Buy Your Next New Car on eBay?

August 31, 2009
Michael Sheehan

General Motors is launching a buy-a-new-car-on-eBay program to slash its backlog of unsold vehicles. Is it worth a shot?

Even as the government’s cash-for-clunkers program is cutting into dealer inventories, General Motors is launching an innovative buy-a-new-car-on-eBay program to slash its backlog of unsold cars and trucks even further. From now through September 8, about 225 California GM dealerships will post close to 20,000 new Buick, Chevrolet, Pontiac, and GM vehicles on an eBay Web page. Although car dealers have used the eBay Motors site to peddle mostly used cars for almost a decade, GM’s online marketing effort marks the first time a major car maker has gotten its dealers to list large numbers of new cars on an eBay page.

Theoretically, buyers can negotiate a final price under the GM program without ever leaving home. Buyers who visit the GM page will have the option of taking the dealer’s “Buy It Now” price, which will probably be lower than the MSRP, or negotiating for a better deal. This ability to haggle over the final price without having to go face-to-face with a salesperson will be the big difference between the GM eBay program and other online car-buying sites, say some auto industry analysts, but only if dealers are willing to honor online price quotes. If buyers are asked to come in to the dealership to nail down the deal, say the auto experts, the program is likely to fail.

Although the program is limited to California dealerships for now, anyone can buy a car through GM’s eBay page as long as they’re willing to show up in person at the dealer’s lot to finalize the paperwork and pick up the car. GM officials hope to roll out the program nationwide if it goes over well in the Golden State.