AT used to be completely free in 1998. I was one of the first Non-Franchised dealers on AT in Ohio. AT WAS the best thing since sliced bread. That was nearly 10 years ago. Every single solitary year our rates go up. It was free in 1998. The rates were $250 in 1999. Then $400. Then $700. Then $800. Then $900. Then $1000. Then $1200. Then $1400. We are now paying AT $1650 per month for our package. For $1650 per month, we can have an unlimited amount of inventory listed, we get a thumbnail picture on the main search page, a useless credit application link (only bustout's apply for a loan without seeing a car), a bold logo which doesn't stand out, a few spotlight ad's which generate ZERO leads, and 9 pictures of our vehicles to be hosted on the AT site.
We track every single phone call and UP on the lot. We find out if they were stopping in because of an internet site or whether they were drive by traffic.
When I first started on AT, sales were slow...maybe 3-5 cars per month from AT. I experienced roughly 10-12 sales per month from AT around 2001-2002. In 2003, when I feel AT maximized their ROI, I was selling nearly 20-22 cars every single month from AT alone for only $700-$800 bucks. Fast foward 3 and a half short years and I am back to selling 5 cars per month through AT and spending $1650 to do so. Now in the relative sense of advertising, $300 per vehicle for advertising isn't a horrible number when you are grossing $2000... But it is nearly impossible to have that kind of gross when advertising on AT.
Do a search on AT for a 2004 Jeep Grand Cherokee within 50 miles of your dealership. I just ran that search and there are TWO HUNDRED AND THREE 2004 Grand Cherokee's that come up. How in the world is an internet shopper going to land on my vehicle. To try to combat this problem, we've priced our vehicles so low online to get the customers in our door. Now we've eliminated our gross, but in many cases, we DO get customers in the door. Now the problem is the customers want to negotiate. It's a big problem since I am averaging $1000 gross per vehicle advertised online. So then we lose the sale because the customer wants to haggle, and we have no room left...
AT was great when there was little or no competition from other local dealers. Eventually, all of the dealers figured out AT was the biggest and best site to list their inventories on. It was the biggest bang for the buck. In 2003, they were on top of the world. But as nearly every thread on this site has pointed out, those times have come and gone and all that's left are extremely high monthly fees and very few sales.
Internet Jeff: You said 4 of your 8 sales this month are from AutoTrader.com...I think that you are in the minority and are extremely lucky.
We take 9 excellent pictures and we write excellent ads for each and every vehicle we list...but AT just isn't giving us back the ROI we became used to and now expect. The real question is what do we do now?
We were on Cars.com from 2004-2005 for 18 months. We were paying Cars.com $1100 per month and experiencing less than 2 sales per month from their site. I am not sure why it took us 18 months and $20K to cancel our contract. Cars.com rolled out some newer more attractive products and as our sales flatlined in early 2007, we decided to give them another shot. At $750 per month, it seemed like the 2 sales a month would be worth it...and of course we were hoping for more. We are still only averaging 2 sales per month over the last 4-5 months from Cars.com....
Going back to the original question: What do you think of AutoTrader.com's price hikes?
I am extremely unhappy about it...but I have come to expect it every year. Who wants to pay more and more each year for less and less?? As long as we the dealers pay their rates, AT is going to continue raising them....and can you blame them? It's just like the oil companies that are gouging us for gasoline...we aren't happy to pay $3 bucks per gallon...but what other choice is there???
