IF you've ever been frustrated by the car dealership experience then you are not alone. A common reaction is to research your intended purchase on the internet - it's become easily the favourite tool for buyers - then approach the showroom heavily armed with every detail. But there's still a lot of legwork involved and the uncertain business of haggling.
Shoshi Vorchheimer was so motivated by her negative experiences that she decided to set up a website designed to do the bargaining for you.
"Women still feel judged and dismissed or not taken seriously when they go to buy a car," she says. "I would walk into a dealership with my husband and automatically they would look at him and talk to him. It was like I was not part of the process at all."
In December she launched Dutch Auction Auto, which takes the haggling out of the process by making dealers compete for your business.
It assumes you've already done your research and know exactly what you want. You pay a $550 deposit to show dealers you're serious, specify your car and set a maximum price, with guidance from the site, which includes delivery. And, importantly, you remain anonymous.
Dealers registered with the site are told the details of the car, the price expectation and the buyer's postcode. Then they submit bids.
If you're happy with one, the $550 becomes the deposit on the car. If not, you get it back. Vorchheimer has more than 300 dealers across Australia and is gaining them at the rate of four a week. The site charges dealers a few hundred dollars commission on each successful deal - comparable to the amount other websites such as Carsales or Carsguide charge just for a lead.
The idea caught the eye of Sathyan Nair from Melbourne, who works in IT and was shopping for a BMW 328i. He went to two dealers and phoned around, but thought he could do better.
He registered on the site, specified the car with some options and set a maximum price. It turned out to be a bit optimistic, but he still beat what showrooms were offering. "The quote I got was $4000 higher than the price I put, but around $6000 better than the quote that I got from the dealers directly," he says. Dutch Auction Auto is the latest in a spate of sites that have sprung up recently, designed to turn the buying process on its head and empower buyers.
After years in the retail side of the business himself, Michael Ballout started Discountmynewcar.com.au in 2011. His model involves a refundable fee of $49 to deter bogus inquiries and a dealer network focused on NSW. Dealers only get the customer details when a buyer selects a satisfactory quote and the site is focusing on recruiting associations that can offer it as a benefit to members or staff.
Ballout says the idea works well for dealers, too, because they would typically spend more than the $200 commission on advertising. "It's a lot less than the dealers would allocate on a per-vehicle basis in their advertising budgets for a weekend. When I was working in dealerships, we used to allow up to $500 a vehicle for a newspaper or radio campaign."
He says the model works best with mainstream cars and that's echoed by a similar site, Autogenie, set up mid last year by Australia's second-largest novated lease company, Smartsalary. Chief commercial officer Dave Adler says Autogenie has the advantage of a large dealer network across the country built up over 10 years to handle novated leasing for companies. Through this business, Smartsalary sources 10,000 cars a year, equivalent to 1 per cent of the new car market, and can use that power to get substantial discounts.
Like other auction-style sites, it doesn't aim to help the buyer make a choice about which car to buy, but takes the legwork and the hassle out of purchasing.
For a non-refundable fee of $49, Autogenie gathers three quotes from its dealer network and believes most buyers can expect a discount of 10 to 15 per cent off the manufacturer's recommended retail price - worth thousands of dollars in most cases.
As with other sites, buyers and dealers remain unknown to each other until the buyer decides on an acceptable price and delivery date. Then the dealer pays a flat fee of $250 - the same as Smartsalary charges for a completed lease deal.
The cars it sources mirror the ones it sources for novated leases, too, with the Mazda 3, Holden Cruze and Volkswagen Golf topping the list and an average transaction price of $32,000. Adler says none of the auction sites are doing big numbers yet as the model is still being tested. "This is the first time many people will have bought a car in this manner. It will take some time before people are comfortable with the service."
But he expects online sales to grow to rival the traditional showroom or dominant classified-style sites such as Carsales.
One happy customer already spreading the word is Anton Donde, who says he would skip showrooms altogether next time he shops for a car. He went looking for a Lexus GS350, then remembered meeting someone who worked at Autogenie.
In the end, he saved $7000 and got just what he wanted.
If this method of car buying takes off, he won't be the last.