The New Way to Buy a Car

Anybody who bought a car before the turn of the century probably remembers that special spot in the library.

You know the one, usually on the ground floor near the entrance, where the racks of Kelley Blue Books were kept. Like porch lights to moths, those well-thumbed tomes would pull in prospective car buyers in swarms, each of us looking for the informational edge that would make all the difference in what would be one of the most important purchases in our lives.

Well, for about a generation now, that secret spot has been accessible to pretty much anyone with internet access. Now, potentially every car buyer out there is as informationally equipped as the kind of obsessive who back in the day took time off work to research before trekking over to the dealership.

"Everybody knows that the internet makes everybody an expert at pretty much everything, right?” says Mitch Solomon, host of Doing Donuts, the car culture and design podcast out of Art Center Design College in Pasadena. “One thing we know for sure—and this is true whether you are buying a new car or selling Mars Attacks toys—is the actual value of the item. That is a fundamental change from the past and it does change to a degree—though not as much as you might think—the interactive back-and-forth between car buyer and car seller.”

Adds Solomon, “There are some things that never change, and some things that do.”

Informational Upper Hand

What has changed? For starters, that wealth of information has shifted the balance of power to the other side of the dealership desk.

“If a buyer or shopper is motivated, they can get information on a very, very granular level about vehicles,” explains Eric Noble, founder of the automotive consulting firm The Carlab, professor at Art Center Design College, and co-host of Doing Donuts. “Informationally, the buyer has the upper hand.”

And with negotiations for features and pricing also done online now—at Scion and AutoNation, for instance—it’s much easier for a consumer to come prepared to the showroom, or to avoid negotiating in person altogether.

Cat and Mouse

That advantage is less clear, says Noble, during the transaction itself, which is almost always done in the real dealership and not a “virtual” one, the same dealer floors that dominated car buying in the pre-internet days.

“It is kind of like asking whether radar detectors have given speeders the upper hand against police or are they just escalating the arms race?” asks Noble. “Yes, buyers know invoice now, but they don’t know the marketing allowance, or whether there is a program where the dealer is incentivized to sell a tenth unit that month. That part is still very much cat and mouse.”

To that end, many of the old axioms that could apply to the old days of car buying—buy at the end of the month rather than the beginning, for example—still apply.

Where You Live = What You Drive

The information age has had a profound effect on brand loyalty. The days of being a Buick family or a Toyota family are in the past.

“The consumer has so much information now, and brands had always been a surrogate for information,” says Noble. “When information exists, the importance of brand diminishes.”

However, in the social age that we live in, regional biases play a huge part in which new cars people chose to buy. You can expect certain cars, and perhaps dealer incentives, to be more plentiful in certain parts of the country. Think Audis in the Bay Area, Subarus in the Northeast, or the abundance of Fiat 500s in Los Angeles.

“Societal sensibilities have taken the place of brand loyalty,” says Noble. “If I am a San-Jose-type person in the market for a luxury car, I am going to gravitate towards a Tesla over a Mercedes Benz, because that is what a San Jose type of person does. It’s more [about] societal expectations.”

The Cloud is Coming

The vast world of data science—tapping into the limitless consumer information that exists in the Cloud—is the next threshold to cross in the world of buying new cars in a truly modern way. When it finally arrives, it may make the way we buy cars now seem as quaint as the little spot in the library seemed not so long ago.

“One thing that hasn’t happened yet, but will at some point, is that the Cloud will start to work for us,” says Noble. “It hasn’t completely entered the conversation for consumers, the way it has, say, in the way we commute, with maps like Waze. On the major sites, you’re getting closer to that. They have begun to aggregate real time transactions. The hold up is figuring out how to communicate and generate that. But we are moving closer to that everyday.”

Kelley Blue Book is your all-purpose resource for your new car journey. Visit KBB.com to get New Car Smart.