Women, minorities find buying cars online saves money

By Greg Wright
Gannett News Service

If you are a black or Hispanic woman, shopping for a car online might save you as much as $500.

That's because women and minorities experience less discrimination when buying a car on the Internet, according to a study released last month by Yale University, the University of California-Berkeley and J.D. Power and Associates researchers.

The anonymous nature of the Internet, in contrast to the public venue of the car showroom, contributes to the trend toward less discrimination, said Fiona Scott Morton, associate professor at the Yale School of Management in New Haven, Conn., and one of the researchers.

Women and minorities on average pay 2.1 percent, or $500, more to purchase the average automobile than white males, the study found.

Why the disparity? Women and minorities may pay more because often they earn less than white males or have weaker credit so that they cannot qualify for prime, low-interest car loans, said John Relman, a Washington civil rights attorney.

But Relman said discrimination also may be a factor because some car dealerships offer better interest rates in predominantly white areas or refuse to bargain for better deals with minorities.

Black car buyers in Tennessee filed a class-action suit against Nissan Acceptance Motor Corp. and General Motors Acceptance Corp. in 2000 for charging them higher interest rates for car loans than whites. The case is pending.

But blacks, Hispanics and women who were among 700,000 people who bought cars online at Autobytel.com in 1999 paid nearly the same price as whites no matter their income or educational level, according to the study.

"It may well be the way to avoid this problem (discrimination) is to go online," Relman said. "The Web is colorblind."

Gloria Hearns said she saved $1,000 on a 1998 Toyota Camry by using her computer to search for deals at Edmunds.com and Carquotes.com in the fall. Hearns said she worried that a showroom salesman would be reluctant to give women good deals.

"A lot of them don't think women are very knowledgeable about such things," said Hearns, a project coordinator at McDonalds Corp. in Oak Brook, Ill.

But not all parts of the Web are colorblind.

Last year, some African Americans in Washington accused now-defunct Kozmo.com, an Internet concierge service, of refusing to deliver books, music, videos and other items to some ZIP codes with large black populations.

"I don't put it past companies to be savvy enough to focus this way," Relman said. "It would certainly be a concern."