How Google Is Horning In on Car Dealership Sales

  • Share
  • Read Later

Usually, to get a price quote from a car dealership, you must disclose your phone number and an e-mail address—an act that comes with the risk of being hounded by car salesmen. A new car-shopping tool being tested by Google changes how the game is played.
Automotive News reported that a car-shopping service from Google, currently in beta in parts of northern California, will spread throughout the state by the end of the year. It’s expected to roll out nationally after that.

The service allows web searchers to locate specific vehicles on local dealership car lots, each with a red “Get Quote” button. Click on the button, and the corresponding car dealership will send a price quote for the exact vehicle (VIN# and all) to a proxy e-mail address or phone number. Google will forward messages regarding price quotes to the intended recipient, who never has to give the dealership a personal phone number or e-mail address. The only personal information dealerships get regarding customers is a first name. Google will also limit how many messages the dealership can send to the person requesting the quote.

(MORE: How Car Buying Is Becoming Less Awful — Or At Least Less Time-Consuming)

From the consumer standpoint, the service seems like it should be an especially fast, convenient way to retrieve new-car price quotes without worrying about the hassles of relentless sales employees. Car dealerships, which pay Google $10 and up for these sales leads, have reason to be worried about the search giant inserting itself in between them and their customers, and not only because it could drive prices down as consumers find it easy to shop around. Normally, a consumer must log in and disclose personal info at a dealership website in order to access the dealer’s inventory and request a quote. One dealership employee expressed his aggravation to Automotive News about Google’s new service:

“We work very hard to make our Web site informative, and Google is discouraging customers from going straight to our site,” said the Internet manager of a Midwest dealership group who asked to remain anonymous.

Google’s service could also wind up stealing web traffic away from other sites built for researching and buying cars, including Edmunds.com, Cars.com, and Autotrader.com. Nonetheless, some car dealerships are jumping on board with Google, because they know that’s where the shoppers are; by some account, two out of every three visitors to a car-dealership websites arrive there via Google.

According to Wired, the new Google service already accounts for 6% or 7% of the sales leads for dealerships such as Toyota Sunnyvale in California’s Silicon Valley. Michael Shum, Sunnyvale’s general manager, calls the figure “significant.” He’s reportedly a fan because of how much sales traffic Google can generate, and because the service is quick and up-to-date. As soon as a car arrives on the dealership lot, it begin showing up in Google’s searches. This may explain why Sunnyvale pays Google about $22 per lead for cars, and $26 for trucks, which is slightly higher than the $20 average it pays for other kinds of sales leads.

(MORE: Luxury Wheels, Honda Price: New Breed of Upscale Cars Selling for About $30,000)

If the service spreads, Google could become an enormously powerful middle man between the parties selling and buying cars. Wired notes that the shopping tool puts Google “just a step away” from being a partner in the actual selling of cars. Regardless, due to a host of rules and regulations summed up in an NPR segment last month, consumers will probably always have to deal, quite literally, with car dealerships every time they hope to buy a new vehicle.

7 comments
carworld
carworld

More consumers are on AutoTrader.com or Cars.com before ever reaching a dealerships website - they only use Google to find the name of the dealership for a car they have located elsewhere. Read up on the stats out there before giving Google all the credit.

mrmikebailey
mrmikebailey

I encourage this method but there are still a lot of problems with it. Full disclosure, I work for AutoRef.com, a website that does a very similar service for used vehicles. The biggest problem is with dealer data collection. Often times dealers don't take the best photos and list inaccurate features for a certain vehicle. And then dealers don't update their inventory and list vehicles that have already been sold. You should be talking with a car salesman so that you can get as much information as possible about the vehicle and know that it's in stock. But you should also have privacy and be able to end a conversation if it isn't to your liking, and that's exactly what our service does. I also recommend test driving as many cars as possible because a lot of the time you don't know exactly what you want until you find it. I've seen this happen with many friends and family. Anyways, happy car shopping everyone. 

mikefingado
mikefingado

But can Google deliver? Literally like @ Tred.com

PierreHemmerle
PierreHemmerle

Once again, our legal system looses ground to uncontrolled private activism. Tomorrow, we'll have the same private uncontrolled operators taking on the bank, the insurance and the likes. But then, where is a vacuum, no one can thrust a blame.

Pierrre Hemmerlé

TheCarCzarsPage
TheCarCzarsPage

So much for the rest of the vehicle leads business. Google wins!