CarsDirect

Full review
I helped my sister through the car buying process several years ago (she bought a Mazda Protege) using CarsDirect and we had a pretty good experience. I recently helped my mother buy a car (a Subaru Forester) and had a negative experience with CarsDirect.

At CarsDirect, when you have decided on a model and have chosen your preferred colors, options, etc., you are given two choices. The first is to work directly with a CarsDirect representative, who will locate the car through their dealer network and supposedly will guarantee you the "CarsDirect Price". The second option is to have one or more dealers contact you with price quotes.

My sister took the latter route. She got two good quotes from local dealers (she lives in the DC area) and was then able to play them off of each other over the telephone--as any seasoned car buyer can tell you, negotiating with dealers over the telephone or via the Internet is likely to be more beneficial than negotiating at the dealership, where the whole millieu stacks the cards towards the dealer. The result was that she got a great price--several hundred dollars below invoice, plus at the time there was $1000 cash back incentive on the car, and she was therefore able to take another $1000 off of the negotiated price.

Since my mother prefers not to negotiate or to deal directly with car salespeople, she decided to work directly with the CarsDirect representative rather than getting a dealer quote. Although the supposed invoice price (not including the dealer holdback) was roughly $20,500 and the CarsDirect price was $20,800, she would rather pay a few hundred more dollars than if she negotiated herself--as long as she didn't feel that she was being taken advantage of.

The problem is that the CarsDirect representative tried to tack on two additional charges, a $150 documentation fee and a $100 fee to deliver the car to a local dealer. By the time you added these charges to the so-called "guaranteed" CarsDirect price, she would have only saved about $200 compared to the MSRP. When she balked at these additional fees, the CarsDirect representative indicated that the fees weren't negotiable. Well that was pretty stupid, because given the fact that the local dealer had 40 Foresters sitting on the lot, it wouldn't seem that the demand is higher than the number of cars available right now. It is pretty clear that she could do at least as well as if she had agreed to pay these bogus charges if she walked into the dealership and offered the salesperson $200 below the MSRP.

Wouldn't you figure that an Internet company that serves as an alternative to the traditional car buying experience wouldn't try these sleazy low-ball tactics? I was pretty offended that they would guarantee a price and then add-on these charges. To me these charges (if legitimate at all) are the price of doing business and should be deducted from the profit that CarsDirect is making on the sale. The good-will that I had towards CarsDirect from my sister's car buying experience is gone. Although I would have previously recommended them to someone in the market for a new car, at this point I would not.

The end of the story is that I went to Edmonds.com and clicked on a button that gave me four quotes from local dealers. Two of these quotes were $100 to $200 below invoice price (about $20,350, which is about $450 below CarsDirect's "guaranteed" price and about $700 below their "guaranteed" price plus their B.S. add-on charges). I emailed the salesperson at the dealership and he agreed to waive their documentation fee, so we paid the quoted price (plus tags, title, and tax) and were on our way in 45 minutes.

Moral of the story: if you use CarsDirect's representative, they will low-ball you with a guaranteed price and then add on bogus charges. Better to try another route.