Are Online New Car Prices Legit?

There once was a time, almost twenty years ago, when the only way to find out the fair price for a new car was an arduous task. A new car shopper had to gather Sunday newspapers, drive from car dealer to car dealer, and haggle, haggle, haggle. Even then, the only price the buyer had was the price regional auto dealers were willing to give. How were they to know if they had the best possible price? How were they to know if car shoppers just a few cities over were getting better deals or not? The only way, would be to somehow contact other people who purchased the same new car, or drive several miles to explore the pricing of other car dealerships.

Fortunately, today’s car buyers live in a completely different market. In many ways, new car pricing is in the hands of the buyer. With the invention of the Internet, and the incredible access it gives modern shoppers to information, today’s car buyer should be as informed as the local dealer when it comes to cost, hold-backs, incentives, financing, and dealer profit margin. There is no reason a buyer should test drive a new car without already knowing the absolute best price they can get.

So, is this online new car information accurate? Are online car prices legitimate? Can a buyer trust the information so freely served up on hundreds of car shopping websites around the country? The answer: Possibly.

The truth is, about 95 percent of all online car shopping sites are really just lead aggregators. Modern web technology makes it simple to build a car buying site that is loaded with model specifications, new car builders, and fairly accurate pricing data. The trouble is, they pull the consumer in with all the fancy gadgets only to collect personal information, submit it to their lead aggregation database, and then resell their visitors’ personal info to hundreds of advertising and marketing firms, or to the major car buying sites.

So how does a modern car buyer find accurate information and pricing without sacrificing their privacy, or worse, ending up in the databases of hundreds of advertising agencies? The answer is really simple. Stay with the trusted sources. Do not enter your personal data into a form on a car shopping site unless it is known to be a trusted authority in the auto industry.

There are many trusted authority sites in the auto industry. All of these can be classified into two categories: Dealer Lead Suppliers or Consumer Negotiation Advocates. Dealer lead suppliers include sites from the automakers themselves, dealership websites, and sites such as Autobytel.com, KBB.com, Edmunds.com, NewCars.com, etc. Consumer Negotiation Advocates include sites like CarsDirect.com, AutoSeek.com, and iwantacar.com. Of course there are major differences between these two types of sites.

Dealer Lead Suppliers serve up a lot of information for car shoppers. Sites like Edmunds.com and KBB.com are jam packed with model specifications, trim and color options, and much more. TrueCar.com goes as far as showing visitors real-time car deal data from dealerships throughout the country. By tracking vehicle registration information, they publish extremely accurate new car pricing information. However, by serving up this wealth of ‘inside’ information that used to be reserved for auto industry insiders, they are in actuality trying to compel you to do the one thing that generates them cash: complete an online purchase request form.

By giving car buyers unprecedented access to new car information, Dealer Lead Suppliers are able to entice millions of visitors to complete online new car price request forms. The data collected by these forms, predominately the visitor’s contact information and buying preferences, is then sold to local new car dealerships, automakers, and auto finance companies. After completing the form, the car shopper should expect several phone calls from regional salespeople. Therefore, Purchase Request Form equals Calls from Regional Salespeople.

Consumer Negotiation Advocates have an entirely different business model. On the front-end they appear almost identical to Dealer Lead Suppliers. Like the other types of sites, they serve up unprecedented new car information. They give model specifications, trim and color options, and exceptionally accurate new car pricing data. And, like their competitors, they too want to compel the visitor to complete a new car price request form.

However, the Consumer Negotiation Advocates have a different use for the data collected by the forms on their sites. Instead of selling this data to car dealerships or manufacturers, they want to either keep the data or sell it to regional car brokers. The majority of these types of sites sell the data collected by their forms to brokers. Car brokers then contact local dealerships and negotiate on behalf of the car buyer. Many car brokers are long-time industry insiders and have tools at their disposal to help them drive down sales prices, increase trade-in values, and reduce finance costs. As their name suggests, they work as advocates for buyers throughout the deal process. The sites that do not sell data collected by their forms conduct the car broker services themselves.

For the most part, new car prices online are accurate. In many ways, they are more accurate and more informed than pricing sources that existed prior to the creation of the Web. In exchange for publishing access to better information, sites that tout new car prices online hope to gather personal contact information and buying preferences from their visitors. Their primary source of revenue is either the sales of data collected by forms on their sites, or car broker services.

Therefore, before a visitor completes an online Purchase Request or New Car Price form, they should consider the ensuing result. Do they want calls from local dealer salespeople? Do they want to haggle with the dealership themselves? Or, do they want a person with extensive industry knowledge and experience to act on their behalf throughout the process? The best deals, by a slight margin, are the result of the negotiating skills of Consumer Negotiation Advocates. Either way, a well informed, modern car shopper will get a better deal and more accurate new car pricing than buyers of the past.