Millions of Americans log onto eBay every day to find bargains on electronics, clothes, collectibles and various other odds and ends. Now a growing number of consumers are using the Internet auction house to shop for cars, and Minnesota auto dealers are getting in on the action.
A car is sold on eBay Motors every minute -- twice the rate of a year ago. Locally, more than 85,000 vehicles have been sold on the site since 2000.
Some of the Twin Cities' top dealers, including Minnetonka-based Morrie's Automotive Group, have already sold hundreds of cars on the site.
Morrie's Minnetonka Ford Lincoln Mercury has used eBay Motors for several years, selling 125 to 150 cars a year, General Manager John Aretz said. In fact, eBay now accounts for about a quarter of the dealership's Internet sales.
Morrie's often has more than 100 vehicles listed on eBay Motors, mostly used cars, trucks and motorcycles. Unique used cars draw the most interest online, and the majority of people who buy cars from Morrie's through eBay live outside of Minnesota.
"Most people know to shop eBay if they are looking for something that's a little bit different," Aretz said. "It's just a great source. It's an easy place to buy, it's an easy place to sell."
Earlier this week, more than 1,500 cars and trucks were listed within 25 miles of downtown Minneapolis, most of them on dealers' lots.
Training for dealers
eBay Motors has grown so popular that the Minnesota Auto Dealers Association (MADA) has started to hold twice-annual seminars to teach local dealers how to sell cars on the site. The seminars typically draw a couple dozen dealers.
The online market for cars has grown substantially over the past five to 10 years, but still hasn't reached its full potential, said Scott Lambert, MADA's executive director. "A lot of dealers right now are complaining that there isn't enough traffic, that there aren't enough customers coming in to kick the tires. I think the reality is that there's still a lot of traffic, it's just all online."
eBay Motors spokeswoman Barbara Terry agreed, noting that more than 2 million cars have been sold on the site to date.
"When you've got a worldwide inventory at your fingertips and you can shop from the comfort of your own home or office, it's hard to beat," said Terry, who has personally purchased hundreds of vehicles on eBay over the past decade.
For the more than 15,000 registered sellers, eBay Motors provides access to a nationwide audience at a relatively inexpensive price. The site charges a $40 insertion fee to list a car or truck and a $50 transaction fee if it sells. Various upgrades are available for an added cost.
Meanwhile, eBay gives buyers protection against fraud and misrepresentation of up to $20,000 on all vehicles. The site offers various shipping and inspection options, and as with other eBay auctions, the site posts seller ratings and reviews.
Those ratings are particularly important for someone spending thousands of dollars on a car they've never seen in person. Dealers work hard to keep those ratings high, said Morrie's Aretz, whose dealership has received 95.7 percent positive feedback.
"If you're going to put something on there, you've got to be upfront about whether it's got anything wrong with it," he said.
Other online car-buying Web sites, including Bloomington-based CarSoup.com, also are performing well right now.
CarSoup.com features cars from all of the Twin Cities' roughly 135 franchised auto dealers, plus about 12,000 additional vehicles for sale by private parties. "We have thousands more [local] cars than any of those other" online car sites, said Larry Cuneo, the site's president and CEO.
Unlike eBay, CarSoup.com charges dealers a flat fee for posting vehicle listings on its site and does not collect transaction fees.
CarSoup.com has been Golden Valley-based Luther Automotive Group's top generator of sales leads since 1998, said David Luther, president. The company has shifted much of its advertising from newspapers and other print publications to Web sites like CarSoup.com in recent years.
"We want to make it as easy as we can for our clients and consumers to find what they are looking for as quickly as possible," Luther said, adding that online advertising also is significantly less expensive.
jvomhof@bizjournals.com | (612) 288-2101
-
by John Vomhof Jr.
About Barbara
