This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

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.

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.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs