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Dream Cars on the Information Superhighway with eBay Motors

How to Find Your Dream Car Using the Internet

Stephanie Tilenius, vice-president and general manager, eBay Motors.
Stephanie Tilenius, vice-president and general manager, eBay Motors.

Whether your dream car is a beige Honda Civic or that mouthwatering, red Alfa Spider, you'll want to get the most value you can for your money.

Increasingly, the finance gurus are urging the public to "buy used" when it comes to cars, but it might surprise you to learn that this advice is especially applicable when it comes to automotive shopping online. One company that isn't surprised is eBay Motors.The automotive division of online giant eBay has built a thriving $5-billion business out of used car sales by doing for cars what eBay does best: providing vast selection in a secure, efficient marketplace, where competition for buyers tends to keep price in line with value.

The good news: by overcoming any trepidation about buying a used car online, women consumers can get that dream car for a great price, safely and securely — possibly even for a better price than offline.

eBay Motors came into being in 2000 when company executives noticed that alongside collectible toy cars being offered for sale on eBay, some sellers were offering real cars. The division has since grown to become the largest used car marketplace in the world by offering, as the company likes to say, "a great deal in a safe environment."

But how safe can it be to buy a car sight unseen? Very safe, according to Stephanie Tilenius, vice-president and general manager, eBay Motors. However, a lot of consumers might not be aware of just how they can do better by buying online.

"All of the typical anxieties people have about buying a used car also come into play when buying online," Tilenius said. "So our goal was to make eBay Motors the secure place to buy a used car and get the best value."

By all accounts, the company is well on its way to achieving that goal. In 2002, more than 300,000 vehicles were sold on the site — with a Sports Utility Vehicle (SUV) selling every 10 minutes and a motorcycle every nine minutes. To have some perspective on what this means, significantly more vehicles are sold on eBay Motors before lunch than a typical dealership sells in a year.

Over the past three years, eBay Motors has become a lively community where buyers and sellers can rate each others' reliability and reputation — to the benefit of new users. Equally key to making buyers and sellers more comfortable with the process has been the implementation of formal, built-in buyer and seller protections that can help take the anxiety out of purchasing a big-ticket item like a car online.

"Naturally, people want to be sure the car they buy will be as advertised," said Tilenius."And because eBay Motors is a national marketplace, they often won't be able to go and see for themselves. The best safeguard is our buyer and seller feedback — this is a community that really polices itself and demands integrity of its members. Plus we offer a Mobile Inspection Service that goes and checks the car out for you. You can do VIN checks on the site. And payment can take place through our escrow service, so that your money doesn't actually change hands until both parties to the transaction are satisfied."

eBay Motors has developed an impressive set of buyer and seller protections that make buying a car online as much like (if not better than) buying off line. Safeguards include:

  • The Feedback Forum — This feature provides an instant, national reputation or scorecard for each individual that transacts business on eBay. Buyers can check a seller's Feedback Profile before placing a bid to learn about the other person's reputation with previous buyers. Sellers can do the same with bidders.

  • Limited Warranty — To protect eBay Motors buyers from the burden of costly repairs immediately after purchase, a Limited Warranty is provided free on most used cars under ten years old with less than 125,000 miles. Administered by, the warranty offers sight-unseen coverage on vehicle failure for one month or 1,000 miles, whichever comes first.

  • Purchase Insurance is provided free of charge by eBay Motors to all passenger vehicle buyers to protect against cases of outright fraud or gross misrepresentation which results in devaluation of the vehicle of at least 50 percent of the vehicle's purchase price, with a maximum coverage of $20,000 (additional coverage restrictions, conditions, and limits apply).

  • Seller Guarantee — This program provides buyers with added protection when purchasing a passenger vehicle, requiring its members to put forth their best efforts to build buyers' trust. Sellers must both guarantee the vehicle condition is as described in the listing and work directly with the buyer to ensure satisfaction with the vehicle.

  • is eBay Motors' escrow partner. This service will hold your payment and send it off to the seller only after you've inspected your merchandise and given your approval. Sellers have the same opportunity to inspect and approve a returned item before the buyer gets refunded.

Significantly more vehicles are sold on eBay Motors before lunch than a typical dealership sells in a year.

As important for many women as safety is access to information that will enable them to get the best deal. Fortunately for them, eBay Motors recently signed a partnership with Kelley Blue Book ( that provides shoppers on the eBay Motors site with the resources to research and compare different models and ballpark prices. Once a buyer has decided what model she wants, it takes just a few seconds to find out if any are for sale on the site. In any given month, the site offers over 28,000 cars, from Acura to Volvo and everything in between.

For women especially, taking the plunge and buying a car online has the potential to be downright liberating. Many women dislike shopping for cars — often because they don't feel sufficiently knowledgeable or because they are uncomfortable negotiating.

"For three weeks straight I dragged my son — who is a mechanic — to the dealership to look at vehicles with me and it became an exhausting process," said Sheila Petrin, a teacher from Lakeport, N.H. "It did help me to find out what car I wanted, and some ballpark prices, but I wasn't ready to have to buy it from a dealer. I didn't have enough information at the time to get a good price."

