The Net: The Biggest Used Car Lot Of All

But it offers tire-kickers plenty of help

Barry Queen knew his wife had her heart set on a specific automobile. Problem was, Ford no longer produced a Lincoln Continental in the pearl color she craved. So the Framingham (Mass.) lawyer went online, to the Ford Pre-Owned Showroom Web site. "Guess what was sitting on the Net?" Queen says--a low-mileage, fully loaded 1998 model in just the shade he was looking for. Queen examined color photos of the car's interior and exterior and clicked on a "sticker" listing its options and no-haggle price. He then keyed in his credit card and chose a nearby dealer where he wanted the car delivered. "Do I think I got the best deal I could have? Absolutely not," says Queen, who admits to paying close to $30,000. "But the money I may have saved negotiating with the dealer wasn't worth the aggravation."

Car shoppers who rely on the Web have traditionally bought models fresh from the factory. But Internet sales of used cars are on the rise. The Net can help you choose a model, search available inventory, and evaluate specific cars, says James McQuivey, a senior analyst at Forrester Research. What's more, you can find low-mileage luxury cars that have just come off lease--with time remaining on their warranties. And once you've settled on your pick, you can apply for financing online.

Consumers have lots of places to shop for used cars on the Net, from sites such as, which posts newspaper ads, to eBay, the Internet auctioneer (table). Two of the largest sites, AutoConnect and Trader Online (, recently announced plans to merge in the fall, creating a mega virtual used-car lot to be known as And Ford Pre-Owned Showroom, which has been selling used Fords, Lincolns, and Mercurys for about a year, is expanding its reach. It recently added New York to the four cities where it offers the service. General Motors had planned to start testing cybersales in Houston. But the project has hit a snag because Texas is withholding a license.

Overall, Forrester estimates that the number of used cars researched or bought via the Internet will reach 17 million in 2003, up from 4.2 million in 1998. A recent J.D. Power & Associates survey found that 26% of all buyers of late-model used vehicles (1994 model year or newer) went online for help with the shopping process. By contrast, 40% of new-car buyers used the Net along the way.

Those numbers suggest that many used-car buyers still haven't realized how powerful a research tool the Internet can be. In fact, the Web has more to offer the used-car buyer than the new-car buyer, says Chris Denove, director of consulting operations at J.D. Power.

Your first step is narrowing the field of autos you would consider. Many sites let you read reviews of older models and can help you determine if a car of a particular vintage is mechanically sound. For instance, Microsoft's CarPoint site gave the 1995 Cadillac DeVille generally good reliability grades. But it indicated that failure of the MacPherson Strut, a part of the car's suspension system, is a periodic problem. Even better, CarPoint estimated how much it would cost to fix it: $575 for each of four struts, plus $84.50 each for labor.

CRUNCHING THE NUMBERS. Once you've got a particular car in mind, lots of assistance is available to figure out how much it's worth. Check out Kelley Blue Book ( or Edmund's ( to estimate a car's resale value, including all of its options. Edmund's also offers ratings on a 10-point scale of a car's comfort, safety, and other criteria.

With a model in hand, pore through the online classifieds to find a dealer or private seller who is within a reasonable distance of your house. You might locate the Mercedes-Benz or Ford Explorer you want at one of the major car sites, such as CarPoint, AutoWeb, or Autobytel. They post ads from a network of dealers. Visitors to the Autobytel site will find exterior pictures of each specific car for sale, not just stock photos. If you're not sure what you can afford, you can type in the amount of cash you have to put down and your desired monthly payment. Then call up a list of vehicles that fit the bill.

Autobytel's "Certified Pre-owned CyberStore" cars must be no older than seven years and mustn't have more than 75,000 miles on them. Vehicles are also put through a 135-point mechanical and operational inspection, that, among other things, checks for evidence of frame damage or odometer rollback. Autobytel says it reserves the right to audit dealers. When you get the car, you have three days to return it, after which you get a three-month, 3,000-mile warranty.

You might be put off at the AutoWeb site by having to provide your name, phone number, and other contact information before learning details about any cars up for sale, including their colors. The good news is, the site tells you if a car has been recalled or is the subject of a Technical Service Bulletin, so you can alert mechanics about difficult-to-diagnose problems.

If you're not sure of a particular car's pedigree, check out Carfax ( Type in the 17-character vehicle identification number (VIN) and order a free "lemon" report. It will tell you if the car had major problems that caused the manufacturer to buy it back. You can purchase more detailed Carfax reports, for $20, that might reveal if a car has been damaged by flood or if its odometer has been fraudulently rolled back.

If you live in or near Tampa, you can chat online in real time with an Internet-only sales representative at For now, that's available only in Tampa. But in October, the company plans to roll out the service to customers in the 20 states where it owns dealerships.

For buyers looking for financing, AutoNation has links to Through this unit of DaimlerChrysler, approved customers are mailed a check voucher to present to the dealer the next business day. Giggo is offering used-car rates of 8.15%, roughly 1 1/2 points better, it claims, than the national average.

BankAmerica's Price Auto Outlet lets you finance the off-lease Jaguars, Mercedes, Hondas, and Toyotas it sells or leases through links to the bank's site. Price Auto Outlet has dealers in Linden, N.J.; Bethpage, N.Y.; Fort Lauderdale; and Anaheim, Calif.

HAGGLE AMMO. But what about price? How can you get a fair deal online? The no-dicker price promised at sites such as Ford Pre-Owned Showroom and Price Auto Outlet may be higher than one you would negotiate yourself--as Queen discovered when he bought his wife's Lincoln Continental. Yet one of AutoConnect's sales pitches is that with more than 900,000 classifieds (mostly from dealers), you'll be armed with the best pricing information on any given car--and that should give you a competitive edge. If a dealer doesn't arrive at a figure you can live with, you can always point out that through the Internet you know exactly where you can find a similarly equipped set of wheels for a lower price.

Still, prices posted on the Web are not guaranteed, as Charles Whitson of Leander, Tex., learned. Late last year, he almost bought a 1996 Chrysler New Yorker from a Dallas-area dealer he found through AutoConnect. Whitson says he was ready to pay the $12,900 price quoted on the Internet, but the dealer jacked up the amount by $1,000 when he showed up in person. "The dealer was shocked at the price listed at AutoConnect and showed me a newspaper ad with a higher price," he says. Whitson was so disgusted he bolted the lot.

The Internet can be extremely helpful for collecting information. But in the end, it's only the handshake that counts.