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Carwow: pros and cons of car dealerships using the lead generating platform


New and used car price comparison website, Carwow, has reported that it accounted for one-in-12 car sales in the UK during 2020. With the tech company raising £55m in its seven years since inception, Carwow is growing fast with the car buying service now expanding into Germany and Spain.

With lockdown highlighting the importance of digital marketing for car dealers to effectively promote their stock and maintain relationships with customers, Carwow is one of many marketing options promising to deliver quality leads. Supercharged Media explores the advantages and disadvantages of a car dealer to use Carwow.

Advantages

Higher intent sales enquiries

Carwow helps to reduce ‘tyre kickers’ by ensuring the prospect chooses the make, model & trim level of their desired vehicle and also provides a price comparison between dealerships. Finance/lease quotes are also made available to the prospect before visiting a dealer. These stages should in theory reduce individuals not committed to purchasing a vehicle.

Provides an opportunity to promote niche cars

With over 5-million YouTube subscribers, almost a million followers across Facebook & Instagram and over 2.4 million website users each month, Carwow can provide significant exposure to manufacturers' vehicles.

Streamlines the sales process

Carwow saves dealers time by providing better-educated prospects thanks to its wealth of in-depth written and video content.

Aftersales support

Carwow consults its clients on how to convert more of their leads generated through its platform.

You only pay for leads generated

As a marketing activity, Carwow is ultra-trackable as you only pay for leads generated through the site. Carwow claimed in 2019 30% of its enquiries generated a sale.

Disadvantages

Solely competing on price?

Carwow states its data scientists have built an algorithm that shows cars to prospects based on the location of dealers, average response time, conversion rate, customer reviews and other variables. However, some industry professionals regard the platforms as a ‘race to the bottom’, with car sales professionals moaning in forums that Carwow is squeezing their margins on stock. However, Carwow claim only 25% of their customers choose the cheapest price quoted.

Less likely for post-sale service work

Carwow state that customers are willing to travel on average up to 80-miles to purchase a ‘premium car’ through its website. This makes it unlikely for customers to use the dealer for service work after collecting their vehicle, due to visiting somewhere closer to home.

Leads come at a cost

Besides paying a commission fee on each lead delivered by Carwow. A dealer also needs to employ a specialist salesperson to handle Carwow enquiries, reducing the overall profit per sale.

Carwow doesn’t grow or develop the marketing channels owned by a dealership

Although Carwow promises to deliver quality leads. It doesn’t build a dealer’s own marketing channels such as website, social media, email or YouTube, to name a few. This means when a dealer stop uses Carwow, then no more leads will be generated.


Supercharged Media believes dealerships should invest a significant portion of their marketing budget building their own marketing channels. We believe Carwow offers great benefits to the consumer, although remain sceptical on the long-term benefits for a dealer. However, we acknowledge all automotive digital marketing strategies involve the use of multiple platforms, continual testing of new tactics and thorough analysis of data.