Consumer Reports Survey: Less Than a Third of Potential Online Car Buyers Could Complete Their Auto Purchases Online

  Car Shoppers Use the Web Primarily to Gather Information, According to The
 2001 Auto Buying Survey Conducted by Consumer Reports New Car Price Service

    YONKERS, N.Y., May 1 In the second annual Consumer Reports
Auto Buying Survey, 64% of a nationally representative sample of recent car
buyers and leasers said they would use the web either to make a car purchase
or obtain a local dealer referral -- up from 41% in last year's survey.  And
although only 1.5% had bought their vehicles online, an additional 3.6% had
tried to buy online.
    Among web site users surveyed, 70% used the Internet to research prices;
60% researched car specifications; 43% looked up available models; and 42%
researched options/trim lines.
    "Car buying and the web make a potentially unbeatable combination," says
Paige Amidon, Chief Marketing Officer of New Media and Consumer Reports Car
Price Services.  "Users are finding a lot of very good information with a few
clicks of the mouse.  We think online car buying will continue to increase.
But for now, there are problems.  According to our survey, twice as many
people tried unsuccessfully to buy online as were able to complete the
transaction.  That tells us that web auto merchants haven't put all the pieces
together so consumers can comfortably complete a car purchase online."
     Other online car-buying trends from the Survey:

     * 27% of respondents said they would consider using the web to buy or
       lease a vehicle and have it delivered; 45% would use the Internet to
       get a referral to a dealer.

     * 29% said they would investigate buying and leasing options available
       through the Internet the next time they purchased a vehicle.

     * 43% of respondents consulted manufacturer web sites before selecting a
       vehicle, making automaker sites the third most frequently-consulted
       information source (prior experience with make and dealers/auto
       salespeople were the first and second most frequently consulted
       sources of information) -- up from seventh place last year.  30%
       visited other online auto sites.

     * Last year, about three out of five respondents said they would not use
       the web either to buy or get a dealer referral.  This year the figure
       was down below half (46%).

     * 8% found a dealer from recommendations by auto-related Internet sites.

     * Four out of five respondents currently have access to the web.

     * The main reasons respondents would not consider using the web to buy a
       vehicle and have it delivered:

       -- 68% prefer to test drive the car.  More than 80% of the respondents
          test-drove the vehicle before selecting it.

       -- 67% prefer to establish a relationship with the dealer that they are
          going to use for service.

       -- 42% were concerned about online security and privacy of financial
          information.

       -- 26% don't think that Internet buying is the way to get the best
          deal.

    The second Annual Survey, completed in January 2001, is based on
1,001 responses.  It is conducted on behalf of Consumer Reports Auto Price
Services, Consumer Reports magazine, and Special Publications in order to
track issues that are important to the car-buying public and to find out how
car buyers use the web -- now and in the future.
    "It's a lot for a person to spend thousands of dollars on a car they
haven't seen, test driven, or kicked the tires," says Amidon.  "We know from
past studies that not all dealers contacted online get back to the customer in
a timely fashion -- or at all.  And at some dealer-referral sites, they don't
have the exact model or they have the model but it's not equipped with the
right specifications.
    "And online shoppers can't always find the lowest price through the web,"
Amidon notes.  "To negotiate the best deal, you need to know the actual dealer
cost, including current national rebates as well as the behind-the-scenes
financial incentives that manufacturers give to dealers to increase sales of
particular models.  And then there are dealer holdbacks, the reimbursements
from manufacturers to dealers that typically amount to about two to three
percent of a car's invoice price.  We know that the median price for a new car
is $25,500, according to our Survey.  You have to shop around to get the best
deal -- and you may not find it on the web."
    Visit http://www.ConsumerReports.org, click on the New Car Price Service
link, and you'll find information on Consumer Reports Wholesale Price with
actual figures that show the greatest potential savings for some popular
vehicles.  Using Consumer Reports Wholesale Price, car buyers have saved, on
average, $2,200.  In addition, Consumer Reports New Car Price Service tool kit
provides buying and leasing advice, expert recommendations on options and
equipment for a car, a list of recommended alternate models, and Consumer
Reports' unparalleled performance and reliability data.
    To order a price report for a specific model by fax or mail from the
Consumer Reports New Car Price Service, call -- toll free -- 800-395-4400, or
order and view your reports at http://www.ConsumerReports.org.  Reports for
currently sold automobiles cost $12 for one vehicle and $10 for each
additional vehicle requested.

    Consumer Reports(R) is published by Consumers Union, an independent,
nonprofit testing and information-gathering organization, serving only the
consumer.  We are a comprehensive source of unbiased advice about products and
services, personal finance, health, nutrition, and other consumer concerns.
Since 1936, our mission has been to test products, inform the public, and
protect consumers.

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