CarGurus is looking to double its total addressable market by adding artificial intelligence-powered products that go beyond its existing automotive shopping site.
The company’s growing range of AI-powered solutions for car dealers will expand its addressable market to include not only the $3.5 billion that U.S. dealers spend on marketplaces but also the $4 billion they spend on software and data products, CarGurus CEO Jason Trevisan said Thursday (Nov. 6) during the company’s third quarter earnings call.
“We believe that our growing product suite positions CarGurus as an intelligence-driven partner that helps dealers optimize every stage of their workflow beyond simply marketplaces,” Trevisan said.
CarGuru’s latest product for dealers is PriceVantage, a used vehicle pricing solution that is powered by real-time consumer demand from the company’s car-shopping marketplace, according to a presentation released Thursday in conjunction with the call.
PriceVantage is a machine learning-based evolution of CarGurus’ earlier pricing tool and helps dealers improve their pricing, turns and profitability, Trevisan said. Using AI and the company’s dataset of shopper behavior and market supply, the tool provides turn-time predictions, lead potential, market-day supply and visibility into comparable listings. It then provides the dealer with data-driven pricing recommendations.
“Early beta results demonstrate the power of the software,” Trevisan said. “The most engaged dealers using PriceVantage saw a 5X improvement in turn-time compared to their top five competitors on CarGurus. Taking price-drop recommendations drove a 68% median increase in daily VDP [vehicle detail page] views, and 77% of recommendations met or exceeded predicted sales velocity outcomes.”
CarGurus also continued to add AI-powered features for car shoppers during the third quarter.
One, CG Discover, is a generative AI-powered shopping assistant that determines a shopper’s needs through its conversational interface and recommends vehicles that best fit those needs, Trevisan said.
“Research shows 80% of consumers are open to using AI in their car-buying journey, underscoring the scale of this opportunity,” Trevisan said. “Traffic to CG Discover has nearly tripled quarter over quarter, and leads have grown 3.3X.”
Another new AI-powered tool for consumers, Dealership Mode, extends the CarGurus experiences into the dealership, Trevisan said. This tool is designed to reduce the anxiety shoppers feel at car dealerships by providing them with real-time support in the form of vehicle pricing and ratings, a financing calculator and the ability to compare cars on the lot.
“Dealership Mode gives consumers clarity and confidence at the most stressful point of the process,” Trevisan said. “For dealers, Dealership Mode strengthens attribution and ROI.”
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