Study Finds Minorities, Women Fare Better Buying Cars on Net

December 9, 2001

Katie Hafner, Lexington Herald-Leader

Minorities and women get a better shake buying a car over the Internet than in person, a recent study found.

The study, by researchers at Yale University and the University of California at Berkeley, found that the Internet levels the playing field for black, Hispanic and female customers, who usually pay more for cars at dealerships than white males do.

The authors found that on average, black and Hispanic consumers pay 2 percent more, or about $500 on the average car, than white male consumers. Women pay 0.2 percent, or $45 more.

The authors looked at 700,000 transactions made through Autobytel.com, finding that when such consumers used the online service, the price differences disappeared.

The authors contend that it may not be racism or other forms of discrimination that drive car prices up for the groups they studied, but that these groups tend to have less information going into a car purchase, which makes it more difficult to comparison shop.

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Source: 2001, Kentucky.com and the Lexington Herald-Leader