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More people than ever are using online auto showroom, classifieds and research to make car and accessory purchases. Remember the first time you bought something online? Your purchase price was probably negligible (perhaps a book from Amazon.com or a clothing item from Sears), and yet a little uncomfortable. There was something about buying sight unseen and sending credit card information into cyberspace that initially unnerved the most technologically savvy among us. Yet, in just a few short years, America has gone from agonizing over minor Internet transactions to conducting major complex purchases online without batting an eye. Nowhere is this significant economic transition more apparent than in the acquisition of cars and car insurance.
Buying a Car Online
According to a recent USA today article, 35% of first-time car buyers name the Internet as their most important source of information for their purchase, outpacing all traditional media options. Furthermore, well over 60% of all automobile dealers are now listed with one or more major online car shopping services such as Cars.com, Autobytel, and Edmunds, and most manufacturers now offer online purchase services through their home websites.
Buying a car online is not like making reservations at Ticketmaster or bidding for a stereo on Ebay. The sites function more like research archives and brokers. First, they provide their customers with information, option selection, side-by-side comparisons, etc. Then, when the desired vehicle is specified, they locate a dealer nearby who will make personal contact with a guaranteed quote and an easy, no-hassle purchasing process. This is usually carried out at the showroom, though some services offer “dealer-free” transactions where all negotiation is carried out online and the vehicle is delivered to the buyer’s home.
Cyber-Insurance
Purchasing car insurance online is similar in that all major insurance companies and brokers now offer auto insurance quotes online and there are a number of “competing quotes” sites, like Insweb and YouDecide. However, unlike their auto manufacturing counterparts, the large companies are yet to list with these brokers. If you want quotes from State Farm, All State, Geico, etc., you must go to their individual sites. Another dissimilarity is that the insurance is typically purchased online, without a single personal contact with an agent. Drop-down menus and pop-up “explain this” windows offer all the guidance a typical consumer needs.
A Picture of the Online Future
These two merchandising developments represent two major trends in cyber-purchasing. On the one hand, the Internet can streamline and meliorate the research and purchasing process for major acquisitions (what once took hours of hard work and miles of driving can now be done in an afternoon from the comfort of your own home), though the purchases themselves will still take place in person. This is because the processes involve financing and other complexities that make each transaction unique, requiring individual attention to detail that defies standardization. On the other hand, where major purchase processes are uniform enough to lend themselves to a codified procedure, the entire transaction from first contact to final signature can take place online. In either case, an unprecedented amount of information can be accessed, compared, and evaluated in an efficient and time-saving manner.
Dos and Don’ts
While the logistics of purchasing cars and car insurance may have changed with the online revolution, basic rules of good shopping have not. Here are several tips that were good for your grandparents and are just as good for you.
- Shop around. This is easier than ever with online shopping, especially when the car shopping services compare dozens of dealerships near you to find just what you want at the best price available to you. But be sure to visit more than one service – most dealers do not list with them all. When shopping for insurance, you’ll have to do a little more cyber-legwork, since quotes from the major companies are only available at their home sites. But it’s still worth the time.
- Know what you want and how much you’re willing to spend. There is no substitute for being well prepared and well educated going into a major purchase. It makes you far less susceptible to sales pressures and techniques. The cornucopia of information available online makes it easier than ever to be fully prepared and ready to shop.
- Be ready to walk away. Whether shopping for cars or car insurance, your options are virtually limitless. There is never any reason to settle for less than you want at a price higher than you’re willing to pay. Don’t allow yourself to get so attached to a product that you decide you can’t live without it. Do enough research to realize what’s reasonable, and then insist on it. Be ready to say, “Someone’s going to sell me what I want, but it doesn’t have to be you.”
Here are a couple of sites to help you further:
Internet Car Buying Tips from Safe Car Guide
10 Steps to Buying Auto Insurance