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More Bad News for Dot Coms:

23 March 2000

More Bad News for Dot Coms:

Online Auto Pricing Horribly Misleading According to New National Study; Many
      Sites Allow Shoppers to Build Vehicles Automakers Couldn't Deliver


    BANDON, Ore., March 22 In the wake of Consumer Reports
saying the best way to buy a new vehicle may not be on line, a new study
indicates automotive price misinformation on the Web by some of the country's
best known names is rampant, misstating actual prices by upwards of thousands
of dollars.
    The national study, conducted by CNW Marketing/Research, measured what
eight different web sites claimed were the MSRP and Dealer Invoice prices for
86 different models against actual manufacturer data.

    The sites included:
    AutoWeb.com
    CarPrices.com
    CarsDirect.com
    ChromeData (through Vehix.com)
    Edmunds.com
    IntelliChoice.com
    Kelley Blue Book (KBB.com)
    MSN CarPoint.com

    Of these online new-vehicle pricing sites ChromeData was clearly the most
accurate followed by IntelliChoice and Kelley Blue Book. The provider of the
most inaccurate online pricing at the time the study was conducted and among
these eight companies was CarPrices.com.
    On a dollar-per-model basis, ChromeData missed the actual price mark by an
average of only $84 per unit while CarPrices was least accurate with an
average $888 per-unit inaccuracy.

    Reported vs. Actual MSRPs
    Average Misstatement of Price
    CarPrices         $888
    ChromeData         $84
    Edmunds           $570
    IntelliChoice     $140
    CarsDirect        $461
    AutoWeb           $580
    Kelley Blue Book  $324
    CarPoint          $505

    Considering that nearly 40 percent of new-car buyers use the Internet as
part of their shopping process, such misinformation is horribly misleading,
the study concludes.
    Equally frustrating was the ability to configure cars and options that
automakers couldn't actually deliver.
    Some examples of this misleading online price and configuration
information:

    -- On a Lexus LS400 with six options selected, each of the online sites
       except CarsDirect missed the actual MSRP mark. Discrepancies ranged
       from ChromeData's $127 to CarPrices' $2,696.
    -- Identically configured Porsche Boxster S dealer-invoice prices ranging
       from $55,369 to $64,155 with MSRPs varying from $64,182 to $76,229.
    -- ChromeData correctly included 8-way power driver's seat adjuster in a
       Quick Order Package on the Ram pickup while most of the other services
       did not. Others allowed the option to be added for a $360 charge.
    -- AutoWeb included a 360 cid engine as standard equipment on the Ram 1500
       (a $595 option on the other sites).
    -- CarPrices.com listed one model's dealer invoice price $367 lower and
       sticker price $410 less than the other services or the actual
       manufacturer MSRP. There was no apparent reason for this misstatement.
    -- Special Ram pickup paint and the $225 charge were not available on the
       CarsDirect or AutoWeb sites.
    -- Edmunds didn't charge for the Up Country suspension package on the
       Grand Cherokee Laredo -- a $575 option.
    -- Destination charges for the Mercedes C43 were listed as $595 by
       ChromeData and AutoWeb rather than the actual figure of $645.
    -- Kelley Blue Book improperly allowed a handling package to be added to
       the Ford Crown Victoria outfitted with the natural gas engine option.
       Adding this option caused at least a $935 discrepancy.
    -- On the Mercury Grand Marquis LS, Kelley allowed the addition of
       teardrop aluminum wheels (option 64R, costing $320) even though the
       $855 handling package already includes these wheels.
    -- In some instances, although rare, CarPrices.com would automatically
       total the options incorrectly.
    -- CarsDirect frequently identified dealer- or port-installed options as
       "Not Listed" which frequently caused the MSRP and Dealer Invoice prices
       to be far off of the mark.
    -- In some instances, sites were slow to add information that is readily
       available. For example, AutoWeb said the dealer cost for Cadillac
       DeVille's integrated telephone was "To Be Announced" even though all of
       the other sites provided this information.
    -- CarPoint's automatic calculation allowed CNW M/R to add polished
       aluminum wheels (option PW7 costing $500) to a Camaro even though
       Chevrolet ended availability of those wheels on October 22, 1999. (The
       study was conducted in late February.)
    -- ChromeData failed to require QIZ tires ($225) with the Z85 suspension
       package ($85).
    -- CarsDirect didn't have the Yukon XL listed. Instead it provided
       information on only the older version Suburban.

    Conclusion:  Some online pricing services simply cannot be trusted to
provide accurate new-vehicle configurations or prices.