Negotiating Car Prices On eBay (EBAY)

By Douglas A. McIntyre Updated Apr 28, 2:27AM EDT · Published Aug 10, 5:52AM EDT

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eBay (EBAY) and GM are setting up a program in California that will allow consumers to negotiate prices for new cars online. Potential customers can also set up financial packages to buy a new car and pick out the make and model.

The program would seem to be a good idea for getting new buyers to come into the car market, but that assumption is almost certainly not true.

According to The Wall Street Journal, “The trial is part of Detroit-based GM’s turnaround plan, making more official a practice some of its dealers had already participated in on their own.” The fact of the matter is that there is absolutely no evidence that a person shopping for a car is more likely to buy just because he can negotiate price online. A consumer without the time or money to buy a vehicle is almost certainly not going to suddenly become a buyer because of the eBay program. By the same token, a consumer who has decided to buy a car will buy it whether it is available only through a dealer or can be purchased online as well. People do not make $25,000 purchase decisions because of clever sales tactics.

The GM program with eBay is a fine example of the seduction of e-commerce. Technology may add to the ease of buying something but it is not likely to make a poor consumer feel rich. The people in California who want a GM car are going to buy it whether the eBay program is in place or not.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.