Navigating the landscape of online car advertising platforms is crucial for dealerships aiming to maximize sales and return on investment (ROI). With numerous options available, understanding which platforms deliver the best results for specific inventory and budgets is paramount. This article delves into a practical evaluation of popular platforms, including CarGurus, AutoTrader, and Motors.co.uk, offering insights from a dealer’s direct experience to help you determine if CarGurus is the right fit for your dealership.
Evaluating Car Advertising Platforms: A Focus on ROI
For car dealerships, every advertising pound spent must contribute to tangible sales and profitability. The effectiveness of an advertising platform hinges on its ability to reach the right audience and convert views into leads and ultimately, sales. Different platforms cater to varying car price ranges and customer segments, making platform selection a strategic decision.
Historically, AutoTrader (A/T) has been a dominant player, particularly for vehicles in the lower price bracket, typically under £6,000. Dealers found success with A/T for these budget-friendly cars, albeit with tighter profit margins. However, the increasing costs associated with A/T have led some dealerships to question its overall ROI, especially when considering net profit after advertising expenses.
CarGurus, on the other hand, has emerged as a strong contender in the mid-range vehicle segment, generally cars priced between £7,000 and £12,000. This platform has proven effective for dealers targeting customers looking for quality used cars in this price range. Motors.co.uk, while present in the market, often yields less consistent results, sometimes described as “random bits of nothingness” in terms of lead generation and sales conversion.
Facebook Marketplace initially showed promise, leveraging local reach and established community connections. For dealerships with strong local brand recognition and repeat customer base, Facebook can contribute a significant portion of business through return sales and local recommendations.
CarGurus: A Deeper Look into Performance and Value
One key practice for any dealership is to meticulously track the source of each car sale. By asking customers “Where did you see our advert?”, dealerships can gather invaluable data to assess platform performance. Presenting this data to advertising platform representatives can be eye-opening, highlighting the actual contribution of each platform versus perceived market dominance.
CarGurus distinguishes itself by strategically investing advertising spend in specific geographic areas, potentially leading to higher response rates for dealerships within those zones. While specific advertising strategies remain proprietary, the tangible feedback and results experienced by dealerships partnering with CarGurus are noteworthy.
One initial concern with CarGurus is the nature of email inquiries. Some may appear questionable or less serious at first glance. However, experience reveals that these inquiries can indeed convert into sales. Over a period of seven months, one dealership reported a remarkable 841% ROI from CarGurus, demonstrating the platform’s potential to deliver substantial returns despite initial skepticism about lead quality.
Another point of consideration is CarGurus’ valuation guidance. Dealer feedback suggests that CarGurus valuations might sometimes undervalue vehicles, potentially due to factors like vehicle specifications not being fully incorporated. It’s crucial for dealers to compare CarGurus valuations with other industry benchmarks like CAP Clean values to ensure accurate pricing strategies.
Conclusion: Is CarGurus Worth the Investment?
For dealerships contemplating new advertising avenues, CarGurus presents a compelling option, particularly for those focusing on mid-range vehicles. While AutoTrader remains relevant for budget cars and Facebook offers local reach, CarGurus distinguishes itself with strong ROI potential and targeted advertising strategies.
The recommendation for dealerships is to consider allocating a trial budget to CarGurus for a period of 3 to 6 months. This trial period allows for a real-world assessment of platform performance within your specific market area and inventory mix. Like any advertising investment, success with CarGurus can vary by location and dealership strategy, but its demonstrated ROI and focused approach make it a platform worth serious consideration for enhancing your online car sales efforts.
