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GM & eBay: Is car buying online a good deal?

Consumer Reports News: August 13, 2009 08:35 AM

General Motors is looking to the Web to broaden the car-buying audience through a partnership with eBay and participating California Buick, Chevrolet, GMC, and Pontiac dealers. Through this pilot program that runs through September 8th, West Coast car buyers have access to the virtual new car showroom. Shoppers can browse models on gm.ebay.com and find all the vehicle details and features. On some models there will be a “Buy It Now” price or an option to negotiate with the dealership to give your best offer.

Consumer Reports looked at the offers in this new channel to see which is better--shopping online through this program or going into the dealership? We looked at the deals and compared them to our Bottom Line Price, which factors in any dealer sales incentives, holdbacks, and rebates from the dealer-invoice price.

The results: The eBay program can save you money on certain models.

We surveyed a variety of models, and focused our detailed comparisons on three recommended vehicles: the 2009 Chevrolet Malibu, 2009 Pontiac Vibe, and 2009 Chevrolet Avalanche.

On the Malibu, we found the “Buy It Now” price to be over $2,300 less than the MSRP and almost $400 below our Bottom Line Price.

For the Vibe we found a savings of over $1,600 below our Bottom Line Price and over $3,000 less than MSRP. Both the Malibu and Vibe had factory cash back, as well.

However, not all deals were good ones. The Chevrolet Avalanche eBay price was $3,000 more than our Bottom Line Price and only $950 below the MSRP.

You can find good deals though the GM/eBay program. However, it’s important when shopping in this arena to do your research and read all the details. Since eBay is an auction site, you can have competition for the model. With the auction’s clock ticking down, you have limited time to make a decision. You also need to be prepared to purchase the vehicle and quickly arrange pickup and shipping. Also note that prices aren’t set in stone until there is a final agreement between the buyer and selling dealer.

Buyers should be wary of unexpected add-ons or markup-driven enticements (e.g., VIN etching, stain protection, extended warranties), just as they would with a traditional purchase. And as always, the buyer may need financing. Best to know the fair rates and secure a loan quote before accepting dealer financing. If the dealer can’t meet or beat your best rate, you’ll have an alternative plan.

Car shoppers nationwide can use the power of the Internet to check local inventory and solicit offers from nearby dealers by using the automaker’s Web site. What makes the eBay program unique is the ability to bid on a product and watch market forces in action, or conveniently choose to “Buy it now.”

When buying any new car, whether at the dealership or online, through eBay or from a neighbor, focus on choosing the best car for your needs and budget. ConsumerReports.org has a variety of tools to help you make an informed choice, then empower you with the Consumer Reports Bottom Line Price from the New Car Price Report

Liza Barth 

   

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