Jeremiah 29:11

Dealers use Net to snag specialty car buyers

Richard Truett

Automotive News | February 4, 2008 - 12:01 am EST


Minutes after Chrysler LLC opened its order books for the new-era Dodge Challenger in early December, at least a dozen of the red-hot cars rumbled onto the eBay Motors Web site.

Bidders went nuts. They drove the price of the tire-shredding muscle car far beyond its $37,995 sticker. Many early buyers paid as much as $60,000 for the iconic car, reborn from the early 1970s.

The Challenger is the latest example of how savvy new-vehicle dealers use the Internet to maximize profits on sales of low-production, high-performance and specialty cars.

Before the Challenger, online buyers paid big premiums for the Audi R8 sports car, the Pontiac Solstice and Saturn Sky roadsters and various Ford Mustangs. And before that, Toyota's Prius hybrid was hot.

But a growing number of small dealerships in out-of-the-way markets are ordering specialty cars and offering them for sale on the Internet. Now that a greater selection is available to buyers with a few keystrokes, dealers are finding that it's getting tougher to rake in huge profits by selling on eBay.

Web-worthy
The most likely cars and trucks to sell at online auctions such as eBay are
-- Low-supply, high-demand vehicles
-- Vehicles with an outstanding feature, such as high fuel economy
-- Special-edition models
-- Vehicles in early production or at the end of a production run



Timing is everything

Recently, for example, 196 Shelby Mustangs were listed on eBay Motors — a virtual flood in the market for any rare car. Bidders kept their wallets in their pockets.

Among about 100 Shelby Mustangs that previously went through the eBay auction process, only nine Shelby GT500s sold. None brought more than a few thousand dollars over sticker price.

Challenger mania also has cooled, although the cars still are selling above sticker. You now can buy a Challenger for about $50,000.

Last month, Gene Evans Ford in suburban Atlanta listed a new white Shelby GT500 convertible on eBay for $59,405. The car's sticker price is $46,995.

The dealership received no bids for the car, but Brent Popdan, the dealership's Internet sales manager, wasn't disappointed. He said the eBay auction was a great advertising vehicle that let potential buyers know he has the GT500 in stock.

"People are shopping the Internet for the best deals," Popdan told Automotive News. He said he wishes he would have listed the car before "a bazillion" Shelby Mustangs became available online.

Don Pugh, Internet sales consultant at Superior Auto Mall in Siloam Springs, Ark., says none of the dealership's local customers called about the Challenger or placed their names on a waiting list when the car arrived in showrooms.

But the dealership ordered a Challenger anyway. Pugh listed the car on eBay for $54,485. Bidding had stalled at $50,115 when the auction ended, and the car did not sell.

That's the danger of playing the game: Dealers could end up with a car in inventory that they can't easily sell locally. As of mid-January, the Challenger remained in dealership inventory.

Factory hands-off

Automakers take a hands-off policy toward dealers' methods of selling sought-after specialty cars. Says General Motors spokeswoman Susan Garontakos, "It's the business of the dealer to do what he wants with the vehicle."

Ford Motor Co. does not prohibit its dealers from selling vehicles outside their markets, says spokeswoman Marisa Bradley. But the company requires dealers to sell directly to customers, not to brokers or other third-party buyers.

Dealers know their local markets can absorb only so many specialty cars, but offering them for sale on the Internet puts the cars before a worldwide audience. All it takes for the price of a specialty car to shoot into the st

MGDMike

They're just trying to make a buck.. can't blame them

tupperware

remained in dealership inventory??? yet another reason not to believe everything you read!!!

Rich Knapp

I't may be on paper they are getting one but I would like to know how by law they can sell something they don't have. I can understand posting they are getting one but thats like me selling my nabors car for 20k more than worth after sale going over and buying it from him. instant profit before taking posetion of property. They take the money put it in bank and draw intrest on your money while you don't have a car for 6-7 months. put money in bank yourself and get the intrest till they have car in hand and you can start driving it the day you pay for it. Yes the Chally is sweet but it is getting out of hand. They are playing the tree house effect sales on us. I am getting ready to say heck with it and just wait 4 years and get a used one seen as it will be my daily driver anyways.

freecarforum

these sorts of automotive news are really important. thanks for the update!

new cars

JJMPB

question i have is these cars that don't sell on ebay what does that cost the dealer in ebay fees ? i mean if there askin over 50 grand for a car and the aution stall out and it doesn't meet the reserve

tskatz

Ebay Motors is now using a flat listing fee for all vehicles I think.

Cuda340

The article is talking about the 2008 limited addition Challenger SRT. It is dated Feb. 8, 2008- one year ago.