GM Cleans Out Closet, Will Sell New Cars On eBay
GM just realized that the downstairs hall closet is a freakin' mess. Mom went down there and saw all these, like, Pontiacs and stuff in there and now everyone is in trouble for letting it get this bad. The solution? An eBay store!
Starting tomorrow, GM will list up to 20,000 vehicles on the on-line auction house for your bidding pleasure. Initially, the test will only include dealerships in California, but if the program gets a A+++++++++++++++!!!!! you can expect a nationwide roll-out.
"Together with eBay Motors, GM and our dealers are reinventing the car-buying experience for our California customers," Mark LaNeve, G.M.'s vice president for U.S. sales, said in a statement. "As the dealer showroom expands from the parking lot to the laptop, this makes it easier for a customer to browse available new-car inventory, make an offer, buy it now, or send a message asking for more information from a dealer - all at the customer's convenience."
G.M. Sees eBay as a Way to Reach New Buyers [NYT]
GM Finalizes Pilot Plan To Sell New Vehicles On EBay [WSJ]
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Comments:
GM is also hiring a bee keeper and insect wrangler in order to invalidate sales in the case of a auction mistake.
KILLER BEEEES!!
Now if I can get one for a under $50 on eBay, I would consider it. However it would still have the downside of it being a GM.
The negative feedback comments should be an interesting read.
@pecan 3.14159265: I agree. Similar to the way people can build their own computer on HP's web site, GM should try to offer some customization. Of course they won't be built to order, but at least tell us exactly where to find that car with those options.
@pecan 3.14159265: I think this was always the most frustrating thing about buying a car. They have all these options out there, but what you actually end up with is based on what the dealerships in your area ordered. So you either ended up with a car with features you didn't need to get the ones you want, or gave up on something to cut costs.
I'm not thrilled about the prospect of buying a car off e-bay, and this is why:
The minimum you will be able to pay is the minimum profit they're willing to take from a majority of customers.
When I buy a car, I like to make dealerships squirm to get my business, and to offer me less than they would like. They still make a profit, just not a big one (after all, most of their revenue comes from kick backs from the finance company, so i don't care if they break even or take a loss).
LQQK!!! NEVER DRIVEN 2008 Pontiac Vibe! All Features AC A/C Air Conditioning Fully Auto Automatic! $AVE! N/R or BIN /w FREE SHIP!!!
Correct me if I am wrong, but I was under the impression that car makers were not allowed to sell their own products unless through a dealership? If that is the case (and really dumb, might I add), does that mean Ebay counts as a dealer, or do they just act as the market place and GM is the dealer?
I have a feeling they'll forget to put a minimum ending bid on at least one of the vehicles and someone will win some pontiac for $500 then GM won't follow through and we'll have some more stories about it here on consumerist.
Yes, but does it ship free?
Given that the average owner/purchaser of a Buick is 68 years old, more like "LOL, Buick!"
@zentex: It was a great one. It's one like those that you use as examples when explaining Consumerist to people.
@pecan 3.14159265: Well, I can imagine this being something like being able to browse all car lots with X miles of your ZIP code simultaneously. Your local Chevy dealer might not have the car you want in the color you want, but some other Chevy dealer in the next town might, and if so, you can put dibs on it.
If this is what this all means, I see great things happening. I wonder, though, how much GM is paying eBay for the privilege of using its interface instead of developing their own.
@pecan 3.14159265:
You can go to GM's web site and "Build Your Own" and after your done building it you can search for matches at local dealers. Been doing it for years whenever I get the new car bug, then I look at the price and that makes the itch go away for a few months. Most of the time.
I'll second Pecan's sentiment above. The car buying process is generally a bad experience for the customer -- haggling with a salesman for hours and waiting while he goes to the back to "talk to his manager". The whole process is antiquated and overly difficult, largely by design. They need to make vehicles easier to buy, not easy as in easy credit, but as in a smooth, quick, painless buying experience. eBay may be a step in the right direction, but there really is no reason why you can't go to gm.com, use a "configurator" to design your model, order it, and have it shipped to your local dealership (or even your doorstep). You should be able to buy a car like you buy a computer, straight from the manufacturer to the consumer.
