While the downturn in the auto market has brought challenges for those trying to get rid of a used car -- particularly fuel-inefficient vehicles -- the Web can broaden the market of buyers, who are finding great bargains online.
Summer months are particularly good for auto deals, as many dealers are trying to get inventory off the lots. (One recent eBay (EBAY) listing for an "exceptionally clean" 2004 Toyota (TM) 4Runner SUV says the reserve price is "thousands below the current book value" because the vehicle "must sell.")
Auto makers and dealerships are desperate to move cars off the lot, and grasping onto any opportunity to reach a broader audience. Lexus, GM (GM) and Chrysler recently teamed up with eBay Motors to launch a digital showroom of certified used vehicles to take advantage of the millions of users trolling the auction site for a new set of wheels.
As eBay CFO Robert Swan noted in a recent conference call, although lower selling prices are hurting eBay's sales volumes, "the good news is, buyers are getting better deals."
There is one passenger vehicle sold every minute, a part or accessory sold every second on eBay, according to The Pocket Idiot's Guide to eBay Motors, providing liquidity and bargains in a tough economic climate. Consumers can take advantage of the opportunities without getting burned, by following a few tips.
1. The closer, the better: While the Web opens up the horizons for sales across state borders and country borders alike, there are added risks the further you wander from home. You won't be able to see the car in person, test drive it, or have a trusted mechanic inspect it for you. While it's common to ship a vehicle cross country, there are also added risks that the item may be damaged in transit. Idiot's Guide warns against using overseas sellers, even if they offer free shipping.
2. Know the vehicle and the seller: If you are too far from the seller to check out the vehicle yourself, ask for a certified inspection and get a vehicle history report from CARFAX or AutoCheck. Check the seller's profile and feedback, and be wary of anyone who has positive ratings below 95% or so, or ratings below three stars in any one category. Be wary of sellers who have little or no feedback, as well as those who only have feedback on cheap items unrelated to autos. Idiot's Guide also suggests staying away from those who recently registered, recently changed their user IDs or are registered outside of the U.S. or Canada. Verify contact information before purchasing any vehicle to ensure that you're buying from a trusted source.
3. Question the price and the payment method: The Web should provide for competitive pricing and transparency, but that's not always the case. Some sellers will hype up a lemon or hide "document" or "processing" fees in the fine print. Check the Kelley Blue Book value of the car and the selling prices of similar vehicles that have recently been purchased online. Also factor in the shipping cost and taxes, and if you decide to bid on or purchase the auto, get it insured before it is shipped. Idiot's Guide warns against using money-transfer services like Western Union (WU) or Money Gram (MGI), or finding a vehicle on eBay, then negotiating the purchase outside the site, because those tactics are more vulnerable to - and less protected against - fraud.
1. Market your product: Use a vehicle history report to include as much information about the car as possible in a neat, concise way. Use language and photographs that emphasize the attractive qualities of the vehicle, while being upfront about the flaws -- whether nicks and scratches or a blown transmission. Presentation is key, but consumers respect honesty as well.
2. Market yourself: Make sure all your contact information is up to date and create a profile that highlights your good qualities. Respond to buyer queries as quickly as possible, using polite, professional, grammatically correct language. If you're new to eBay, sell some other items first to get feedback before jumping into a big-ticket item like a car. Nothing bolsters credibility like other buyers touting your honesty and responsiveness.
3. Price competitively: You might think the 2001 Honda (HMC) Accord that you've maintained meticulously and improved upon with tinted windows, rims and a spoiler is worth a million bucks, but buyers will likely think otherwise. Use other Web listings as a guide for your reserve bid. It's also important to keep in mind that there is more product out there than demand, so even recent guidebooks from Kelley Blue Book and NADA might be out of date. And remember, that trying to boost the price by overcharging for shipping or hiding fees in the fine print might turn potential customers away.