 01/05/12 [Last modified: Thursday, January 5, 2012 3:30am]
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