Troubled car giant General Motors is starting an experiment today, becoming the first manufacturer to sell new cars on auction site eBay. But before you get ready to bid $2 for a Chevy Camaro, however, note two big caveats: There are no true auctions or bidding (“Buy It Now” is the only option listed), and for now, cars are only being sold by dealers in California.
As the AP reported yesterday:
Car buyers will be able to choose between the two standard options currently offered on eBay Motors: Negotiating a price with a dealer through the site or purchasing right then at a fixed price. Cars will be picked up at the dealerships.
The NY Times states how the program works a little more clearly:
Unlike a typical eBay sale, vehicles will not be auctioned to the highest bidder but rather listed at a “buy it now” price equal to G.M.’s supplier price. Shoppers also can submit a lower offer that the dealer can accept or reject.
My question is: Don’t most car dealers—GM or otherwise—basically do something very similar to this already? You submit the kind of car you want at CarsDirect or other services, and multiple dealers will contact you via e-mail with their offers—what boil down to “Buy It Now” prices. You can then negotiate via e-mail (or over the phone or in-person, if you prefer). I’m not sure why getting eBay involved is all that groundbreaking.
The bigger question is: Just how good will the “Buy It Now” prices listed on eBay be? From the Washington Post:
“Buy it now” prices will be less than the sticker price, a company spokesman said, but they will be set individually by the dealers.
One key to the program’s success may be whether consumers come to believe that the “buy it now” price is as good as the one they could get by negotiating face-to-face at the dealership. If not, consumers will skip the Internet to try to strike a bargain at the dealership.
There’s no way involving eBay will put a total end to annoying negotiations and haggling over prices. I can’t imagine GM dealers offering up their very lowest prices for everyone to see online. Why would they? All those extras that salesmen try to push, including extended warrantees and whatnot, won’t be going away either. Perhaps the online back-and-forth will go more smoothly via gm.ebay.com, but it’s hard to tell right now.
A quote in the Times from one GM car dealer staffer sounds rather desperate—an old-school auto vet trying to be hip and figure out what those crazy kids are into nowadays:
“For so many people, especially the younger generation, this is the way they like to do things,” said Scott McAllister, the controller at Mike Daugherty Chevrolet in Sacramento, Calif. “It gives us another avenue to somehow reach people.”
Look out for cars being sold via Twitter any day now.