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 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.
Dealers, not AutoTrader, ultimately will provide the ancillary services and products, such as trade-ins, and reap profits from them, said Dale Pollak, founder of vAuto, an inventory management tool for dealers owned by AutoTrader Group.
"We connect in-market shopper with dealers," Pollak said. "We don't sell any of those products to customers."
But dealers are still wary of the third parties' initiatives. AutoNation, the largest dealership group in the United States, with 229 stores, said last month it plans to beef up its own Web site and digital storefront to fight rising prices of leads from the third parties.
Bryan DeBoer, CEO of Lithia Motors Inc., said he also is keeping an eye on this trend. "I think they [the third-party sites] understand that we have profit engines in multiple avenues, and it's a way for them to extract some of that," he said.