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How to buy a car online

neddy

Top Contributor
Just read another online success story in The Australian.

This tells the story of a woman was so motivated by her negative experiences trying to buy a car that she decided to set up a website designed to do the bargaining for others (and without being sexist, I presume she gets a lot of female business!).

It just goes to show that no matter how many "big fish" competitors there are out there in the online space, there is still room for niche sites.

Imagine how much business she will get from this article alone!
 

smee

Top Contributor
Just read another online success story in The Australian.

This tells the story of a woman was so motivated by her negative experiences trying to buy a car that she decided to set up a website designed to do the bargaining for others (and without being sexist, I presume she gets a lot of female business!).

It just goes to show that no matter how many "big fish" competitors there are out there in the online space, there is still room for niche sites.

Imagine how much business she will get from this article alone!

Probably not as much if it were on news com au because the Australian access requires a digi pass.
 

neddy

Top Contributor
Probably not as much if it were on news com au because the Australian access requires a digi pass.

Forgot I had a subscription! Sorry. (But if you can access the story online, do so, because they have some great graphs and comparisons).

But here is the article:

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.
 

findtim

Top Contributor
a GREAT idea, i give her @ 6 months till "you know who" buys her out for a motza

HTML:
 "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,"

flip this and its similar to what "i think" chrisC talks about re: AMA , there must be a facility on DAA that allows an after auction contact?

[ apologies to chrisC if i have got his ideas out of context ]

tim
 

DavidL

Top Contributor
a GREAT idea, i give her @ 6 months till "you know who" buys her out for a motza...

I give her 6 months. 18 months before her domain ends up on the drops.

It's unfortunate - always like to see web success stories but this one just doesn't work...
 

findtim

Top Contributor
I give her 6 months. 18 months before her domain ends up on the drops.

It's unfortunate - always like to see web success stories but this one just doesn't work...

told helena and she says YES its a winner, this is one of those social media viral sites once word gets out.

lets check back 30/6/14 ( to be fair on timespan ) and see where its at, i say winner you say loser

tim
 

James

Top Contributor
a GREAT idea, i give her @ 6 months till "you know who" buys her out for a motza

HTML:
 "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,"

flip this and its similar to what "i think" chrisC talks about re: AMA , there must be a facility on DAA that allows an after auction contact?

[ apologies to chrisC if i have got his ideas out of context ]

tim

Wouldn't be the same company who buys every car related domain would it ;)
 

findtim

Top Contributor
of course it will be.

but "news just in" i have a mate that knows about this and because DL put the bet up on 30/6/14 i asked mate the question about it, he went online and said to me " i've seen this before..... 10 years ago"

another website tried this and all that happened was people got the best price, got their refund and then bought locally by saying " this is what i can get it for " , the website owner then changed his business model to a FEE and "portion refund" and the website died in the arse.

my mate ," as in my best man mate" buys and sells cars often so it so happens he was actuallly dating a rep from that old site at the time so of course she told him the confidental stuff .

so it will be intresting, perhaps i'm gonna lose to DL ? the system has failed before, time will tell.

i still think times have changed and this will succeed.

tim

tim
 

DavidL

Top Contributor
Yeah that's the problem Tim.

Without a commitment from the buyer, the site will just be used as a pricing tool and not complete enough deals. Then the dealers will lose interest and stop quoting making it even harder.

If you try to get a commitment from the client beforehand, your enquiry level will be decimated

There have been dozens of sites like these over the years. They pop up often with a good bit of PR which gives them a initial honeymoon boost and, if they are lucky, a couple of deals. But it's not sustainable and they all wither. Even the ones with multiple-million dollar backing.
 

neddy

Top Contributor
i still think times have changed and this will succeed.

Whilst I agree with a lot of DavidL's assessment, I also think this one has a chance at success. There are a few factors for my reasoning - but of course I may well be wrong!

1. Social Media - this is able to be harnessed in ways it never was a few years ago. Look at the proliferation of successful "Mumtrepreneurs" - and their various blogs that have huge readership.

2. Women power. Say no more.

3. She is obviously media savvy - she has been on ACA - and has Tracey Spicer on board to assist. https://www.dutchauctionauto.com.au...er joins Dutch Auction Auto - 16 JAN 2013.pdf

Dutch Auction Auto is thrilled to announce the support of one of Australia’s most experienced and respected TV journalists, Tracey Spicer, to help champion their cause. Joining leading automotive entrepreneur and “start-up” business expert, Ms Shoshi Vorchheimer, Tracey will play an important role in helping to support women in their everyday dealings, including the purchase of a new car.

Without a commitment from the buyer, the site will just be used as a pricing tool and not complete enough deals. Then the dealers will lose interest and stop quoting making it even harder.

They cover this off David: https://www.dutchauctionauto.com.au/how-dutch-auction-auto-works

Step 3

Enter your credit card details

A deposit is taken and held securely. If you purchase a car, the deposit paid is deducted from the final purchase price of the new car. If the auction is unsuccessful, the deposit is 100% refundable.

But as I said initially, you may well be right - time will tell.

Come what may, I wish her well. Great to see entrepreneurship in motion. :)
 

Shane

Top Contributor
A similar concept is being launched for business insurance where brokers will supposedly 'bid' for a client's policy:

premiumfox.com.au

I don't think these 'Dutch Auction' systems work for a lot of the reasons that David has already given.

I give both businesses twelve months...
 

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