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CarGurus Instant Market Value - Not Factual?

John V.

Boss
Jan 15, 2015
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John
Our dealerships recently enrolled with CarGurus enhanced listings with the upmost reluctance. The main factor for enrolling was that we grossed more off their "free" leads in 2016 than our paid listings on AutoTrader. Figuring that we could only improve if we actually had the customer's real contact information, we are giving them a shot for the next 3 to 4 months to see if it moves the needle. I am not a fan by any means of paying for 3rd party sites but, in my humble opinion, it is a necessary evil of our industry that you can at least be found on these sites as part of your marketing efforts.

However; I have a MAJOR concern with CarGurus "Instant Market Value". I am told that this is a representation of our "local" market but I find that extremely hard to believe. For example, I typed in 2013 Honda CR-V within 50 miles of my zip code. 60% of the vehicles listed were my vehicles and every single one was supposedly overpriced by over $2000+. How??? We ARE the market. There is not another Honda dealer for 100 miles in any direction and we have 4X the Pre-Owned Honda Inventory vs. our closest competitor yet we are somehow "overpriced" for our market? I now have one star reviews on CarGurus because the customer feels that we are trying to take advantage of them because CG said that we overpriced our low mileage, HCPV.......

I was shown their pricing adjustment tool which basically showed that if I took every overpriced car and marked to a <$1000 gross I could get close to listing on page one. Has anyone else gone toe-to-toe with CarGurus over this?
 

ChrisR

Boss
Oct 12, 2015
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Christian
Not yet, but I will let you know how things look once our enhanced package goes live. Our new GM is a big fan of CG's enhanced package, so I will have to keep an eye on the IMV.
 

John V.

Boss
Jan 15, 2015
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John
Most likely your inventory is already listed on there for free currently. Do a search for some cars on your lot and see what you come up with.
 

ChrisR

Boss
Oct 12, 2015
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Christian
Our inventory is on the free program, we don't get many leads off of it though. Could be because only some of our inventory is showing. For now, the cars I can find are showing as only a few hundred above market.
 

Rick Buffkin

Sausage King of Chicago
Oct 29, 2009
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Jlewis74

Rust & Dust
Mar 21, 2013
218
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Jeremy
I ran some market data on the 2015 unit above that is prices at 21,725 here are the units listed with in 100 miles. Do you guys use a pricing tool like Inventory + or VAuto? here are a few examples, it seems your price is really high compared to the market.
http://www.autotrader.com/cars-for-...gId=446507913&ownerId=65895585&searchRadius=0

http://www.autotrader.com/cars-for-...gId=445110550&ownerId=27318912&searchRadius=0

http://www.getauto.com/2015/honda/a...tteville/2015-honda-accord-details_165594292?
 

John V.

Boss
Jan 15, 2015
178
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John
Thank you Rick for pointing that out! I will get with CG and see what their explanation is for that as that is not how I was told the market value works.

Hi Jeremy: I would say going out 100 miles is a little ambitious for our market. Most of our customers are driving less than 40 miles on pre-owned and our 2015s are usually HCPV which is worth more than a non-certified. Our stores do not believe in pricing tools like vAuto as it cuts into gross. Because we do not floor our used inventory and purchase 100% customer trades, we can afford to let a vehicle reach the 45 - 60 day mark before cutting the price down. Once a quarter we will have Manheim come do a mobile auction on our lot where we run select aged units through. Its mostly all the BHPH or smaller dealers that come and it turns a profit for us. Plus, everyone wants a discount regardless of how well it is priced in the market so why set yourself up for failure from the get go is the mindset. I realize this is not the best strategy for everyone or for all markets but it has been a profitable one for us. At least until CG started telling everyone we were priced to high compared to the national market.... :mad:
 
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autohitch

Green Pea
Aug 12, 2017
21
4
First Name
Steve
Our inventory is on the free program, we don't get many leads off of it though. Could be because only some of our inventory is showing. For now, the cars I can find are showing as only a few hundred above market.

Do you use inventory management or post to Gurus independently?