Automotive shopping Web site CarGurus has launched a formula to sniff out potential bait-and-switch listings that lure consumers into dealerships.
Here’s how the scenario typically plays out for vehicle shoppers.
After seeing an online listing, a consumer visits a dealership to check on a specific vehicle only to find out that it’s already sold. Now that the consumer is in the store, the salesperson has the chance to make a new pitch.
The tactic can exasperate consumers and give dealerships a bad name even though only a few stores may use it intentionally, said Langley Steinert, CEO of CarGurus.
The Web site, which attracts 8 million unique visitors each month, compares and ranks car listings based on dealership reputation, make, model, trim level, vehicle history and other factors.
To protect shoppers from bogus listings, the company says its new formula uses mathematical models “that track typical selling patterns, then [identifies] online listings that have generated a disproportionately high number of customer leads without selling, indicating the listing is being used to bait a customer into a dealership.”
Bait listings on the Web site can garner 30 times the amount of leads of a typical vehicle listing.
The site will now block those listings from user search results.
“We’re trying to solve a problem that is being exhibited by a very small minority of the dealer community, but unfortunately is propagating this myth that all dealers are bad,” Steinert said in an interview. “What we’re trying to do here is erase this negative stigma that is being used as a broad brush against all dealers.”
Steinert said bait-and-switch postings are the second-most common complaint among users who leave negative reviews.
The No. 1 complaint, he says, is dealers responding too slowly, or failing to respond at all, to consumer lead inquiries. Consumers post nearly 300 dealership reviews on the CarGurus Web site daily.
The 2 to 3 percent of monthly leads that once went to bait-and-switch listings will now migrate to legitimate listings, Steinert said
He added, “We’re trying to clean up our site so that the 75 to 80 percent of dealers who do great work every day don’t have to suffer the stereotypes of this very small minority.”
The National Automobiles Dealers Association said that it is unaware of the problem.
“However, NADA is aware of the many issues that can arise for dealers and consumers when information is ‘aggregated’ from dealers’ computers, depending on the way that data is obtained and used,” the association said in a statement.
“In fact, NADA recently issued updated guidance to dealers about this type of data sharing, including a data addendum, made available to dealers … at www.nada.org/dealerdata. We encourage dealers to review those materials with their counsel and share with their vendors to ensure that this data is properly accessed and protected.”