Cars.com, one of the top three U.S. automotive sites, has unrolled emergency discounts for dealer clients while also suspending its outlook for this year’s revenues.
Cars.com announced it would give dealer clients 50% off their April bills and 30% off their bills for May and June. The move responds to the Covid-19 outbreak and follows an announcement last week by top U.S. auto site CarGurus, which is giving its customers a month-long 50% discount for its ad service.
“Our dealer customers are facing unprecedented and uncertain near-term business impacts,” Cars.com CEO Alex Vetter said in a statement. “Due to the unique circumstances with every customer, we are offering a range of flexible solutions including immediate financial relief as well as expanded digital retail solutions to address today’s shopper needs.”
Along with the rate cuts, Cars.com has also rolled out some new, no-cost features intended to spur traffic and sales leads at a time when shoppers are unwilling to visit dealerships in person. These include home-delivery and virtual-appointment badging, chat and video.
Cars.com had $606.7 million in revenue in 2019, and in its year-end financial report, it predicted 2020 results would equal that or decline by as much as 4% year-on-year.
Although the company has not given a dollar estimate for the impact of the dealer discounts, it is likely in the tens of millions.
At the end of 2019, Cars.com counted 18,834 dealer clients and reported average direct monthly revenue per dealer of $2,070 U.S.
If these numbers still hold — which would be an optimistic case given the current crisis — the total financial hit from the discounts alone would amount to nearly $43 million.
In AIM Group’s most recent automotive annual, we reported Cars’s revenue was nearly even with Autotrader.com’s for 2018, with CarGurus trailing in third place. However, in Q4 2019, CarGurus’s revenue surpassed Cars’s for the first time ever. (Autotrader, as part of privately held Cox Automotive, doesn’t publicize its financials.)
In terms of web traffic, Cars.com had 24.5 million visits compared to Autotrader’s 24 million in February, according to SimilarWeb. CarGurus has long been the traffic leader, with last month’s number at 60.7 million visits.