Opinion: Car Dealers can sell more cars with fewer leads. (Especially Third Party)

Want to Sell More Used Cars Than Ever Before? Reduce Your Dependence on Third-Party Lead Providers in their entirety. 

Alright, I ask that you be completely honest. Please. 

Does this sound like you:

Add Cars.com, then take it away, then add Autotrader, then take it away. Then go all-in on Cargurus, then Edmunds, but not True Car. Wait! All my competitors are on True Car. 

Dealerships have a fear that they won’t have enough leads. Their salespeople are not busy enough so they absolutely have to have more leads, regardless of the quality. 

To add to this, when the consumer goes through a third party, those 3rd party companies are better at keeping their customers than most local dealerships. They are going to do everything they can to get them back and they’re going to stalk that buyer for when they come back into the process. You can be their resource!

You have a specific goal: sell more cars and make more money. It’s not about working more (often less quality leads). Now granted, when those leads turn off it can feel like the faucet is turned off. This is an important issue at the dealership that is worth acknowledging, but you need to be sure that you don’t panic and throw money away just to get more leads. 


You have a specific goal: sell more cars and make more money. It’s not about working more (often less quality leads). 


Evaluation Efforts Needed!

We need a better way to evaluate. There are ways to do it, but it takes extra effort and more often than not some “outside the box” thinking. At a bare minimum, if you’re going to be on those third-party lead providers, make sure you’re doing it for the right price. Do you truly believe having those “skyscraper” ads and other add ons are creating more opportunities for you? Below is an example of what you’ve probably done many times in the past, aggregating your leads and closing percentages so value the lead source. Something I want you to add is doing this before and after you turn a source off. That level of detail is where most dealers miss some value. Remember that afterward is even more important than when the lead source is running due to the fact that most of the providers tell you there is “residual value” you’re not accounting for. Well, you can in fact prove that if you track how your other lead sources were affected after turning a source on or off. 

We have found that even when we’ve turned them on and off over a dozen times to see the cause and effect, we’ve never been able to find definitive evidence to see the added value.

Some facts, and some suggestions (based on our extensive experience)

  • You can do a better job evaluating your lead flow than third party companies and you do not need to listen to your rep about ancillary buyers coming in that are not measured in your “lead count.” Cox Automotive confirmed what we understood: Many buyers are heavily marketed by third party providers and people love starting their experience on those sites. While that may be true, your buyer loves finishing and making quick decisions on local dealership sites.”
  • You can cut the fat and pay the true value of the lead source. We have not proven any loss in opportunity from purging out all ancillary products and just having inventory listed. In fact, in working on Toyota of Katy back in 2015 they were the top CPO Toyota Dealer in Texas AFTER shedding over $200,000 in annual spend with AutoTrader. 
  • It’s also completely understandable that you would like to see your salespeople with higher lead volume, but I’d at least leave it up for debate. If they normally get 85 leads per month and close at 11%, why not get them 70 leads per month closing at 17%? That’s a very doable closing percentage and we’ve seen a salesperson increase to 21% with this model. 
  • Personalization is more important than ever, important as ever especially with used cars. 
  • Ensure you have a follow-up process for leads that hit eight (8) days. Once they hit eight, treat them differently. Those people are in the last stage and they’re busy. Most importantly, they are still in the market for a vehicle the majority of the time. 


Your buyer loves making final decisions on local dealership sites – not third party sites. Make it really easy to do so. 

A few stats from the stats of five local car dealerships:

  • The average length it takes to close a CORE lead (Dealer Website Lead) is 2 days, or 48 hours. 
  • The average length it takes to close a 3rd party leads is 3.1 days, or 74.4 hours. 


PLEASE: Don’t leave out your community

Once you’ve purged some of the money spent on third-party sources, spend the money on getting new core customers and developing community relationships. 

From what I’ve witnessed over the years, the community efforts are normally left out due to the fact that gratification takes too long. This quote from one of my clients at a local Toyota dealership, “Dealers can’t see outside of this month, so doing a great job with current customers and community will rarely be something you see. If it’s not selling me cars right now, I know tomorrow isn’t guaranteed so I can’t put money towards it.” That money will pay off if planned correctly. 

But to be valued by your customers you need to show you care about the community where they live. We have seen this pay off time and again in the form of loyal customers buying again and again from the same dealership.


To be valued by your customers you need to show you care about the community where they live.


In closing: Third-Party Lead Providers are not bad, just don’t depend on them. 

  • The average gross per vehicle is higher with CORE* leads and it’s significant. On average, CORE leads make 25.5% more money per vehicle than third party leads. To add an additional perspective, at a dealership that sells 1200 used units annually, they would gross $391 more per vehicle or $469,200 in total. 
  • As mentioned above, CORE leads also close faster and generate more referrals than Third Party.
  • Remember that those who come through your website and create a relationship with you are three times more likely to become a long term customer and ALSO refer more people to you.
  • CORE Leads: Leads in which have been attributed to your website including but not limited to form fills, phone calls, and chat leads
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