California cars, eh? I wonder if they will accept CA-issued IOUs as payment.
@Sudonum: The biggest problem with having an online store is that everyone haggles and negotiates. It's part of the process. Haggling isn't as effective as the internet, so I understand why they're looking at eBay to auction cars - it's essentially haggling.
What I'd like out of a GM online store is the functionality of building your own vehicle, finding one nearby at a dealership, but then being able to bid on that specific vehicle via eBay or GM's own site. I'd like to enter a round of bidding with that dealership for that car, but not actually have to set foot inside. They can counter offer, try to sell their warranties and such, and through the magic of internet, i can refuse their offers, offer one of my own, etc.
... But how will they get all those cars shipped to Nigeria?!?!?!
And this is why GM has been in a downward spiral for the last 30 years. Ebay is going to take a large chunk of their profit since you go to pick up your car at a local dealership and they take a chunk out too. Worst idea ever.
Why not just regulate your dealerships more? When I recently bought a Honda Accord, I got a call asking to take an online survey of my purchasing experience.
The survey provided a list of all the dealerships in my zipcode and I selected all the ones I visited. Then it asked me to rate my experience at each one on attributes ranging from cleanliness/presentation to service,etc. Finally it asked why I did or did not make a purchase at each dealership.
@valkyrievf2x: Neither GM, nor EBay is the dealer, the sale will be completed by a dealer off-line. You are agreeing to buy the car from a dealer.
You are correct, GM cannot directly sell you a car.
@longboarder543: You may not be able to do it online, but with most car dealers you can walk into the showroom and custom order a car with all the options you want, give them a down payment and two to three months later the car will arrive, direct from the factory.
Just wait until GM dealers discover that half their auction winners plan on paying by sending a cashier's check in excess of the amount of the purchase price, and would like the rest of the money wired to them and their new Buick Enclave shipped to Nigeria.
A big chunk of the other half will win and never pay.
@Veeber:
...I don't get it when I see statements like this.
I have bought 4 new vechicles in my life...2 of them were custom-ordered and built exactly to my specification. It was no big deal...I built up the list of options and such that I wanted on my truck, went to the dealership, negotiated a price, and a month or so later picked up my new truck. Which cutely even had a "Made especially for [my name]" note on the window sticker.
...the other 2 I bought off the lot, on the pure happenstance that the dealer happened to have exactly what I wanted already sitting there. Serendipity.
I think a lot of Nigerian Princes are going to want to buy GM now.
With all the crap and fees that Ebay tacks onto the purchase (not to mention pay pal), is there really even worth it? Having blowout sales at the dealerships sounds like the smarter idea.
The absolute worst part about buying a new car is having to work with car dealers. I am disappointed that they haven't figured this out.
Outstanding way to add another layer of misery between themselves and customers. Bang up job!
Sad. they once owned and still contract with EDS, yet they outsource sales to failbay.
@shepd: My agent will send you a money order for this car. Please deduct the appropriate amount and wire the rest to Prince Mobuntu, Nigeria.
@YouDidWhatNow?: I do the same thing. I knew exactly what I wanted when I was searching for a car, and I knew what options I did not want (or did not want to pay for). In 1 case, the dealer had the exact car on the lot, in another case, the dealer was able to locate a vehicle 200 miles away, and was willing to work out a trade in vehicles with the other dealership, and in 2 cases, I placed a custom order. The only time when I can see a need to "settle" for something on the lot is if my vehicle just died and I needed something ASAP and could not wait the 3-6 weeks for the vehicle to be delivered.
As I love all of the high end gizmos (GPS, Power everything), but HATE leather seats, I almost always have to custom order because most buyers either want the barebones stripped down with cloth seats, or they upgrade to leather seats and one or more option packages.
@longboarder543: The key is to come prepared. Before you vistit a dealership, visit KBB.com or edmonds.com and configure your desired vehicle(s). Both sites will give you a sticker price, the dealer invoice, and a price that the average consumer pays for the car and the options. Also do some research on the kickbacks and holdbacks that the dealer gets from the manufacturer. Take this information with you to the dealer, but don't pull it out until you start price negotiations.
