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Monday, January 29, 2007

Will Cars Sell Better on Craigs List or Autotrader?

I wrote a post a while back comparing a few of the major players in online classifieds. I've worked for a few of these companies personally, and several of my closest friends are National level managers with the other companies, so I have some unique insight into each. One site I gave some opinions on was Autotrader.com. Another online classified site which was left out of the mix was Craigs List. If you're not yet familiar, Craigs List is a "no-frills" type of site with free auto classifieds. Their web traffic is among the highest of all sites, and continues to grow month after month. Currently they're the 9th ranked site in popularity in the U.S., ahead of even AOL.com, CNN.com, and Microsoft.com. Although they pride themselves on catering to individuals, many auto dealers have been using the site to sell cars. What better way to gauge the effectiveness (at least in my local market) than to actually sell a car.

For my experiment I purchased a 2000 Pontiac Sunfire GT for $700. After spending about $1100 to fix a few things (exhaust system, wheel bearing, radiator, power window) and a good detailing job, I was good to go. Into the car for $1900 and it books for a little over $4k retail, should be an easy sell this time of year.....an economy car at tax time.

Two days ago I placed an identical ad on both Autotrader.com ($55 "fully loaded" ad with 9 photos) and Craigs List (Free ad with 4 photos). I'll be updating this post frequently with feedback as to what sort of leads each site provides, and general sentiments.

As far as the listing process, both sites were easy to list and edit the vehicle. One area I feel is a real drawback on Craigs List is that my ad has already moved down the list considerably. Every ad that has been posted after mine is placed at the top of the list, so as time goes by I expect leads to fall off.

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Leads #1 and #2
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I received my first lead early Sunday afternoon. A younger sounding woman left a message saying she saw the car on Craigs List and had some questions about the vehicle. When I called her back 30 minutes later, her tone of voice told me she wasn't very serious about buying a car. She wanted to know the mileage (120k) and hung up. This brought me back to the days of selling cars and having to answer a lot of questions that I knew didn't matter in the long run.

My second lead appeared in my inbox this evening, again from Craigs List. One thing did catch my eye about this lead...the email subject. This person had somehow seen the ad I originally placed before my edit.....the ad I had up for about 2 hours two days ago before the price was corrected. Not sure how he found a price from two days ago that was fixed, but it could present a problem with negotiating price if he's a serious buyer.

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2 days and 2 leads, both from Craigs List
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Not much new to report on the leads. Maybe the used car market is really as bad as everyone says, or maybe just that not many people have received their tax returns yet and are ready to shop? I received one additional lead from Autotrader a couple of days ago. A gentleman called wanting to know how many miles were on the car. I told him, and he said he was shopping around for a first car for his daughter, and that he might call me back. The person who had previously emailed me sent another message saying he would check out the car this past weekend if it was still available, but he was a no call/no show. One thing that has proven a little annoying, and takes me back to the car sales days, is that I've taken the time to write a very detailed description about the vehicle, and the mileage is displayed prominently on both Autotrader and Craigs List. For whatever reason, people always ask questions that are already answered in the description. Just part of selling vehicles online I guess, but I have to wonder how many pointless calls are averted by having the detailed info on the ads. Surely I must be saving time by giving the details up front. This begs the question though: is it better to be as detailed as possible up front and weed out the non-interested buyers, or is it better to be vague and give myself the opportunity to sell more people over the phone? From a dealers point of view this depends on personal preference, but I'd rather let the car sell itself so I have time to focus on other activities.

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2 leads from Craigs List, 1 from Autotrader
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Well as a new twist on my experiment I re-posted to Craigs List to get my ad back to the top, and the listing on Autotrader has been cut down. I wanted to take a closer look at the impact a shorter (and more vague) description has. Sure enough, I got two calls from Autotrader shortly after modifying the description. Both people left messages, and when I called them back and left messages myself, they never returned my call. Found another car? Changed their mind? Who knows, but having SOME leads come in keeps hope alive for me that it will actually sell, and I imagine a dealer would feel the same way.

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2 leads from Craigs List, 3 from Autotrader
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Seems re-posting the vehicle on Craigs List has helped out. I have pretty much consigned the car through a local dealer I'm working with so interested parties can get financed on it, and also to see if Automart or Autoextra produce any decent leads. I received one call today from someone who sounded serious (off Craigs List) and actually showed up at the dealers lot where I've got the car sitting. Supposedly he'll be back tomorrow with a down payment. Another customer saw the car on Craigs List and filled out the dealer's online credit application, so things are looking good for Craigs List in this experiment. Hopefully I'll have the "dramatic conclusion" over the weekend.

