(MONEY Magazine) – Eileen Horwath of San Francisco bought her new Honda online. Eileen Horwath is among the new breed of Web-savvy car shoppers. Looking for a Honda Civic that fit her budget, the 24-year-old San Franciscan never even considered stepping into a dealer showroom. Instead, she went to several auto sites on the Internet and swiftly got a $15,000 offer for a new 2000 Civic EX coupe from Carsdirect.com. Six days later, she had the black compact delivered to her--at the office.

The experience was a breeze and a real deal too. The Honda was $1,350 below sticker price, even less than the cost of some year-old Civics. "I didn't worry at all about buying on the Internet," says Horwath, an analyst with a corporate strategy consulting firm. "I had much more trepidation about going into a car dealership."

Gone are the days when car shopping was as intimidating as a trip to the dentist. Now it's become positively painless. Thanks to the emergence of several major online car buying and pricing services, the Net is changing the way many people buy cars. In fact, it's becoming the go-to source for detailed information about vehicles. And consumers are taking notice. Nearly 50% of all new-car buyers have used the Internet to do research, according to CNW Marketing/Research, and about 3.5% actually bought through an Internet service this year.

Even if you're not as daring as Horwath, the Web can be a powerful tool for car shopping. It provides access to loads of valuable information once available only from the auto manufacturers and their vast network of dealers. Better yet, it makes it easy to obtain the most important number for buying a new car: the dealer cost, or invoice price. As smart shoppers know, this number--not the manufacturer's suggested retail price, or sticker price--is the starting point for a good deal.

While the Internet is definitely empowering, it can also be confusing and downright maddening. More than 50 sites give invoice prices alone, and at least 15 sites sell cars--all with a wide divergence in prices, speed and quality of service. Worse, a thicket of state regulations stands in the way of certain online transactions.

What's a harried consumer to do? To help speed your search, I have reviewed dozens of auto sites and picked the best, fastest and easiest for all stages of the shopping and buying process. Keep in mind that this step-by-step approach will make you a better consumer, even if you buy from a dealer rather than making the purchase online.

PICK YOUR MODEL AND OPTIONS

Not sure what car you want? A great place to start your search is Netscape.com's auto site. Go to the Decision Guides section, and you'll be directed to Netscape's CarMatch service. It allows you to shop for new cars based on your desires, from make, model and size to price.

In my site test I decided to search for a new station wagon--the category's popularity has been increasing (besides, if I didn't own a sport utility, I would probably have a wagon). After you put in what you're looking to spend, you answer questions about how much certain features matter to you--more head- or legroom or greater cargo space, for example. When I selected wagons under $30,000, it gave me five models. I knew from past test drives that I liked both the Volkswagen Passat and the Subaru Outback. To check them out in greater detail, I set up a side-by-side comparison of the two models, a fantastic feature that really shows the power of the Web. (You can do similar searches in the the Car Guide 2000 section of MONEY.com.)

I soon learned that the VW had the advantage in two areas I care a lot about: power (190 hp vs. 165 hp) and cargo space (39 cubic feet vs. 34 cubic feet). Satisfied that the 2000 VW Passat GLS V6 wagon was the best car for me, I clicked ahead to get a price for it. With automatic transmission and a CD player, the sticker price was $26,200, and the dealer invoice cost was $23,963. The printable page showed the base cost plus the breakout for various options, very valuable information indeed. Below I'll show how to use these numbers to set your target price.

It's hard to beat the speed or depth of this site. (I also like the car area on MONEY.COm, but I can't claim to be impartial. I write a regular column on the site.) Along with the car-shopping tools, Netscape has nifty features like My Showroom, which allows you to save and retrieve information on models that you are interested in.

Beyond comprehensive sites like Netscape, it's also worth browsing the auto company corporate websites. GM.com, Toyota.com and others offer online brochures and provide detailed information on colors and standard and optional equipment. But remember that these are basically ads for cars; the sites are far less interactive than those of other car services.

At some point during the search for the right model, it's worth test-driving several cars. Nothing beats getting behind the wheel to get a feel for a new car, as buyer Ken Rand recently learned. Rand, who owns a food-brokerage business near Atlanta, used the Web for most of his price research but also test-drove Acura, Infinity and Lexus models before deciding upon a Toyota Avalon. That helped in the next stage of his shopping experience.

GET REAL-WORLD SELLING PRICES

Once you have settled on a model, it can be tempting to go to a selling site and quickly make a deal. Before you do, check out several independent price sites. I recommend Edmunds.com, Kelley Blue Book's Kbb.com and Microsoft's CarPoint.msn.com, all of which provide full invoice prices and the cost for options.

Good bargainers always start negotiating with the invoice price, but the tricky step is to determine how much over (or occasionally under) invoice to set your target price for a certain model. In general, a good deal for a new car is 2% or less above the dealer's invoice price ($400 over a $20,000 invoice price, for example). The price you can get varies greatly with how strong demand is for a given model, but recently introduced Web data can really help you figure out whether a price is fair.

