Monday, 27 October 2014 00:00

CarMax Returns to AutoTrader and Cars.com After Year-Plus Gap

After a 16-month lapse, CarMax Inc. started posting inventory on Cars.com and AutoTrader.com in October 2014, according to reports by David Barkholz, Automotive News.

Although third-party shopping sites reach a wider audience than some of the most well-known auto groups, according to senior automotive analyst at Bloomberg Intelligence Kevin Tynan, the fees can be a deterrent.

Various dealers vouched it can cost anywhere from $3,000 to $25,000 a month to get a prominent online position on Autotrader.com or Cars.com. The price depends on the advertising package and the amount of vehicles listed.

An anonymous dealership group executive stated that he knows of a store paying $16,000 a month to list 150 vehicles on AutoTrader.com.

Barkholz reported that Carmax's most recent earnings report states, although the company's net profit and revenue jumped more than 10% in its fiscal quarter ending Aug. 31 vs. the year-earlier quarter, total vehicle sales at the company's stores open at least a year stalled at 0.2 percent year-over-year growth.

Tynan believes that CarMax Inc stopped using these particular sites because of slow sales during the recession, which led to a low supply of available used vehicles. Now that more late-models will be coming off leases in the near future, these websites are once again profitable.

CarMax and AutoTrader.com declined to comment, according to Barholz.