Recent research in fact supports the idea that women do pay more when buying a car offline. And according to a recent study, this may be because a significant segment of the car-buying public — a segment that tends to include women and minorities — may be at a greater disadvantage than other consumers in the confrontational process of comparison shopping and haggling over the price of a car."Certain consumers dislike bargaining more than others," said Florian Zettelmeyer, an assistant professor at UC Berkeley's Haas School of Business, and co-author of the recent study, Consumer Information and Price Discrimination: Does the Internet Affect the Pricing of New Cars to Women and Minorities? "In our data, on average, women dislike the bargaining process significantly more than men do."

Dislike of the bargaining process was correlated with faring less well in automotive negotiations. Basically, the research suggests that people who like to bargain are better at it. People who don't like it often end up paying more.

The study also found that consumers who purchase cars online pay measurably less — an average of 1-2 percent than do — consumers who buy offline, a finding that the authors dubbed "the Internet effect." For women specifically, the data is not entirely clear cut because many women shop for cars with men.

However, the authors conducted one analysis of purchasing data where they assumed that a woman buying a minivan was more likely to be married and thus making the purchase with a man in tow, while women buying in the "entry-sporty" category were more likely to be single and thus to be shopping alone. They found that indeed, women pay more than men for a comparable car in the latter category.

So, how to account for the Internet effect? The authors of the study theorize that in essence, the Internet removes the seller's ability to identify buyer characteristics that might indicate discomfort with bargaining. The study notes that consumers who lack information or who may come across as weak negotiators will benefit the most from an online marketplace, because a sales platform that effectively conceals these characteristics from the seller will mean a more level playing field for buyers.

"We found that for people who dislike the bargaining process, the Internet effect is stronger," Zettelmeyer said. "So to the degree that women might prefer to do less face-to-face negotiating, buying online has an even more empowering effect for women than it does for men."

Not surprisingly, women are among eBay Motors' most enthusiastic buyers and sellers.

"The prices at the dealerships were higher than we were willing to spend. Looking through the classifieds was just too time consuming and didn't give me enough information about the car," said Adriana Glass, an inn keeper in San Luis Obispo, Calif., a long-time member of the eBay Community. "When I was bidding on vehicles on eBay Motors, the sellers sent me additional photos when I asked and I was able to read about other buyers' experiences with them on the boards. I found an Isuzu Amigo, bid on it, won and got a great deal."

Martha Fligor, a retired school teacher from Dayton, Ohio agrees that eBay Motors has provided some great deals and rare finds to feed her passion for Corvettes.

eBay Motors website
Welcome to eBay Motors!

"I had friends searching in four states for this one 1998 Corvette pace car. The first time I searched on eBay Motors I found the perfect one: radar blue with yellow pace stripes on the side, leather interior and low mileage — that's unheard of to have such low mileage on a car like this," Fligor said. "The community and the dealer himself took all the pressure off, but it was such a fun adventure — all I had to do was wait for my beautiful car to arrive. It was a terrific experience."

So how can you get your sweet little self into that juicy dream ride? A recent visit to the eBay Motors site revealed some great values, and eBay Motors' Stephanie Tilenius indicates that while site inventory changes constantly, a regular visitor can expect to find similar deals. For instance, we found:

  • 1998 Dodge Caravan for $6,500

  • 2001 Ford Explorer for $9,900

  • 1999 Dodge Ram for $8,195

  • 2002 Honda Civic for $6,600

  • 2000 BMW 3-series for $17,100

The purchasing process is simple, according to Tilenius. Consumers can bid on cars in the traditional eBay auction style format or utilize the "Buy it Now" option to purchase a car immediately for a given, fixed price. Here are the steps buyers need to take.

1. First, you need to register as an eBay member. It's free, takes only a couple of minutes and involves filling out a simple, online form.

2. Look carefully at the car you want to bid on, and note the current price. This will dictate where your bidding needs to start. The window will indicate what the minimum bid increment is.

3. While you can bid on any vehicles up to $15,000 without providing background or credit verification, bids at $15,000 or above require verification of the user's credit and identity. To place such a bid, you must provide a valid credit card (your card won't be charged) or, if you prefer, you can go through eBay's quick ID verify process (no credit card required).

This requirement helps ensure that anyone bidding on a big-ticket item (like many cars) is of legal age and is serious about completing the transaction.

4. Enter your maximum bid in the bid box at the bottom of the page. Then, click on the "Review Bid" button. eBay will then bid on your behalf up to your maximum bid.

5. Next, enter your user ID and password. That's all there is to it.
It sounds simple, and it is. When you win your auction, or bypass it with Buy it Now, the steps to pay for and ship your new ride are equally straightforward. This month, eBay Motors is adding a Finance & Insurance feature, so users can even get low-cost financing and insurance right at the point of purchase.

eBay Motors website
The eBay Motors vehicle selection is staggering - from Rolls-Royce to Mazda.

eBay Motors' future with women consumers looks promising, and we have to admit that with the open road beckoning this summer, we may be part of it. More specifically, we have our eye on a recently-listed red 2002 Miata in mint condition that has spent its entire life cozily garaged while only logging up 4,500 miles. eBay Motors partner Kelley Blue Book suggests that this beauty is worth $19,620 but the eBay Motors auction is only at $15,050! And the seller has 47 ratings — every one of them glowingly positive.

With deals like this, and a safer environment that just might give women lower prices on great cars, we think eBay Motors is an outlet that more women will be turning to in the future. And if you see us driving just the cutest red Miata this Labor Day weekend, don't be surprised to hear, "We got it on eBay."