Kicking the tires at CarGurus
I don’t know about you, but after I buy a car, whether it’s used or new, I still have a sinking feeling that I could have negotiated a better deal.
Maybe I didn’t get the best price despite pulling pages of information from the many authoritative Web sites for car buyers — Consumer Reports, Edmunds.com, Kelley Blue Book, AutoTrader, etc.
These are all good, but recently I stumbled upon a site called CarGurus that helped put me more at ease about the deal I got on a used car my husband and I bought. We needed help shuttling our three children to various schools and extracurricular events, so this car will primarily be driven by our newly licensed 17-year-old. We also wanted something reliable for her to drive while in college and in the years thereafter.
We did all the usual things you need to do to shop for a car. First, we looked at our personal finances and came up with a budget, and we decided to pay cash. We narrowed down the type of car we wanted — a used Honda Civic — and did our research on its suggested value. We didn’t let anyone rush us into a sale even though we knew we might lose a car to another buyer.
Finally, we found a car that had all the features and options we wanted at a local dealer. We negotiated a discount off the Internet advertised price. We didn’t take the deal on the spot but gave ourselves a few days to think about it.
During our time out, I relied on my motto for big purchases: Check and then double-check before you write the check.
So I went back to the Internet to see what other pricing information I could find. That’s when I stumbled on CarGurus.
Like many such sites, CarGurus offers lots of free information about new and used cars. But what makes the site unique is that it specifically says if it thinks the advertised prices are great, good, fair, poor or overpriced.
CarGurus uses mathematical algorithms to analyze the available vehicles and then rank the listings from best to worst. The analysis is based on what the site calls the “Instant Market Value” of a vehicle, which is determined by looking at similar, current and previously sold car listings in your area. The site compares the listed price against the instant market value to come up with your savings. The listings also take into account factors such as dealer reputation, accident history, options, mileage and the condition of the car.
The site was launched six years ago by Langley Steinert, the former chairman and co-founder of TripAdvisor, which is a popular search company that helps people find the best travel deals.
“The reason the whole idea came about was I was looking at the online travel space and asked why isn’t someone doing the same thing for autos,” Steinert said in an interview. “Someone should be focusing on the issue of price and figuring out what is the best deal.”
You search for cars using your Zip code. The listings that rank the vehicles also include how long the car has been on the market and a price history.
Steinert said the company makes about $15 when a customer contacts a dealer through the site. The dealer pays the fee for the lead, not the customer. The site also allows private sellers (non-dealers) to list their car for free, but the great majority of listings are from dealers.
“No one is paying us to put the cars in any particular order,” he said. “We put the listings in the order that has the most savings for consumers.”
During my search on the site, I saw the very car we had settled on. Based on CarGurus’s analysis, the Internet deal the dealer had listed was a “fair” price. That meant there was room to get an even better price than the discounted one we were offered. I noticed on CarGurus that the dealer had dropped the price of the car twice within 30 days. The day I did my last search, during our timeout, the price had dropped again — two days after we had gone to see the car.
We called the dealer and asked the salesperson to apply the discount we had negotiated to the lower price. They agreed. We bought the car.
Based on CarGurus’s instant market value, the final price we paid bumped our deal up to “good.” We drove the car off the lot feeling good about our purchase.
Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or firstname.lastname@example.org. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.