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American Morning

Internet Car Buying a Good Deal

Aired January 10, 2002 - 09:25   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: If you are like a lot of people, buying anything on the Internet might be a little bit intimidating to you. Many people are nervous about punching in a credit card number, and sending it off into cyberspace, I probably shouldn't even ask you what you think about buying something really important and big over the Internet, like a car.

Now, hold on, before you say no, check out how much money you might save. It might just help you conquer that little fear of yours. CNN's Brooks Jackson has that story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is the other master key and remote.

BROOKS JACKSON, CNN CORRESPONDENT: Edith Graciela Sanabria drove a hard bargain for her new car -- over the Internet, and she couldn't be happier, because Internet car buying saves money.

EDITH GRACIELA SANABRIA, INTERNET CAR BUYER: You can get better prices, also. So I got this good deal on this car.

JACKSON: Mrs. Sanabria is not alone. A pair of new studies by two business school economists examined more than 700,000 recent auto purchases nationwide, and they show car buyers who use the Internet got substantially better prices.

FIONA M. SCOTT MORTON, YALE SCHOOL OF MANAGEMENT: For the ordinary consumer, we found about a 2 percent price savings from using the Internet, and on an average car, that translates to about $500.

JACKSON: The study looked at Autobytel, the largest buying service, but dealers say all Internet car buyers are much better informed.

JACK TAYLOR, OWNER, ALEXANDRIA TOYOTA: The Internet has made our customers -- I hate to say this, but in some cases smarter than we are.

JACKSON: Comparison shopping is easy. Many dealers like Taylor have their own web sites showing prices. This dealer offers special Internet prices, some below factory invoice.

(on camera): And many dealers will bid for your business. Just pick the car you want, fill in a little information, and a dealer will e-mail you a no haggle, no hassle selling price, usually a good one.

UNIDENTIFIED MALE: What we do is we give them our best price, our best deal right up front.

JACKSON (voice-over): That goes for any consumer, but minority buyers have even more to gain.

UNIDENTIFIED MALE: What we found was that what we normally considered being disadvantaged minorities such as Hispanics and African-Americans are likely to save more using the Internet than the equivalent whites are.

JACKSON: Daphne Mustafa figures she saved $1,000 on her new car, using the Internet.

DAPHNE MUSTAFA, INTERNET CAR BUYER: And this way, you're blind. You know, nobody can see you. You get the information you need, and you can go in a little bit better prepared to negotiate.

JACKSON: Minorities in the studies paid about two percent more than whites when bargaining face-to-face, but minorities using the web found a level field.

MORTON: When these folks use the Internet to buy their car, they paid exactly the same price as white consumers.

JACKSON: So, use the Internet to buy a new car, and you could save enough money, say, to buy a new computer.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE)

ZAHN: Thanks, Brooks.

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