May 12, 2006, Newsletter Issue #40: Auto Websites Differences: Brokers Vs. Comparative

Tip of the Week

Not all car buying Web sites provide or feature the same type of services. Brokers’ sites make dealer referrals. Vehicle models are listed for the consumer to make a selection. Depending on the auto Web site, a price range or the options of the car can be selected by the car buyer.

In turn, the broker will submit the request to either a local dealer or dealers. Although, the broker may work with a number of car dealerships, dealers will not compete for the consumer’s business. Once the car is purchased, the broker procures a fee.

Some sites will connect the consumer with car dealerships that have agreed to participate in the system. The benefit to the consumer is that the dealers do not compete for your business. Other sites will obtain a number of local dealers to compete against each other to get the consumer an automobile on their terms.

Comparative bidding sites differ from online car buying Web sites. Unlike a broker site, comparative bidding involves a group of dealerships vying for the consumer’s business.

Dissimilar to a broker site, a comparative bidding site, the consumer pays the fee for using the service opposed to the car dealership remitting the referral cost. For dealers, the advantage to participating in comparative bidding site programs is the ability to acquire serious car buyers versus tire kickers.

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