Let the dealer do his walkthru of the vehicle, and do your test drive. Go back to the office and let them make the first offer. Then whip out your research, and tell them the bare minimum price that you will be willing to accept, and tell them the profit that they will see for their "trouble", making sure to specify where they will be getting the profit from. Tell your salesman that if they can't meet your one and only offer then you will take your business elsewhere. When they come back with an offer higher than your offer get up and walk out. 9 times out of 10 the manager will stop you before you hit the door and give you the offer that you want. Negotiations and BS done in 20 minutes.
If you are custom ordering a car, you can really freak them out by telling them the manufacturer codes for the options and packages that you want, as well as the invoice and sticker prices.
@FormerlyAnonymous: The price will be set before you talk to the dealer in this situation. It is simply against the law for Makers to sell cars directly
@pecan 3.14159265:
IF they roll it out to the whole country, and IF you go to the GM web site, build your car and IF you find that car at a dealer participating the the e-bay/GM program, I'm sure you can do exactly that.
I recently bought a Certified Used Chevy truck. While in the shopping process I visited e-bay to see what was available and research what dealers "buy-it-now" prices were. I didn't consider using "buy-it-now" but at least it gave me an idea of where the dealer wanted to be, and if I saw one dealer was particularly cheap on a model, then I figured other dealers could probably also go that cheap. It gave me a pretty good base line, especially when combined with research on other car sites like Edmunds.
I wound up buying a the truck from a dealer in IL, near STL (I live in LA). It was a deal similar to one I walked away from a couple months earlier. I went for it this time (Early June) because I thought that with GM exiting BK and Cash for Clunkers on the horizon, car prices were about a low as they would go.
From the customer's perspective, this could be useful even if you don't want to buy on eBay. You can search completed auctions and see what others are paying for the same car you're looking for, and you can use that information when you negotiate with the dealer.
Yes, there are GM cars that are worth buying.
@Rachacha:
...I am with you on the leather seat thing. There is something about leather seats that baffles me...cloth is way more comfortable, especially on excrutiatingly hot days (esp. if in shorts) or cold days. On perfect 75-degree days I guess it doesn't matter. But seriously...I would never order leather seats for my own vehicle, even though I spend several thousand dollars on wacky stereo equipment in each new truck I buy...
@pecan 3.14159265:
@YouDidWhatNow? - Try cleaning a soda that your child has spilled into a cloth seat that you don't discover until 2-3 hours later, when it's had plenty of time to soak into the seat cushion. Then you'll see the benefit of leather.
Point taken, says the child-less one. Vinyl instead of leather and save the $?
...anyway, I thought you were just supposed to through the kids into the bed of the pickup truck anyway, along with your dog and that roadkill deer that looks pretty fresh...
@Deezul_AwT: I have kids, and that is what scotch guard and dark fabric are for. My wife wanted light colored fabric in her car, and she is now regretting it as the kids (even without soda) manage to get the seats filthy. On my car that has darker fabric, it is not noticable. Periodic cleaning and shampooing takes care of most of it. Place a protective pad under the car seats and a towel or seatback organizer in the back and your clean-up is minimal.
@HurtsSoGood: Duly noted. I should have said "The car finance company formerly known as GMAC is going to be pi$$ed."
@pecan 3.14159265: It's my understanding that the Dealer networks lobbied the government to create a law banning manufacturers from selling cars anywhere but to the dealers.
Although I agree, if manufacturers could sell online directly, that would be a step forward.
This is just my way of saying that the manufacturer (such as GM that everyone loves to hate) isn't always in itself evil. The dealers are far worse in my opinion.
Maybe I'm missing something here, but how does the financing get worked out? I imagine many people do not have $20k cash to paypal to GM. If you buy a car on e-bay, but then cannot work out favorable financing, what happens?
Selling using eBay is at once gimmicky and ingenious, because so many people understand and use eBay. But I'd like to customize my car, select trim levels and packages, take out one thing and add another - I think if GM opened its own online store where you could customize a car, get a quote, and then be given a list (if there was one) of cars with the same or similar options put on auction at eBay, then it would be a good idea. Then you could choose to buy the car from the dealer with the options you picked out, or evaluate eBay to see whether there was a better deal, or something you could go without or take in exchange for a better price.