Best lead sources today for internet leads

[IbrahimZafar]

Closing % by source is the right lens, but a lot of buyers never submit a form at all, so every source looks worse than it is.

 

[The QR Code Guy]

Question for everyone based on the close rates Alex shared: What are you actually paying per lead from these third-party sources? The close rates are interesting, but without knowing the cost per lead, we're missing a big part of the economics.
In Alex's post, at a 6.4% close rate and $50 per lead, that's approximately $781 in lead acquisition spend per vehicle sold—before any additional marketing or sales expenses. And if you are paying for duplicate or bad leads, the effective cost could be even higher.
I'm curious what everyone is actually paying per lead across Autotrader, Carfax, CarGurus, Cars.com, and the others. Are you evaluating these providers on close rate alone, or on total acquisition cost per vehicle sold?

 

[ryan.leslie]

@The QR Code Guy

Good callout. I think it is also worth mentioning that the sold count is greater than show here for ATC and Cars. I can only think of two ways that happens:

1. Manual attribution - the rep is giving credit to a source that may not be the actual source.
2. We're counting solds in the month they sold and leads in the month they were submitted. That can skew a close %. A q3 average view should be long enough to compensate for that though.

What am I missing?

 

[Alex Snyder]

1. Manual attribution - the rep is giving credit to a source that may not be the actual source.
2. We're counting solds in the month they sold and leads in the month they were submitted. That can skew a close %. A q3 average view should be long enough to compensate for that though.

Absolutely. The data is from VinSolutions, but my source tells me it was similar to eLead. Both systems are antiquated and only provide single-source attribution.

On top of that, AutoTrader is the easiest option to click in the drop-down salespeople see when they're adding a new customer because of alphabetical ordering.

 

[The QR Code Guy]

Following up on my earlier question about what dealers are actually paying for third-party leads. I took the Q3 close rates shared in this thread and did some simple math, assuming a hypothetical $50 cost per good lead across all platforms.

Platform	Q3 Close Rate	Cost per Sale
Autotrader	9.4%	$532
CarGurus	6.8%	$735
Cars.com	6.6%	$758
Carfax	4.7%	$1,064
Edmunds	4.0%	$1,250
TrueCar	3.8%	$1,316
Overall	6.4%	$781

A few important caveats: These are illustrative calculations, not actual platform acquisition costs. Each provider has different pricing structures, some pay monthly subscription fees rather than per lead, and the attribution issues discussed earlier can affect the reported close rates. But look at the difference between a 9.4% close rate and a 3.8% close rate. At the same assumed lead cost, that's nearly 2.5 times the acquisition expense per sale. :-O And this is before factoring in other marketing expenses, sales personnel, and operational costs.

 

[jmc11]

Industry Average ranges from 500$-750$ a month. I wonder if those platform's ranges vary depending on regions?

 

[IbrahimZafar]

Here's the data I'm seeing on Google and Meta across our rooftops, Sep to Oct.

Franchise stores are getting more out of paid traffic on their used cars than on new. New converts fine, but the leads skew heavily to trucks. On the independent side the spread between stores is huge. The ones doing best are selling late-model SUVs in the mid-teens outside the crowded metros.
One thing on the close rates in this thread: CarGurus and Autotrader probably get a bit more credit than they earn. When a customer is asked where they saw the car, a lot of them just name the big site they know, even if the ad they actually clicked was somewhere else.