“In December we had bad weather and my car was totaled. I needed to find a replacement and checked out Edmunds on the net. Of course, the first thing I did was look up my old car to “baseline” my buying decision. When I got there, I found an ad from auto-by-tel that offered to find me a car at a competitive price. I clicked the ad, searched for my old make and model, and found a deal (basically 1/2 the miles, 50K versus 95K, at a 10% premium over my insurance payment for the totaled car). I received a call from the dealer that night and my wife and I drove an hour-and-a-half to look at it (the dealer’s benefit from using the Internet) and bought it on the spot. I asked the dealer if most of his Internet customers were like me and he said yes. ‘They call ahead, drive in, and drive their new car home.’ It was an awesome haggle-free deal that I have recommended to friends.” -Andrew Beauchamp

Couldn’t have said it better myself . . . except that I typically buy used cars, not new.

I wonder whether this phenomenon – the better car price with less hassle via the Internet – is reflected in the calculation of the Consumer Price Index. Well, it’s not. But over the years, Internet shopping will definitely be sharpening competition, cutting out middle-persons, and bringing down the prices actually paid.


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