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4 leads from Craigs List, 3 from Autotrader
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If you've been following this post for a while, you probably think I've forgotten about it. On the contrary! In the three months since first posting, there have really only been 7 total leads and the car is still sitting on the lot. Why isn't it selling? Is it a junk car? Probably. Is the market bad now? Perhaps. Am I trying to get too much for it? Probably. Am I holding out for my price? You bet! This car would not have sat in a dealer's inventory for this long unless they really didn't care about turnover rates. I'm not worried about cash flow or sales numbers, but if I were a dealer these things would certainly come into play. One thing that does surprise me is that Automart and Autoextra have not produced any leads at all. The original purpose of this post was to compare Autotrader and Craigs List, so maybe it's not fair to throw AM/AX in the mix later in the game. Time to repost to Craigs List and see if that drums up any more interest.....

******Latest Update 5/10/07******

Well reposting on Craigs List certainly helped get some action. I know most people on Craigs List seem to browse from newest to oldest rather than search, so I guess it shouldn't be a surprise. I posted 1 week ago, and literally 5 minutes after posting I had a response. Within about 6 hours I had 3 more people who all seemed VERY interested. I couldn't believe it. After talking with the first guy he filled out a credit application and would pick up the car in a day or two. Great, it was sold.....or was it? The guy got to the dealership too late last Saturday to do anything, so he was a "be-back" for Monday. No-show, and a follow up email revealed he spotted another car that he was approved for. On to plan B. The second guy also filled out a credit app and was very serious about the car. I put him on ice for a few days until I knew what the first guy was really doing (since he was willing to pay full price). Once the second guy's credit was pulled, he couldn't get approved without a down payment which he wasn't willing to do. Poor credit, 5 months on the job, 6 months in an apartment, and more delinquent accounts than you'd believe. All those issues, he didn't want to put a penny down on the car, and didn't want to pay more than prime interest. Yup, a crazy person, but still a lead for my purposes. The other two responses seemed like good leads too, but neither wanted to fill out the credit application online so I told them to visit the dealership in person. Not sure if they did or not. Since I'm in a military area, a few of the larger ships are coming in over the next couple weeks and that means a lot of Navy kids with big checks burning holes in their pockets.

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8 leads from Craigs List, 3 from Autotrader
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******Latest Update 6/3/07******

Activity has definitely picked up, and to my surprise it seems to be people on Craigs List finding my older posting. If they were just browsing they would have to go through a ton of listings before they got to mine, so this tells me that people are using the search feature more. Since the last update I've received another 6 leads from Craigs List and not one from Autotrader. Yup, the car is still for sale......

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14 leads from Craigs List, 3 from Autotrader
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******Latest Update 7/17/07******

Not a whole lot to report this time around. One email lead came in from Autotrader.com on the vehicle and 6 leads from Craigs List. I did repost to Craigs List again which always produces a spike in inquiries. The usual pattern with Craigs List contacts - several seemed interested and wanted to meet the following day to see the car in person, however no follow up email/call was ever received. I must say I'm still very surprised at the response rates between both sites. At this point Craigs List is generating 5 leads for every 1 Autotrader.com lead, but the most important thing is sales, and neither has produced this after 6 months. I know a dealer wouldn't usually hold a unit this long, so I'm attempting to abandon this project through the only auction I have access to: eBay. eBay is intended to be, in most cases, a wholesale network, so while I may not get as much for the car as if I held on to it I'd rather just get rid of it at this point.

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20 leads from Craigs List, 4 from Autotrader
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Craigs List vs. Autotrader.com: Who wins? There are a couple of ways to look at this evaluation I've done over the last few months. There are advantages to each classified site. Autotrader.com boasts the highest number of vehicles, and therefore the highest number of visitors for auto classifieds. One thing that isn't known is the number of visitors in my particular area. Sure, the number of times my vehicle was looked at is available from Autotrader, but these numbers are not available from Craigs List, so it's tough to compare. The more important number that auto dealers should be concerned about is the number of sales and return on investment. Autotrader is one of the highest price per vehicle sites out there, and Craigs List is free. Craigs List produced a significantly higher number of leads, and also produced the only leads where someone actually came and looked at the car in person. At the end of the day, neither site produced a sale, but after 6 months I attribute that to poor inventory selection. eBay served its unanticipated purpose in this experiment. I eventually dumped the car on eBay for no reserve and made a few hundred bucks profit, even though it sold for well below book value.

