DETROIT — On Wednesday, Ford Motor Co. began syndicating its dealers’ Ford and Lincoln new-vehicle inventory to CarGurus.com, a move that was announced on Monday in dealer memo obtained by F&I and Showroom magazine.
Inventory listings, which will include base MSRP, will be fed to the car-shopping site through FordDirect, which will also deliver CarGurus referrals to participating dealers through its New Vehicle Marketing Service. According to the memo, the goal of the new syndication is to drive “additional high-quality, VIN-specific leads for Ford and Lincoln dealerships.”
“CarGurus is one of the largest and fastest growing automotive shopping websites in the United States, with 15 million unique monthly visitors,” read the memo, in part. “According to CarGurus’ data, 80% of CarGurus’ visitors are in the market to buy and the website saw a 71% growth of unique monthly visits in 2014.”
Industry pundits like F&I and Showroom and Auto Dealer Today columnist Jim Ziegler have been critical of CarGurus and its business practices. In a June 2013 column published in F&I and Showroom, Ziegler wrote, “I personally view CarGurus as the most hostile, anti-dealer website yet.”
At issue is the way CarGurus rates dealers and their deals. “Labels, from my understanding, include ‘Great,’ ‘Good,’ ‘Fair,’ or ‘Bad’ dealers,” Ziegler wrote. “What gives the site the right to do this? And what standard is it using to rate these deals?”
The site did have a run-in with state regulators in Texas this past April. As reported by F&I and Showroom magazine, the Texas Department of Motor Vehicles Enforcement Division informed the site that the way it lists used-car prices on its site violated a state law prohibiting savings claims or discount offers in used-vehicle advertisements. The regulator, which threatened to fine dealers with inventory listings on the site, closed its case on May 11 after CarGurus made revisions to its vehicle price listings.
Ford’s memo did contain an opt-out link for dealers enrolled in FordDirect’s New Vehicle Marketing Service, which the memo said will be delivering VIN-based leads through the firm’s SalesPoint or other lead-management systems employed by its dealers.
In a statement emailed to F&I and Showroom, FordDirect said the new connection is about helping its dealers sell more cars. “CarGurus.com syndication was added because it is a popular consumer auto shopping website with more than 650,000 daily visitors,” the statement read, in part. “Dealers have the option to opt out.”
Founded in 2006 by Langley Steinert, the co-founder and former chairman of TripAdvisor, the Cambridge, Mass.-based firm reported in March that its dealer network grew by 300% on a year-over-year basis to more than 6,000 U.S.-based dealers. The company’s press release also noted that it uses proprietary algorithms to analyze and compare millions of car listings daily and ranks shoppers’ search results according to which listings “offer the best deals from top-rated local dealers.”
The car-shopping site, which gets inventory feeds from more than 100 sources, including inventory hosts, vehicle OEMs and other third-party lead providers, ranked No. 744 on Inc. magazine’s 2015 Inc. 5,000 listing, up from No. 779 in 2014. In 2011, the site was ranked No. 96.
According to a company spokesman, the site now claims more than 10,000 dealers in its network. As for its new relationship with Ford and FordDirect, the spokesperson said it does not have similar relationships with any other vehicle OEM.
“At CarGurus, we are always working to improve the shopping experience for our users, and this includes having the most comprehensive and accurate inventory of cars on our site. With new cars, this is especially important since our new-car search is VIN-based,” said Martha Blue, vice president of business development and marketing for CarGurus, in a statement emailed to F&I and Showroom. “By providing a better shopping experience, we are able to drive more leads and deliver greater value for our dealer partners.”
