CarGurus has become the latest third-party shopping site to allow dealers to place its rating of used-vehicle prices -- shown as "good deal" or "great deal" badges -- on a dealership website's inventory pages. Dealers may choose whether to include the "fair deal" badge on qualifying vehicles.
CarGurus isn't unique. For example, Kelley Blue Book's Price Evaluator, which shows where the asking price ranks within the range of recent local similar sales, can be found on dealership websites as well as KBB.com.
Bob Cockerham, a partner at University Volkswagen-Mazda in Albuquerque, N.M., said his customers want CarGurus' badges.
"If you don't have on your website the same tools that customers can get anywhere else online, there is a disconnect," said Cockerham. His dealership site has shown the badges for about three months.
"For our customers on CarGurus who then go on our website and see CarGurus [badges], it's a huge validation," he said. For example, last week Cockerham advertised a 2014 Buick Encore for $19,000. The listing bore the CarGurus logo with "great deal" and an arrow pointing up.
Andrew Grochal, CarGurus' director of product, said the program is free to any dealership that posts vehicles for sale on the CarGurus site as a paid subscriber or has the company's basic package.
CarGurus began testing the ratings badges early this year in response to dealers' interest, he said.
CarGurus' algorithms analyze the prices of 4 million to 5 million vehicles nightly to determine an instant market value, which is what CarGurus deems a fair market price. The price is based on factors such as mileage, make, model, trim level and optional equipment. The system then compares that figure against a dealership's price to determine a vehicle's price rating.