Dealership Marketing

Is AutoTrader getting ahead of themselves?

Jeff Kershner
Posted onMar 25, 2006 at 1:26 AM
Updated onUpdated on Oct 25, 2019 at 7:13 AM


Autotrader has introduced their 2006 Market Adjustment pricing and I personally think they are getting ahead of themselves. On average they have hiked their rates anywhere from $800 to $1500 over the 2005 pricing depending on what market you’re located in or what package you sign up for. With the new inflated pricing, they are trying to convince us that their “enhanced products” are worth the extra money. But I don’t think so!

They’re pushing their new “Find Your Dealer”,a dealer search tool found on the homepage providing easy access for consumers to find your “enhanced dealer information” pages. Basically allowing consumers to search by dealer rather then my make and model. These dealer pages will allow you to add Specials, a photo of your dealership, services provided (Spanish speaking, incentives, rebates, etc.) and a few other small additions. About the only enhancement that I find of any value is the ability to list 27 photos. But then again… 9 photos is a decent number to generate a lead, plus it’s always an easy excuse for me to get the customers email address so I can send them a link to more photos and drive them to my website.

Here is my thinking…consumers go to AutoTrader to shop for vehicles, NOT to find a dealer. If they want to find a dealer they will google it or go directly to the dealers website. I’m sorry but I do not see the benefit in the new product enhancements especially for the additional money they are charging. Are you really going to sell anymore cars with a Dealer Search feature? Maybe having the ability to add some new and used car specials to a “Specials Page” can have a small benefit, but let’s face it…how many dealers update their specials page on their own dealer website?

They’re also offering 360 degree video tour? Come one…most of these programs suck up bandwith and are slow to load. Why do you need a 360 degree virtual tour when you get 27 photos anyways? I’m thinking this is nothing more then a way for allowing DealerSpecialites to charge for an additional 360 video shoot service.

Don’t get me wrong, I like AutoTrader and am very effective with it, usually selling 15-20% of our used car inventory a month with it. Though if I jumped up to the 2006 pricing, I truly do not think I would sell anymore cars. The only thing that is going to be affected is my cost per sale…and in a bad way.

None of this even takes into account that they want to charge the same amount for their New Car inventory search (being enhanced)! So go ahead and double that price for listing your New inventory on AutoTrader as well.

Sorry Chip Perry but this had to be said!

Any way…I could be totally wrong about this..it’s just my opinion what’s yours?

Jeff Kershner
Founder of DealerRefresh - 20+ Years of dealership Sales, Management, Training, Marketing and Leadership.
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While I'm Here Jeff;

Certainly, no one likes price hikes on products and services. However, the industry is headed in the direction of AutoTrader (would your experience in ISD Mgmt. have you figure so), and "up selling" is going to be the money maker of the future.

I cannot tell you how many dealer clients I have spoken with who have no earthly idea how to profit from their exploits in Internet Sales. But, most of these dealers are even getting hefty returns and numbers from their AutoTrader products.

Though, I am no proponent of any particular brand but the best one, I do believe you can get ready to hold your chair tighter when these representatives from the internet marketing companies hit your door from now on. In every industry sector (except automotive, as in dealers- imagine that), enterprises have consolidated in order to maximize profits. Usually, the first step is to cut overhead (flowery for lay off a few dozen folks, at least) and raise the prices of their products.

Don't be surprised by the move by AutoTrader. The name of the game is still Supply and DEMAND!

Prosperity be yours,

D. Ramonte Rawls, President
Auto Buyer Consultants
770.507.5733 Office
404.403.7476 Mobile

EA: [email protected]
WA: www.AutoBuyerConsultants.net
"The Future of the Largest Automotive Market Place..."
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This is interesting. We just experienced a 30% rate hike from Auto Trader in the Philadelphia Market in the Summer of 2005. I immediately started the cancellation process and July should have been the last month. After recieving an invoice for August I called and was informed that the cancellation letter had not been received...hmm?
I faxed the original copy of the letter as well as email dialogue with my local rep to the main office and the cancellation went through. In the meantime the local rep realised that he was not going to be able to convince me as to why Auto Trader was a good company for me to use, so he went around me and to the owner and the owner resigned for a non-premium package. The famous Auto Trader Plan B. (By the way when a vendor ignores my decisions and goes around me and to the owner I see red...Afterall, I was hired to sell more cars more cost effectively. This is my area of expertise not the owners. No offense Jr... It comes out of my Internet budget and ultimately effects my income.)

Now don't get me wrong here. Auto Trader has been extremely effective at other stores I've managed in the past, but it just doesn't work in my current stores. The list of reasons could start a lenghty converstaion.
The bottom line is Auto Trader is costing me about $300 per lead, and even if we do sell one or two cars I personally would rather spend the money on more cost effective marketing and drive more people to my websites.
I have great success with Automotive.com in this area ( West Chester, PA) and I think that Automotive.com does a better job of having an online presence.... By the way Automotive.com is only $500 per roof for their premium package.