My conclusion: Craigs List generated a lot more action than Autotrader.com, and by numbers I would have to say it would produce better results with the right inventory. The downside is that if a car sits on the lot long enough, it's going to require much more work with Craigs List, because you need to keep posting the same car to keep it at the top of the results. Posting more than once every 45 days is against Craigs List terms of use, but to be effective it has to be done probably once a week. If I made a living out of selling cars, I think first and foremost I would buy the right inventory, and second I would put more emphasis into Craigs List than Autotrader based on cost. Like most dealers out there I would still use Autotrader for its reach and simplicity, but in a limited role based on cost. Maybe only with the Select Ads they offer (pay per listing) for certain units. $80 to finally get rid of any aged units on eBay seems worth it to me too. Even though $80 is a high cost per unit, consider the alternatives: having your cash tied up in a car that's not moving off the lot or paying auction fees at the dealer auctions.

Stay tuned for part two of this experiment which might be coming up in the next few weeks.

17 comments:

Jim said...

I amy dying in anticipation to hear the results of this one. I have been a big supporter of Craigslist for a few months now. Those who don't know it, don't know it. If they do know it, they use it. I must admit that I haven't seen nearly as much from it as I have autotrader and cars.com, but hey, free is free.

http://www.diffee.com

Jake said...

I've been dying to give my results, however there aren't any to give yet. Unfortunately the market seems to be pretty soft in my area. Craigs List started out looking like it would be a quick solution, however as time goes on the ad positioning drops and so do the responses. I can't say that either site is better at this point, but I'm going to play with pricing a little and see what impact that has.

David said...

I find your investigation interesting but highly flawed. In order to make an accurate comparison you really need to use more then one make and model. It is highly assumptive to say "Cars" as you have in you title when you are only sampling one car. I've worked in automotive advertising for quite a while now, in both Print and online. There is a huge difference in what type of medium works best for what type of vehicle. Now I understand that you are only comparing Online media, but the difference is that your vehicle really belongs on a "Buy Here, Pay Here" lot.
Having worked with many different dealers, "Buy Here, Pay Here" lots attract a different type of costomer. They don't care about vehicle ratings, MPG, Horse power, and all the detailed info available on sites such as Autotrader.com and Cars.com. They generally care about one thing, price. Their credit is usually poor or don't have any and they only have X amount which defines there search efforts. They're not looking for a specific vehicle they are looking for what ever will fit their budget. Your specific vehicle would work better in the local newspaper classifieds and even better in a local Hispanic publication (this is experience speaking, not sterotyping)
Try doing the same comparison with say, a late model Honda Accord, Toyota Tacoma, or Ford F150. Your results will be much different. Consumers looking for top selling vehicles research more and want more detailed info at thier fingertips.
By no means am I favoring one over the other, but to draw a conclusion based on one sample is highly flawed. Worse, if you would have done your research you would have known that vehicle is extremely low on internet searches regardless of which site. consumers looking at your vehicle are looking for price, any vehicle. Internet is amazing when someone is looking for a specific vehicle, but my experience shows that cheap cars are searched in local print. Ebay Motors my have worked better then both, as the mentality of those consumers are also different.

Jake said...

David,

Thanks for your comments. I wanted to point out a couple of things. First, one of my conclusions was that if I were selling cars on a regular basis, "first and foremost I would buy the right inventory", so you're absolutely correct in this particular vehicle not being the best for the experiment. I'm not a dealer, so for me to go out and buy 10 vehicles as a sample is not feasible. I have started a second experiment which I'm guessing will produce different results. Stay tuned to that one.

In terms of doing my research ahead of time, I did actually do this for the Pontiac used in this experiment #1. It had a high number of searches combined with a low number of available vehicles (i.e. "high scarcity index") on the high traffic classified sites.

I guess I should point out this is by no means a scientific experiment. Sure it could include a larger sample, more advertising media, etc. but my resources (both time and money) are limited for such an experiment. My intention is only to chronicle my individual experience, and people can take what they want from it.

Thanks again for your comments!

Anonymous said...

i would think a detailed description would most importantly include first the mileage of a vehicle....and 120K is a significant turnoff for a younger woman or someone looking for a first time vehicle for a 16 year old. heck, it's a turnoff for most average drivers. leaving the mileage out of your very "accurate" description is a bait to get callers and a waste of everyone's time. thanks.

Jake said...

Mileage was never left out of the description for any site, so I'm not sure where you got that. I happen to agree with you that if I were to leave it out, it would be a waste of time, however a lot of dealers think differently. Leaving it out would encourage more inquiries, and by having a customer on the phone they're at least a little closer to selling a car than if the customer never called. The reality in my particular case here was that even though mileage was listed on the ads, people called anyway and asked what the mileage was.

The other point I wanted to make was that while a car with 120k miles may not appeal to you, a lot of people are in situations where it doesn't matter. Someone may be a mechanic if something broke down, another person may only have a couple thousand dollars for a car, etc. The mileage may be a turnoff for a first time buyer, I mean, I wanted a brand new car when I turned 16, but the reality is that I had a certain amount of money I saved up and had to settle for something else. There's a car for everyone out there, and if nobody was looking for cars that had higher mileage, everyone would be driving new cars.

Greg said...

from my experiences as a used car dealer, I have gotten five times more leads from craigslist, than autotrader. Usually I leave my number out of my adds to weed out the annoying questions. I'd rather they just email me the questions. I also don't give directions until they call me an hour before to confirm. That way I don't spend all this time answering questions, and they flake.

http://www.sell-cars-for-profit.com/

Jake said...

Greg,

The tests I've run have given about the same results, 5 to 1 Craigs List over Autotrader. I'd have to agree with you on not giving a phone number, because I have received a lot of tire-kickers who seem to be lonely and just want to talk. That gets pretty annoying, but I guess you have to take the good with the bad in the car business.

Alan said...

You cannot post the same ad more than twice in a 45 day period, true. But if you delete the old ad and repost the EXACT SAME AD you can do this every 48 hours. I buy a car every few months and drive it until it sells. Not looking to make a profit on any of them, I just like a variety of cars at my disposal. And it keeps me within state laws prohibiting me from selling more than 5 cars a year. I find that reposting the ad every 48 hours (deleting the old ad in the process) is very effective. Once I begin posting ads, I get my asking price within 2 weeks in most cases. Keep in mind I drive $500-$1500 clunkers and make sure they're tagged and inspected and drivable before I resell.

Anonymous said...

Well, as a craigslist expert, I can tell you that I can post the same ad 50-times a day if I want to by using different email addresses. The only day worth doing that is Saturday. I always do multiple postings on that day.
There are programs and services that will post your ad multiple times and have a way to prevent them from being flagged.
Ya, I buy and sell a lot of cars on craigslist. Don't waste your money on Auto Trader or Cars.com. I've done that and it's just that: a waste of money.

Paul said...

It was interesting to follow the experiences with posting the ad. I have operated a web site that has classified ads for cars for over twelve years.
First thing to consider is the web site must match the type of car. My own web site would NOT be a good place to advertise the car you were selling at all. My site is for race and performance cars plus some antiques/classics. Craigslist or ebay (as it was in the end) was the most appropriate site for your particular car. For a fairly new/low mileage car, Autotrader would have been more acceptable and usually seems to offer better price returns.
Also consider that on Autotrader you are competing mainly against dealer ads. On my own site we strictly limit dealer ads so they are less than 3% of total ads at any given time. In this way our advertisers are not competing against dealers and their ad budgets. Also without the hundreds or thousands of dealer ads, we have always found buyers will read (not just search) every ad in the category they are interested in. Our own percentage of items sold is much much higher than much larger sites.
There are a number of other web sites that have similar policies and from my discussions with their webmasters have equal success. For street cars they are usually local and not national in coverage and are worth seeking out.

http://racejunk.com

Mark said...

I heard that Craigslist may be charging dealers in the near future. Has anyone heard the same thing???

Also, keep in mind, AT and Cars.com are not lead generators! They are about Exposure!!! TV & Radio reps sell on % of viewers/listeners, billboard is sold on traffic, newspaper is all about distribution. Why is AT and Cars.com judged on leads??? Believe it or not, many car shoppers do not call or email. Many show-up, contact off of the dealer website, call a local tel#. In fact, most car shoppers visit at least 3 websites prior to making a purchase. I heard the #1 Chevy store in the country say they want to be on the sites that car shoppers are visited within 2 weeks of making a purchase.

I am glad that you mentioned that AT tracks viewed details. If the focus is on increasing the Exposure of the vehicle (Inventory, Price and Photos), than the car will turn quicker. The book "Velocity" by Dale Pollak, is a must read for anyone who is selling used cars today. It is a different game compared to 15-20 years ago and the car shopper is showing up to buy, not shop.

Finally, dealers that have more inventory can have more success since they have more opportunities to have make sales. It seems difficult to come to a conclusion based on listing one vehicle.

I believe a smart dealer will understand that it makes sense to be on a site like Cars.com, AT and Craiglist. Since the Online influence is at 70%, the dollars are moving from Print Classifieds to Online Classifieds.

Thank you for your post. Good luck in 2010!

Jessica said...

I follow your blog for a long time and must tell you that your posts always prove to be of a high value and quality for readers. Keep it up.

Anonymous said...

Thanks for this! Very helpful!

Curious said...

Curious why you decided that the lady that asked about the mileage on the car "wasn't serious".

Personally, I find that sellers that don't put the mileage in the advertisement "aren't serious" about selling their cars :)

dean said...

i think Craig list is more popular then auto-trader. in my opinion i like it better even with less features.

Ruel Spot said...

It all depends on what you are looking to get of the deal. Most people will opt for Craigslist because it's a lot more personal.