CARCHEX in the News

Internet Company Rolls Out Program To Shop For Cars On Behalf Of Consumers

Original Story from Charleston, SC

It's a predicament that befalls more than a few people interested in owning a car. They're ready to make the move. But they just aren't too keen about the whole shopping experience, dealing with salespeople, negotiating over price and sweating over whether they're getting a raw deal.

A certain percentage of consumers bite the bullet and visit a dealership or any number of outlets to comparison-shop. Some come away with pleasant experiences, either because the sales approach was low-key or they enjoy the give-and-take of determining a purchase price.

Then there are customers such as Sandi Flood. "I absolutely, positively hate the process of going into the dealer and buy a car," said Flood, who moved from Kansas to Murrells Inlet, south of Myrtle Beach, last fall. "It's hours of your time that doesn't always end up with a deal."

But her eight-year-old Toyota Camry was in need of a trade, and she acknowledged being "too stubborn for my husband to do it."

So Flood, like many consumers these days, went online. Within a short time, she found a national company that recently started a "car buying concierge service." Shoppers electronically transmit information on where they live, what car they want and a suggested price. Then, after receiving a purchase agreement, company representatives scout out the desired car at the recommended price.

Flood said she signed paperwork the week of April 21 to give a Carchex buyer the go-ahead. She kept asking about fees and such, but was told the venture makes its money via the dealerships. By May 6, she had a burgundy 2009 Toyota Camry parked in the driveway. It came from a Myrtle Beach area Toyota outlet and cost $21,600, no fees included.

She's pleased with the outcome. "I never thought there were different options available. It was wonderful," Flood said. "I've told a half-dozen people. It cost a few phone calls" talking to customer service representatives, she said, but that's about all.

The company that Flood stumbled onto is Carchex, a seven-year-old venture based in Maryland that got its start inspecting cars for customers before they were ready to purchase them.

According to the business' Web site, one of those early consumers was Jason Goldsmith, a Baltimore investor.

In 2003, he was looking to acquire a 1996 Jaguar XJS V12 convertible and, via eBay, believed he had seen "the perfect car" at a dealership in Portland, Ore. He wanted to make sure the car was in tiptop shape but wasn't ready to travel cross-country to check it out himself. Carchex came up in another online search, and he was able to get results in a day.

As it turned out, the car had been in an accident and was repainted several times. Impressed with the service, Goldsmith eventually bought Carchex and is now the chief executive.

Carchex has expanded services since then, rolling out the car-buying concierge program less than a year ago. "We have car-buying experts at the sales center," he said.

Goldsmith said the company developed the new service for two reasons. First, it helps people such as Flood who cringe at high-pressure, stress-filled car shopping, whether or not that's an accurate perception.

"When they got to the dealership, people don't like the haggling. It's kind of frustrating," he said.

Also, shoppers are savvier today. Many potential car buyers have done their homework and know exactly what they want, from models to options, and even what's a fair price.

To launch the concierge service, Carchex has lined up dozens of dealerships nationwide that have agreed to participate in the program. They benefit because the online company can provide a ready supply of customers. Dealerships pay a $300 flat fee for each car they sell via Carchex.

Goldsmith said customers, in turn, don't pay any fees. The one charge is $50 on their credit card if they sign a purchase agreement and set up an appointment, typically by phone, with the Carchex representative who is going to find a car for them. That fee is waived if the consumer goes through with the appointment.

"Our program is for people who are ready to buy," Goldsmith said, "but don't want to haggle."

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