A new online service is offering East Coast shoppers what it calls a no-lose deal: either a bargain-basement price on a vehicle or a cash reward for their trouble.
For dealers, it offers a way to keep inventories under control and hit sales targets.
iDerive.com, a new Web site to be launched today, Aug. 14, works like this:
Consumers log on to iDerive.com and select a vehicle offered by a dealer in their area. The price, set by the dealer, is 'cheaper than any other price on the Internet,' says Matthew Bibbo, senior vice president of iDerive's automotive division.
The dealership sets a waiting period, usually two to three weeks, during which it tries to sell the vehicle at a higher price. For the dealer, the discount price offered on iDerive.com is a kind fall-back position.
A CAR OR A CHECK
Meanwhile, a Web surfer who likes the iDerive.com price signs an electronic contract with iDerive.com committing to the discounted purchase. If the car is still available at the end of the waiting period, the deal is concluded by the dealer. If not, the shopper receives a check from iDerive for up to $1,000. An average check would run about $550, said Bibbo.
'We're targeting slower-moving inventory,' Bibbo said.
iDerive.com, of New York, has contracted with approximately 100 East Coast dealers to offer new and used vehicles on the site. The company recently raised $5 million in venture capital.
iDerive.com hopes to go national in 2001.
NOT JUST AUTOS
Discounted airline tickets, hotel rooms and consumer electronics also will be sold on iDerive.com.
'All we do is provide that liquidation price to our customer,' he said. The dealer sets that price. Bibbo calls iDerive an inventory management tool.
Kate Fair, general manager of Decker Dodge in Hawthorne, N.J., said iDerive.com will help her meet sales objectives.
'You know what you'll have to spend to get what you want (in dealer cash),' she said. If a dealer is just shy of meeting a sales objective that will bring $30,000 in incentive cash from the manufacturer, selling cars on iDerive.com can help meet that goal.
iDerive.com makes its money from participating dealers. Each new vehicle sold on iDerive.com costs them $200. Each used car sold brings iDerive.com $350.
The company also makes money on financing, which can be secured at its site.
iDerive.com is in business to bring dealers financial rewards by bringing customers into the dealerships, Bibbo said.
'We want to give the dealership as much control as possible,' he said.