How technology is helping used car dealers earn trust and stay competitive

Posted by Meg Bernazzani on April 19, 2018

Putting the consumer first is a win-win for customers and dealers

Purchasing a used car can be a nerve-wracking experience, especially when you’re unsure of the car’s exact value. Still, used car sales are growing at a faster pace than new car sales in the U.S. as the car shopping process becomes increasingly digitized—95% of consumers use digital as a source of information.

New technology, including what’s offered through third-party marketplaces, is also playing a big role by helping to make the used car buying experience easier and more transparent. A recent study showed over 80% of shoppers visit three or more websites to research their next car purchase1—highlighting the need for car dealers to focus more on engaging consumers through online channels.

Third-party marketplaces in particular work well because they put the customer’s needs first by providing detailed vehicle information and comparison tools. The best sites provide comparisons, allow shoppers to sort cars by value, and make it easy for users to see unbiased dealer reviews after they’ve drilled down to the cars that match their budget and taste. A recent survey conducted by CarGurus showed 80% of participants won’t buy a car without transparent, third-party information about its market value.2

Best deal first delivers the best experience for shoppers

Used car shoppers have one thing in common: they’re looking for value on a vehicle that fits both their needs and their lifestyle. With so many used cars to choose from, it can be difficult to narrow it down.

Technology like CarGurus’ Instant Market Value (IMV) helps consumers find the best deal first, based on their individual search criteria. IMV is an estimated fair retail price for a vehicle based on a detailed analysis of comparable listings in a local market. CarGurus computes and updates its IMV calculations every day using a complex algorithm based on millions of data points. CarGurus’ IMV provides the pricing transparency shoppers need to feel confident they’re getting a good deal.

The lowest price doesn’t always mean the best deal. To calculate deal ratings, CarGurus compares the asking price of a vehicle to the IMV, factoring in dealer reputation too. From this calculation, CarGurus rates the quality of the deal and categorizes it as great, good, fair, high, or overpriced.

Search results on CarGurus are ordered by deal rating, not how much a dealer pays to be listed first, which ultimately means greater transparency for CarGurus shoppers. Consumers also have access to powerful search and filtering options, such as lowest/highest price, newest/oldest car by year, mileage, and distance to dealership. They can also receive emails when the price of a particular make or model drops, or when new listings come up for the vehicle they’re looking for.

Build trust through transparency

Consumers don’t necessarily want the absolute lowest price when shopping, they just want to feel confident that they’re getting a good deal from a transparent and trustworthy seller—62% of CarGurus shoppers say that knowing what a car is really works makes them more confident to buy.3

To get this validation, consumers are spending more time online conducting research. Almost 50% of CarGurus shoppers say online car reviews and research sites are the most important sources of information when compared to other sources such as family and friends, dealership visits, past experiences, and advertising from manufacturers and dealers.4 When determining whether a website is trustworthy and transparent, independent pricing information and customer reviews are crucial.

Trust leads to sales

Today, more than ever, trust and transparency are central to the car shopper’s journey. Shoppers are looking for great deals from top-rated dealerships, and dealers need to stay on top of these trends in order to stay competitive in an increasingly digital world.

CarGurus helps bridge the gap between dealers and consumers by providing transparent information on the value of a car, easy-to-understand search results pages, and unbiased dealership reviews. When dealers use CarGurus’ technology to increase transparency, they’re putting consumers first, which helps build trust and ultimately helps boost sales.

1CarGurus Consumer Survey, n=2,000, Sep ‘16

2CarGurus shopper surveys with 1K to 2K respondents

3CG Consumer Segmentation Survey 2017, n=661

4CarGurus Consumer Survey, n=1,000, Jan ‘16

Topics: CarGurus info, IMV