For instance, Edmunds.com has just begun posting so-called true market value prices. Edmunds determines a car's market value by factoring in the supply and demand for a given model and spot-checking more than 400 major dealers around the country. The service is still new, but it's promising. By next year, Edmunds plans to improve on the numbers by offering prices that reflect regional differences. The popular Lexus RX 300 sport utility, for example, was recently selling for higher prices in the Northeast than in California. To double-check Edmunds' market price, go to Autoadvisor.com, a service that shops for the best price for clients. It posts target prices in dollars above (or occasionally below) invoice.

Another website, Carclub.com, affiliated with the J.D. Power research firm, plans to post regionalized average selling prices for all models in the biggest metropolitan areas by year-end.

The detailed information offered by these sites is useful as a starting point in your negotiations. "When I went to a dealer and showed them the Edmunds printout, it saved a lot of time," says Byron Glueck, 31, a software developer from Charleston, S.C. "They stopped trying to give me the usual spiel and negotiated seriously." Glueck got his fully loaded 2001 Audi A4 Quattro for $28,100--$800 below the Edmunds market price.

SNARE AN ONLINE OFFER

Once you're armed with cost information, it's time to start making a deal. Of the approximately 15 sites that provide online selling, three offer the best prices: Carsdirect.com, Autonation.com and Driveoff.com. Web research firm Gomez Advisors recently ranked Carsdirect and Driveoff Nos. 1 and 2 among the 13 sites it surveyed. (Autonation wasn't in the survey.) Each of these services provides a firm price for the car you want and then locates it through a cooperating dealership or sells it to you directly. Check all three to find the one that offers the best coverage in your area.

Carsdirect made a name for itself last year by offering low promotional prices. Though its prices are now higher, my comparison shopping shows that it still typically quotes among the lowest prices on the Web. The service does have some drawbacks. It often cannot get the hottest-selling cars, which dealers want to keep to sell themselves. And because of state laws and regulations, you can't use Carsdirect in 11 states (Alaska, Arkansas, Hawaii, Kansas, Montana, Nebraska, Oklahoma, Tennessee, Texas, Utah and Wisconsin).

Autonation is also very competitive on price. The company has 400 car dealers in 25 of the biggest cities and is beginning to expand its reach in the Northeast and upper Midwest, having recently snapped up the AutoVantage.com selling service. It's worth shopping Autonation if it's available in your area. In Tampa, an Autonation stronghold, I found a well-equipped 2000 Ford Taurus LX for $17,368, including a $1,000 consumer rebate--$200 to $350 below online competitors and about $400 below Edmunds' true-market-value benchmark. Autonation.com is getting bigger every day. It recently formed an alliance with America Online (which is merging with Time Warner, MONEY's parent company).

Driveoff.com is allied with dealers in such a way that it can operate even in Texas, the most difficult state for online services to crack. Driveoff usually will give you price quotes from two or three dealers at varying distances from your zip code, a convenience that sure makes it easier to locate a car. The other good news is that the site, which is now owned by Microsoft's CarPoint website, is also extremely competitive on price, especially in areas where Autonation is less dominant. In the Los Angeles area, the Driveoff price for a well-equipped Jeep Grand Cherokee Laredo sport utility was $26,045 after a $1,500 consumer rebate--$400 below Autonation and $700 under Carsdirect.

It's worth noting here that Amazon.com recently jumped into the car-selling game with Greenlight.com. Greenlight began in November 1999--one to two years later than its competitors--with investments from venture capitalists and two major auto dealership groups. The service allows you to search for a new car by your zip code and offers to find a dealer near you. Greenlight provides plenty of information, from trade-in values to financing specifics. But it has only about 1,500 affiliated dealers nationwide. Carsdirect.com and Driveoff.com have 2,500 apiece. So for now I'd stick with the three sites I've recommended.

LOOK FOR FINANCING

Nearly all sites have a link with an auto financing site. But before you click your way to a new loan, it's best to head to the financial services website Bankrate.com. It will show you the benchmark information you need: the current national average interest rate for car loans and the best rates being offered by banks and other lenders in your area.

Another solid online resource for competitive bank loans is LendingTree.com. The best rate I got in a recent test was 1.5 percentage points below the national average car loan of 9.15%. Assuming you have good credit, you can probably get approval in an hour or less.

Even with those choices, though, don't overlook the car-selling sites completely. Some, like Driveoff.com, offer competitive financing along with the lightning-fast service you'd expect from an electronic retailer. Charles Ellison of Littleton, Colo. put in his lease order for a new 2000 Honda Accord on a Thursday evening and picked up the car the following Monday. "The lease deal was good, but speed was what mattered to me," says Ellison. "I couldn't have had the car when I needed it any other way."

Now that's what you call making technology work for you.