And, the Web can be a refuge from the car lot, giving buyers the chance to make their purchases without having to shake a salesperson's hand. But car sites are still largely stuck in first gear, bogged down by the complexities of the vehicle trade. Complicating matters is a new counterattack launched on behalf of Detroit's Big Three automakers. Most of the current traffic at auto sites is for research. This year, just 17,000 households are expected to use the Internet to finance, purchase and arrange for delivery of a car - a fraction of the 37 million new and used cars that will be sold through dealerships.
Business models differ.
Only CarsDirect sells vehicles directly to the consumer and can make hundreds on each sale, depending on the vehicle. It has relatively low volume and high customer-acquisition costs on an infrequently purchased item. The thorniest obstacles for online auto dealers are state laws that make it difficult for anyone other than a local dealership to sell cars in a given area. Those rules relegate many online auto sellers to the role of referral sites for local dealerships. Some Web sites have run into technological limitations as they try to expand their business.