This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

By Taking Fewer Test Drives, Car Buyers Steer Themselves Wrong

NEW YORK (BankingMyWay) -- Car shopping used to go something like this: For three or four weekends, maybe more, you trudged from dealership to dealership, trying this model and that, listening to sales pitch after sales pitch, reconsidering your budget, coming close to a decision and then wavering ... and finally, when you just couldn't take it any more or you fell in love, picked a car and drove it home.

Not anymore. At least, not quite. Armed with data gleaned from the Internet, many now make quick work of car shopping, often completing the process in just a few hours. But are car shoppers short-changing themselves? That's possible -- especially for those buying used vehicles.

Some 16% of car shoppers do not take even a single test drive, while 33% drive just one car, according to a survey of 2,000 consumers by auto-marketing firm DMEautomotive. Sixty-eight percent visited no more than two dealerships, and 40% just one. A decade ago, the typical shopper visited five dealerships.

And it's not because car shoppers feel they can rely on sales people to steer them right, as only 21% described sales folks as trustworthy.

Must Read: How to Take Care of a Pet Financially (Including If You Die)

A key reason for the gradual shortening of the car-shopping process is the rise of the Internet. Buyers now read reviews, check prices and weigh alternatives before leaving home. Their minds are pretty much made up by the time they reach the dealership.

"This avoidance of physical dealerships is in stark contrast with how much online vehicle research is happening: four in five people now use the Internet for car buying, visiting 10 auto websites in the process," said Mary Sheridan, manager of research and analytics at DMEa.

Though not mentioned by DMEa, many car shoppers may feel the process is less risky than before because so many new vehicles come with extensive warranties.

But are shoppers short-changing themselves?

They must be happy with the results, or they'd return to old-fashioned tire kicking. So the real issue is whether they could be even happier if they looked around a bit more. Maybe a competing make and model would just feel better. A test drive might show that. Or it might reveal a subtle feature too insignificant to make the reviews but important to you, such as an awkward reach for the radio controls or a seat that's a tad too squishy or hard. Or maybe the model you've chosen just doesn't sound good.

So the key reason to visit dealerships is not to find the best deal after you've settled on make, model and features; it's to compare different manufacturers' offerings in the class you've chosen.

Used-car buyers take special risks when they skimp on test drives.

"Conventional wisdom is that used-car buyers at dealerships take significantly more test drives, as each vehicle is unique, but the DMEa study reveals that is not the case: 30% of used buyers test drove only one vehicle, versus 35% of new buyers, and a greater percentage of used buyers (18%) than new (14%) reported taking no test drives," DMEa said.

Because used-car warranties are not as good as those on new cars, the used-car buyer should be very careful. Not only is a test drive advisable; it probably makes sense to take the vehicle to a mechanic you trust. For a modest fee, often around $100, you can have the vehicle plugged into the diagnostic computer, put on the lift and inspected underneath, and driven by a pro who will hear and feel things you might not.

By the way, if you spot an appealing used car on the Internet, don't tell the dealer you are coming right over. Hard starts and many engine noises are most evident when a vehicle is cold, so you don't want the seller to warm it up before you get there.

Look at it this way: You have little to lose by going on a few more test drives, other than some time, and you could have a lot to gain if you find that the Honda's a bit more comfy than the Hyundai, the Ford a bit peppier than the Chevy.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.30 -0.92%
FB $118.08 0.55%
GOOG $695.81 0.50%
TSLA $234.96 1.10%
YHOO $35.97 -0.11%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs