Third-Party Marketplaces Worth Your Money?

I have a conversation almost every week that goes something like this.

A dealer principal or GM pulls up their advertising report, gets to the line items for AutoTrader, Cars.com, and CarGurus, and says:

"We're spending $20,000 a month with these guys. Do I really need them?"

I've been in and around dealerships for twenty years. I've sat in 20 groups, reviewed hundreds of advertising budgets, and watched the digital landscape shift under dealers' feet more times than I can count.

Here's what I've learned from that vantage point: most dealers are making major advertising decisions based on data that's been filtered through someone trying to sell them something. That's not an accusation — it's just the reality of how information flows in this industry.

I'm not an advertising sales rep. I have no affiliation with any third-party marketplace or advertising agency. But I talk to all of them regularly on behalf of my clients — which means I hear both sides.

My goal with this series is simple: cut through the sales jargon, the tech acronyms, and the skewed performance data, and give dealership operators a straight read on digital advertising. No agenda. No vendor spin.

We're starting with the question that comes up more than any other right now — third-party marketplaces. Are they worth it? Let's actually work through it.

First, Let’s Get Clear on What You’re Actually Buying

Most dealers think of marketplace listings as lead generators. You pay the monthly fee, leads come in, you work them. That’s the mental model.

That mental model is wrong — and it’s costing dealers money because of it.

Here’s a better way to think about it. Imagine you make the best barbecue sauce in the state. You could sell it out of your own store. But if you can get it on the shelf at every grocery chain in the region, suddenly millions of people who’ve never heard of you walk past it every week.

That’s what a third-party marketplace does for your inventory. It puts your vehicles in front of people who are already shopping — people who may never have found your website on their own.

Between 75% and 93% of car buyers visit a third-party marketplace during their shopping process. More importantly, 61% of buyers start their search on a marketplace — not Google, not your website. A marketplace.

That means the majority of buyers in your market aren’t beginning their car search by looking you up. They’re going somewhere they can compare your inventory against twenty other dealerships in about thirty seconds.

If your vehicles aren’t there, those buyers don’t know you exist.

This is distribution. Not advertising. And that distinction matters when you’re deciding whether to cut the budget.

This is especially true for stores that are used car focused. Unless you've built a brand presence as the used car source in your local market, most customers won't think to look to you for off-brand vehicles.

What Happened When One Group Actually Tried to Leave

Let’s talk about what happened when a real dealer group actually tested this.

Sutherlin Automotive — a large multi-rooftop group — made the decision to pull their entire organization off third-party marketplaces. They redirected that budget to Google, social media, and their own digital channels.  Brett wrote multiple articles about this.

The initial savings were real. Roughly $200,000 a month.

Two years later, they came back.

Their conclusion after two years of real-world data: to replicate the search visibility and shopper traffic that the marketplaces had been delivering, they would have needed to spend approximately ten times their old marketplace budget through other channels.

Ten times.

Not double. Not triple. Ten times the budget to replicate what the marketplaces were doing.

That’s not because marketplaces are magic. It’s because these platforms have spent years and hundreds of millions of dollars building search authority that individual dealerships simply cannot compete with quickly or cheaply.

When someone searches “used F-150 near me,” AutoTrader, Cars.com, and CarGurus own those results. Beating them organically takes years and serious investment. Beating them with paid search gets expensive fast.

The Sutherlin experiment doesn’t mean you can never reduce marketplace spend. It means you need to understand what you’re replacing it with before you pull the plug.

Your Data Is Probably Lying to You

Here’s where it gets interesting — and where most dealers are flying completely blind.

Most stores use your CRM to track where leads and sales are coming from. The problem is your CRM uses what’s called “last-click attribution.” It gives 100% of the credit for a sale to the last thing a customer clicked before filling out a form or calling the store.

Everything else the customer did along the way? invisible.

Think about how an actual car buyer shops today.

They spend two weeks browsing Autotrader, CarGurus or Cars.com on their phone comparing trucks. They save a few vehicles. They look up your reviews. They Google your dealership name. They click your Google ad. They fill out a form.

What does Google Analytics tell you? Google Ad gets the credit. Autotrader, Carguru, Cars.com gets nothing.

Clarivoy’s data tells a different story. When they applied proper multi-touch attribution, tracking every step of the buyer’s journey instead of just the last click, the numbers shifted dramatically.

Conversions attributed to Cars.com jumped 37%. And the measured cost per conversion dropped 20%.

The marketplace wasn’t underperforming. The tracking was broken. And dealers were making six-figure budget decisions based on broken data.

Clarivoy also found that AutoTrader influenced approximately 55% of vehicle sales in their U.S. test set — far more than single-touch attribution models had suggested. Meanwhile, research across 160 million monthly U.S. shopping sessions confirmed that buyers are increasingly skipping search engines entirely during the consideration phase, going straight to marketplaces after seeing an ad.

That’s a real behavioral shift. And it has real implications for where your budget should be going.

The Premium Package Question

This is the part the marketplace rep really doesn’t want to get into.

Here’s what the research actually shows: there is no publicly available data proving that premium marketplace packages produce better return on investment than basic ones.

