Auto Dealers Say Shopping Sites Encroaching
AutoNation Inc. and other dealers are worried about more than the rising cost of leads from third-party car-shopping sites. They see other signs that the sites want to encroach on their turf.
The big shopping sites, AutoTrader, Cars.com, Edmunds and TrueCar, are trying to branch into finance, trade-ins and service, which are big money makers for dealerships.
AutoTrader, for example, guarantees the price of trade-ins at participating dealerships. But, according an Automotive News report, dealers typically want to control all negotiations over used vehicles.
Also, TrueCar noted in its registration to go public that it plans to offer its shoppers new products: TrueLease, TrueLoan and TrueTrade.
“It’s not just the price pressure” on new-vehicle leads, AutoNation COO Mike Maroone said last month. “It’s now the entry into other areas of the business — trying to get dealers to bid on trade-ins, trying to get them to compete for service business.”
The third parties argue that they are making life easier for participating dealers by channeling customers to them for products that shoppers desire.
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