Looking To Buy A Car? CarWoo! Could Offer You An Edge

October 15, 2010

Buying a new car is many things, but rarely is it fun. Sure, it's nice to window shop, to zip through a few test drives, but there are also loads of important decisions to be made, questions to ask, and often, contentious arguments with a significant other. The new web service CarWoo!* can't help with any of those things, but it might make one of the worst parts of car buying a tiny bit easier: haggling.

CarWoo! aims to give shoppers an edge by letting an array of dealers vie for their business. Shoppers log in to the site, name the car they want to purchase (including color and extras), then CarWoo! sends out word to dealers in its network. The dealers respond with offers, allowing shoppers to pick the one they prefer -- all while keeping the shopper's identity a secret and shielding her/him from an endless barrage of follow-up calls and emails. Here's a video that shows the process in action:

Neat, huh? But before you dash on over to the website, there are a couple of things you should know.

CarWoo! charges a fee -- as the FAQ says, "so that dealers know you are serious about buying a car". (And also to monetize the site.) The basic plan, which matches users with two or three dealers, costs $39. The premium plan (which CarWoo! actually describes as "our most popular plan", just like an infomercial) runs $79, and promises to match users with three to five dealers. The premium plan also comes with a low-price guarantee.

Now, we have nothing against websites making money, but the fact that CarWoo! charges customers rather than dealers is a new development customers will need to balance against their needs. The precedent on similar sites has been to charge the seller of the product. In light of other comparison sites like the free LendingTree.com -- which does the same thing CarWoo! does, but with loans -- CarWoo! might not be for everyone. Web users tend to gravitate toward free services, so we'll watch as they learn. 

There's the question of dealer location. CarWoo! clearly avoids promising shoppers that their best offer will come from a dealership in their neighborhood. Depending on where you live, your lowest bid could come from a dealer located several hours away. The site allows users to specify a particular dealer if they like, but obviously, CarWoo! can't promise that that dealer will come back with the best offer. It's a little like Priceline, in the geographic sense.

Of course, those may not be huge quibbles. In the grand scheme of things, $39 or $79 isn't much to pay if the savings on the purchase are substantial. And as CarWoo! says on its website,"Driving for a couple hours is totally worth it if it means an extra couple thousand dollars in savings, right?" (Assuming you have a car in which to make the drive -- and a friend to drive it back for you.) But as with any service provider -- start-up or otherwise -- it's good to be informed.

* Full disclosure: CarWoo! has listed High Gear Media, which owns this site, as a partner.

[Reuters via Eric]

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