RANCHO CUCAMONGA, Calif. - Haggling with car dealers for the best price on a vehicle is many consumers worst nightmare. So the growth of Internet companies offering to step in to do the dirty work has been welcome news for car buyers. Their relief may be short-lived though since three of the major automakers put the brakes on car dealers doing business with Net brokers. Earlier this month, Daimler-Chrysler AG joined General Motors Corp. and Ford Motor Co. in warning its dealers not to do business with Internet brokers offering to sell cars directly to consumers. Ford was the first company, issuing its letter March 24. GM sent its letter in early May and DaimlerChryler's went out later in the month. According to the newswire, Ford and GM's letters focused on the same points: both encourage dealers to use the Internet through referral services and their own Internet sites. But they remind dealers that they can sell new vehicles only to consumers, not to brokers looking to resell vehicles. The jury is still out on just what effect the automakers' policy will have on consumers' car buying habits. Tony Boutelle, CEO, CU Direct Corp. doesn't anticipate it will put much of a dent on CU members' car buying behavior or credit unions' auto loan portfolios because "the auto manufacturers have had this franchise agreement with the brokers for years, they've just never enforced it." Boutelle admits that in the past-a.k.a. pre-Internet days-brokers who did business the old-fashioned way were not considered to be much of a threat to the dealers. The Internet has changed that. Last month, CU Direct Corp. launched a new, interactive Web site that credit union members can use to build a vehicle online and have the specifications sent to three dealerships for a price quote and availability check. The site, at www.cudirect.com, also includes a link to the new and used car pricing guide sections of the Kelley Blue Blook Web site; a link to Carfax where members can get the history of a used vehicle they plan to purchase; a loan payment calculator; and information on how to research a vehicle. Rather than CU Direct being targeted by the automakers, Boutelle said they probably wish on-line car brokers would model their Web site after CU Direct's site because it refers members to car dealers, rather than competes with them. It's still to be determined to what lengths the automakers will go to enforce their order. So far they've only talked tough and threatened severe penalties for dealers that use brokers, including cuts in dealer incentives and vehicle supply. "If I were one of the on-line car brokers affected, I'd be asking the car manufacturers `How come after all these years of having the policy on your books have you suddenly decided to enforce it now?'," he said. -
ekingoff@cutimes.com