Before reading this article I sent another email to the owner requesting he review the Auto Trader program with me again. I hope I can make them go away once and for all.
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I agree that the Auto Trader pricing is getting out of hand. We have to admit that the internet is changing the way we do business.....Period!
We live in a different world folks, it is evolving and we must evolve with it. Customers now have more info at their fingertips than most salespeople. Pricing, comparisons, ratings, etc. The list goes on. I find it hard to swallow that we are expected to shorten our deals and at the same time lengthen our expense reports.
We as dealers are allowing it and we are creating our own demons. Do I HAVE to accept the increases, ........NO! Must I evolve, ....yes, but it is time for Auto Trader and other web based companies to evolve with us.

Tim Hembree
General Manager
Universal Auto Mall
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To AutoTrader or NOT to AutoTrader, that is the question...

I've had pretty good success with them. Especially phone ups. I've worked for a much larger dealership than I do now and was on their $4200 per month (if I recall the exact number) and received tons of calls and pretty many leads. The problem is that all of my other providers combined are less than $4200 per month.

The dealership I'm at now sells 30 to 40 cars per month (total) so we're on a $1400 plan. I REALLY hate it when I do a search and get page after page after page of my competitors cars before I get to ONE of my cars. Somehow I still get leads or phone calls from them on occassion and I've figured out how to turn about 20-30% of these into sales but I've kind of come to the conclusion that you either go BIG or go home and I'm seriously considering going home. We have a GREAT REP and they are constantly calling me to offer me Cincinnati Red's baseball tickets, giving me advice, even offering to come out and put comments on all of my cars for me (I have a decent CRM tool from ProMax that does this FOR me so about 95% of my cars have some sort of comment and 98% have pictures per their advice).

I've also had great luck with AutoByTel (who only charges when I get a lead), Cars.com and IMotors leads and they only get paid for performance (an actual lead) and are pretty quick to credit me if I have a "bad" lead with both a bogus number AND bogus email.

Our owner has been burned in the past and doesn't like long-term contracts (he's currently paying more than he should for several services just to have the advantage to cancel they don't perform). I didn't like this at first but it makes it pretty easy to dump someone when they don't work out!

I'm still debating on AutoTrader but my opinion is you have to go big or go home and I don't like either alternative (unfortunately AutoTrader is a powerhoue that most people know about and use to buy a car) and they have GREAT commercials on TV so for now, I'm sucking it up at $1400 per month. Hopefully I'll keep selling more cars (I just hired someone who hasn't sold cars in the past and he sold his first car TODAY!) and I'm training someone who has 3 years experience in the car biz at our second store. Eventually I hope to get out to our third store (its about 30 miles from "my" store) and work with their GM who is doing a pretty good job on his own working the internet. Hopefully I'll be able to justify "top billing" in a month or two so I can fully leverage AutoTrader.
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    anonymous
  • July 19, 2006
I know this post has been up for a while, and was actually circulated around the office a couple months ago. Not from the upper level management, but I assure you it eventually reached them, including Chip Perry. Yes, I work for Autotrader.com and have for years. This may be shocking to hear, but even from an inside perspective, I do feel we are getting ahead of ourselves. Change is part of any company, especially a large company, and as sales reps we've had to adjust accordingly over the years. Lately it seems like the company is getting unbelievably greedy. If we go a week these days without some sort of change we start to wonder what's wrong. Changes are on two fronts: for you the dealers and for us the sales reps. Pricing, as you know and mentioned, is always increasing based on added features. Compensation on our end is also changing, sometimes directly and sometimes indirectly, but the bottom line is that someone has created a monster. The company is losing great sales reps, some like myself who have been with Autotrader.com for several years. Top producers are being shafted on a monthly basis. I don't want this to seem like a disgruntled employee ranting (after all, I am still working there), but rather an illustration of how the company is changing on all levels. Autotrader.com is in the business like everyone else to make money, and believe me we are. The double-edged sword analogy holds true here. Unfortunately for you the dealer, Autotrader.com is still the 800-pound gorilla in the marketplace, and sometimes you just have to bite the bullet and do what the 800-pound gorilla says. On the plus side that 800-pound gorilla helps to sell more cars than the closest 5 competitors combined and is still extremely cost-effective. I'm keeping this anonymous for obvious reasons, but know that some reps do put your best interests first, before company profits which we're seeing less of, and some of us do stand up for you.
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    amit
  • September 21, 2006
i would be on autotraders side on this one. These guys are one of the most popular out there and they do get business for most dealerships. More and more DMS systems are adding the upload to autotrader feature so that the dealer saves time.
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I fired Autotrader earlier this year due to cost/lead & cost/sale. They got back in the dealership a few months later, hat in hand. Now, at my new dealership, we are in a premium agreement paying over $4000/mo for roughly 45 contacts and 2 sales in November that lost $650. That is really diffilcult to say no to, but obviously, I am cutting them back to the lowest level if I don't cut them altogether. They are the 600 pound gorilla acting like they have the run of the jungle, but they don't. There are plenty of other lead providers out there, including eBay. If you are not counting on eBay as a lead provider, you're missing the boat. Autotrader will spout numbers as to how many more cars are sold on Autotrader than eBay, but what they fail to realize/mention is cost/lead and cost/sold is substantially lower, AND you're exposed to an Internationaly market (if you so choose). $4,000? Let me list 400 cars on eBay and really make some sales.
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