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Has Anyone Else Got Their CarGurus Price Gouge Yet?

Discussion in 'Websites, SEO, SEM, Display, Social, Marketing' started by John V., Feb 4, 2019.

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  1. John V.

    John V.
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    My price is going to increase by over 115% per month.

    I'm going to cancel all my stores. Has anyone else got this?
     
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  3. Tallcool1

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    Not for this year...I am sure it is coming though.
     
  4. DrewAment

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    Once you have saturated your customer base (dealers) - you are limited on growing revenue. Raise prices, offer more products, and/or acquire companies. Wall Street wont allow the PEs to be sky high forever (I think CARG is like 90+). Sooner or later you have to actually get a solid ROI for the money invested.
     
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  5. Alexander Lau

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  6. John V.

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    Yup, I think I even started one of those grumble threads. It just pisses me off that they think they can legitimately ask for such a price increase and the reasoning for it is their web traffic is increase and our "leads" have gone up.

    Well, last time I checked, a website click is not a lead and your "leads" close rate is sub 5%. about 1/3 of what our website leads convert at.

    I have some ideas on where I could reinvest the money spent with CG. Who knows, we might take our 500+ used cars off their site and they might come running back but i doubt it.
     
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  7. Rick Buffkin

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    @John V.@John V. Personally I would take a diff approach instead of simply canceling the product if it's helping you move some cars. I haven't gotten hit yet with a price increase but before that happens I'm gonna cut my spending with them and try to start advertising on all the 3rd party sites a little smarter. With all the forecast of the market slowing down, I think all of us need to evaluate what these sites are bringing to the table and how their pricing is structured. I have our Toyota store on a paid account with Cargurus (175 - 200 car package). We've seen some pretty decent results from the paid package.

    This is for Oct.
    upload_2019-2-5_18-31-27.png

    Even on the free package we were closing 7 - 8% of the leads that we received. Some months it dropped to 5 - 6% but most months it ran around 7 - 8% on the free package.

    The question I keep asking myself is. Do I really need Carguru's to help me sell used Toyota's? 45% of my used inventory is used Toyota's. I interpret that as 45% of the monthly expense that I spend with Cargurus is going towards advertising Same brand makes and models. Can I reduce my inventory size package with Carguru's and only send them the vehicles that I really need help selling?? Ex: Used Mazda, Nissan, Honda or something other than a Same Brand vehicle. Talking with our inventory syndicator, all they said they would need is for the vehicle to be flagged and they would only send the vehicles with a certain flag in the file to Cargurus. It could turn out that I only need to have a 50 car package with Cargurus instead of a 175 - 200 car package.

    If I was you, I would find out what the other packages cost and be more selective on the inventory that they are receiving and actually advertising for you. Check your stats in their dashboard and see which cars are actually getting traffic and then set up benchmarks to determine which cars are above your benchmarks and which ones fall below it and then you can determine the actual size package you need. I would also look in GA at the referral traffic they are sending you and see which vehicles people are actually looking at from the referral traffic. It could be that the bulk of your traffic is actually on Off Brand Makes. By taking the selective inventory approach, it would also help you with advertising old age units as well if you wanted to include them in your file to Cargurus.

    Just my .02 cent.
     
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  8. ChrisR

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    I like that thought process.

    And to answer the original question 145% increase = cut them.
    Our rep keeps trying to sell me on a lower package, may see what is available to help us market off-brand vehicles a bit more.
     
  9. John V.

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    Full transparency.......I caved......**SHAME!!!***

    [​IMG]

    I ended up cutting AutoTrader to offset the cost (it was about time we put them to sleep anyway). My CG bill went up at 3 of the 4 stores. I was able to get one store's bill to go down by using their own logic against them because they claimed my lead volume went up at my other stores which was the reason for the increase. This store had lead volume drop so I got a $200 monthly discount. All in all my total bill for 4 stores increased by 38%.

    One thing I want everyone to be aware of is their obscenely bullish Annual Sales Growth estimate for 2019. They are projecting a 25% increase in revenue for 2019. The only way they are going to do that is by increasing your monthly bill. They have no additional dealers to add to their portfolio so the only way to get their stock price to increase is to put forth insane revenue projections and then increase all our bills. God Help Us!

    upload_2019-2-12_9-29-41.png
     
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  10. MitchFlorida

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    I think that CarGurus is head and shoulders above the rest. If CG is number one, who is number two, and does it really matter? I saw an early listing on CarGurus and the dealer hadn't yet had time to take pictures of it. The listing posted on Saturday night, and I bought the car the next day. Their price classifications are wonderful for the consumer. But what good does it do for a dealer to place an expensive ad in CarGurus only to see it described as "overpriced"?

    Still the site apparently has a huge following among serious car buyers, not the looky loos that tend to read the other sites.
     
    #9 MitchFlorida, Feb 14, 2019
    Last edited: Feb 14, 2019

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