Car dealers are starving for used vehicles. A growing number of consumers want to buy and sell their vehicles without entering a traditional dealership.
So CarGurus
Here’s how it works. Interested sellers can go to https://cargurus.com/sell-car/.
Enter the vehicle identification number, make, model, year, mileage, trim level, the vehicle’s condition and a location where CarGurus’ third-party logistics partner can pick it up and deliver to the dealer.
Then, in a matter of minutes, the seller will receive the highest offer from among thousands of dealers who have access to the buying matrix. The seller is then paid after the vehicle passes an on-the-spot inspection.
Access to the site is free for consumers. CarGurus has about 36 million visits to its site each month, according to spokesman Brian Kramer.
The new service launches today in Massachusetts, Florida and Texas.
“Consumers want to do more of the vehicle buying and selling process online, and that has accelerated during the pandemic,” said Lisa Iannucci, CarGurus vice president for commercialization.
Dealers are scrambling to find any available used cars in decent condition.
CarGurus’ data shows the average used vehicle price exceeded $28,269 in June, up 38.6% from a year earlier, while the average new vehicle sold for just under $42,000 in June, or 11.2% than a year earlier.
The ongoing shortage of semiconductors is the major factor reducing new vehicle production and availability. How long shortage lasts is hard to predict.
"We're seeing a unique market where a limited supply for new vehicles, courtesy of the microchip dip, coupled with high demand for private mobility coming out of COVID,” said Kevin Roberts, CarGurus’ director of industry analytics.
Historically, late model wholesale vehicles are acquired by dealers through auctions. But the lingering impact of the Covid-19 pandemic has reduced the number of dealers attending auctions, although they can continued to purchase used cars online.
Auctions have been primarily a dealer-to-dealer marketplace. CarGurus sees an opportunity to open up the consumer-to-dealer market.
Dealerships must be part of the CarGurus/CarOffer network to participate in this program. Those currently not part of the network can read more about this new offering on CarGurus’ Dealer Resource Center (dealercenter.cargurus.com).
“When you are an independent dealer, your time is spent mostly sourcing vehicles,” said Danny Archibald, a used car dealer in Kennewick, Washington. “CarGurus and CarOffer, combining forces, can use the instant market value of CarGurus in an effort to help us source vehicles. They also provide us with a lot of data as far as what’s selling in our area.”
CarGurus reported operating income of $25.8 million on revenue of $171.4 million in the first quarter of 2021. The company will report second-quarter results Aug. 5.
