I'm not ok with it. It's using someone else's business name, brand and PR to drive your own business. Change that to another dealership doing the same thing and I think you'd see the outrage and compete on a different level...
From the OEM standpoint, dealership brand names offer a group of keywords that would return a high level of traffic. After investing millions into web platform development, especially serving higher funnel customers, I'd do the same thing in their shoes. Last time I checked dealerships are still doing a horrific job serving the needs of people actually "thinking about it." We understand that as a reflex objection and try to drag them to the transaction phase because that's what we know. As an OEM I'd do this over and over and worry about the dealer complaints later, if they ever come.
I am going through the same thing with GM. I do not have a Cobalt site so I am bidding against them. None of the OEM's get it. They are making it cost more for us and them. They are assuming that most dealers are not digitally savvy which is partially correct and they are not making special consideration for dealers that do get it and do not want to follow their lousy digital strategies...In some cases I feel this violates the dealer franchise agreement...In my case if someone goes to chevrolet.com and searches my zip code my store and inventory shows up. If someone makes an inquiry on one of my cars I do not get the lead because I do not have a Cobalt site. No one from GM has answered me about where the lead goes...
Discuss OEM SEM Bidding on a Franchise Store's Name in the Websites, SEO, SEM, and Internet Marketing forums; Are dealers REALLY ok with this kind of behavior from the OEM?...
What is there to discuss?
It is what it is, everybody still has to find a way to steal a bigger piece of the pie!
I personally never worried about the small things, we know the markets better than the OEMs.
To me, the data in the chart below is all I need to see to convince me that going after long tail is the best option for every car dealer out there. This data indicate that you are actually better off being #7 in the SERPs with a long tail phrase, compared to being #2 with a head (1 or 2 word) phrase. The long tail in the #7 position will get 6% of the clicks, while the shorter phrase at #2 will only get 5% of the clicks. You will get 5 times as many clicks for a long tail in the #4 position compared to the short phrase in the same position!
Also you will get a higher conversion rate with the low hanging fruit.
This is what CarGurus is famous for. Good luck!