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Used car sites take off

In a sign that e-commerce is moving into unlikely niches, Consumers Car Club unveils a new Web site and buyer protection program for used cars.

In a sign that Internet commerce is moving into unlikely niches, Consumers Car Club today is unveiling a new Web site and buyer protection program for used cars.

Consumers Car Club can expect renewed competition in the secondhand auto market when AutoConnect, a used car e-commerce site, relaunches on May 19 to vie online for a chunk of the $365 billion used car market.

Consumer Car Club and AutoConnect share a common goal: To take the fear out of buying a car, especially a used car, using Internet technologies.

Whether widespread public mistrust about buying used vehicles can be overcome by using the Net--which is not fully trusted itself--remains to be seen.

AutoConnect is a joint venture between Automatic Data Processing (ADP) and wholesale auto auctioneer Manheim Auctions, a subsidiary of media company Cox Enterprises. It aims to list more than 1 million cars by year's end. AutoConnect outlined its road map in September.

AutoConnect also boasts marketing deals with search sites Yahoo and Lycos, while Car Club has a marketing pact with an affiliate of the Credit Union National Association, representing 11,800 U.S. credit unions.

"Anyone who buys a used car wonders, 'Is it somebody else's lemon? Am I buying somebody else's grief?'" said Michael London, Consumer Car Club's chief executive. AutoConnect executives declined to discuss their plans before the relaunch.

"We are basically building a new distribution channel," London said. "Our objective is to put quality products into that channel."

Consumers Car Club, now nearly ten years old, runs a toll-free phone service for car buyers called 1-800-CARCLUB. The consumer-oriented service offers car inspections, detailed histories of specific vehicles, pricing data, insurance quotes, and even negotiation with dealers for new-car buyers who don't want to set foot on a car lot.

"It's as easy as ordering a pizza," London contended.

Car Club used-car buyers can purchase a warranty through insurance giant AON, for as long as six years on most used vehicles that pass the company's inspection. In addition to the "we'll-haggle-for-you" service, Car Club also offers fixed prices from an approved list of dealers and factory direct purchases for U.S. carmakers.

Users can compare insurance rates through InsWeb. Car Club has services to help arrange preapproved auto leasing or loans. For those who yearn for a human voice, users can click on a button on Car Club's Web site to request a call from a customer service rep.

AutoConnect is expected to offer a similar range of services, people familiar with its plan say. On tap: loan and insurance quotes, free car listings (with photos) for consumers, free listings for dealers, profiling software from PersonaLogic to help consumers find the right car, vehicle comparisons, and auto industry news and reviews.

Car Club, which has spent $20 million developing its technology and partnerships, expects the majority of its revenues to come from car dealers, banks, and insurance companies that it approves as gatekeepers for preferred access on the site, London said.

A Car Club membership program is in the offing, and consumers pay fees for some services--$149 for bargaining for a new car; less than $100 to get a used car inspection, history, and pricing report.

"Our first mission is to educate consumers to make a decision or to facilitate the transaction when they want us to. We want to help the consumer buy the right car," London said. "When they make the transaction through us, we stand behind it if they have problems after the fact. That's a pretty unique position for us to stake out."

The new services enter a crowded marketplace. Auto-by-Tel, which refers customers to dealers that pay the company for leads, has made the biggest splash through advertising on the Web and in mainstream media. It plans a United Kingdom operation later this year.

AutoWeb.com and others also provide referrals, while other sites offer leasing, inspections, or reports on vehicles. Many auto dealers also have Web sites.