None.

What is proven is that being present on a marketplace matters. That’s well documented. But whether the $5,000-a-month featured placement package outperforms a $1,500 basic listing? Nobody has published credible data on that. The platforms certainly haven’t.

Marketplaces are very good at selling the idea that more spend equals more results. Sometimes it does. But sometimes you’re just paying more to maintain the same position you already had — and the rep knows your renewal is coming up.

My advice: start with a presence, measure your actual results, and make them prove the ROI of every upgrade they’re trying to sell you. Put it in writing. If they can’t show you the data, that’s your answer.

Not All Platforms Are Built the Same

Dealers often treat AutoTrader, Cars.com, and CarGurus as interchangeable. They’re not. Here’s how they actually differ.

CarGurus

CarGurus has broader inventory coverage than any competitor. There’s also data suggesting inventory listed on CarGurus turns 16% to 22% faster than vehicles listed exclusively on competing platforms.  In my research, I’ve read dealers feel CarGurus’ listing and pricing ecosystem is opaque—inventory can show up in ways the store doesn’t fully control or understand. 

Cars.com

Cars.com runs almost entirely on subscriptions. They have more than 19,500 dealer subscribers and claim to reach roughly 45% of all new-car shoppers. Their platform puts a lot of emphasis on comparison tools and deal ratings, which keeps shoppers engaged longer before they bounce.

AutoTrader

AutoTrader is owned by Cox Automotive and runs on tiered subscriptions. It’s deeply integrated with Kelley Blue Book and most major dealer software platforms — DMS, CRM — which makes inventory management less of a headache administratively. AutoTrader also claims that 69% of its shoppers don’t visit competing platforms. Worth noting: that number comes from AutoTrader. Take it with appropriate skepticism.

Different platforms perform differently in different markets. What dominates in Dallas might be an afterthought in Alabama. Your job is to figure out where your buyers are actually shopping — not which platform has the slickest sales deck.

The Problem Nobody Talks About

Here’s an uncomfortable facts that I haven’t seen anyone talk about

Part of the reason dealers feel so trapped by marketplace dependency is that their own websites are genuinely struggling. Not a little. A lot.

Recent audits found that 99.6% of the top dealership websites fail Google's Core Web Vitals standards. That's basically Google's report card for how fast and functional your website is. Fail that test and you get slower load times, worse organic search rankings, and more frustrated shoppers who leave before they ever engage.

And the numbers tell the rest of the story. The typical dealership website converts visitors to leads at around 1.5%. A well-optimized site should be hitting 2–5%. Best-in-class operators with strong conversion practices get above 5%.  Dealers are paying to drive traffic to your site and it’s only converting 1.5% of the traffic?  

Dealers aren't trapped by marketplace power alone. They're also trapped by the poor performance of their own digital showroom. A dealer with a fast, well-optimized website has real negotiating leverage with marketplace vendors. A dealer whose website barely works has none. The marketplace knows it. And they price accordingly.

So What’s the Verdict?

After twenty years in this business, here’s where I land.

Third-party marketplaces are not absolutely required. There are many dealers out there that prove you can survive without them. But they are probably the most cost-efficient way to reach a large audience of active, low-funnel shoppers — people who are already in buying mode, comparing specific vehicles, and close to a decision.

For most dealerships, that’s a hard value proposition to walk away from.

Here’s what the research actually supports:

• Presence matters. Being on a marketplace influences buyer decisions in ways your own website and Google ads cannot easily replicate at the same cost.

• Premium packages are unproven. Pay for the presence. Make them prove every upgrade with your own numbers before you write the check.

• Your attribution data is probably wrong. If you’re using your crm or standard Google Analytics to judge marketplace performance, you’re almost certainly undercounting their contribution.

• Your website matters more than you think. The stronger your own digital infrastructure, the more leverage you have in every vendor conversation.

• Not every platform performs equally in every market. Test, measure, and stay selective.

Treat marketplaces the way you’d treat any major vendor relationship. They should earn their place in your budget every single month. If they’re producing, keep them. If they’re not, renegotiate, downgrade, or cut.

But don’t confuse frustration with strategy.

Walking away from a channel that influences more than half of vehicle sales because the invoice feels high isn’t a budget optimization.

It’s just a different kind of expensive.

Source Notes

Marketplace usage statistics: Cox Automotive Car Buyer Journey Study. Confirm publication year before final print.

Sutherlin Automotive marketplace exit and return: sourced from dealer group public statements and industry reporting. Confirm primary source citation.

Cars.com attribution data (37% conversion lift, 20% cost reduction): Clarivoy multi-touch attribution study, U.S. market.

AutoTrader 55% sales influence: Clarivoy U.S. test set data.

160 million monthly shopping sessions behavioral data: Clarivoy U.S. research.

CarGurus inventory turn rate (16–22% faster): confirm whether sourced from CarGurus or independent research — note accordingly.

AutoTrader 69% exclusive shopper claim: AutoTrader-sourced. Flagged as vendor claim in article text.

99.6% dealership website Core Web Vitals failure rate: confirm audit source and date before publication.