Edmunds.com is changing its business models to shift away from income from advertising in favor of working with auto dealers. And rival Kelley Book Book says it is changing how it gives pricing information to consumers.
The biggest change comes at Edmunds. In additional to providing buyers with reams of data about cars and pricing, it will now be able to plug them directly through to dealers who can offer them a firm price on a car. Edmunds calls the program its "price promise."
The concept represents a turnabout for the site. In the past, it made money by selling advertising to automakers hoping to catch the attention of potential buyers as they conducted research. Now Edmunds is developing relationships with dealerships, which it is says will benefit consumers as well.
At Edmunds, the goal is to give customers "a substantially easier time at the dealership," says Seth Berkowitz, Edmunds.com's president. "They will be able to get what they want."
The business-model change was important, he says, in order to take advantage of a trend to simplified car buying. Customers don't want to linger at dealerships when it comes to buying a new car. They want to close their deals as quickly as possible, then drive home in a shiny new car.
Research is critical, but the "No. 1 unmet need" was to secure an actual price on a new car, Berkowitz says. More than a third of potential car buyers surveyed said they they'd love to completely outsource their car buying transaction, even though relatively few use a car-buying service as a broker.
That creates a huge opportunity for Edmunds to lead buyers through the process and make it less painful. "It's a wide open space," he says, "massive multi-billion market that is incredibly underserved."
Although today is the official start date, Edmunds has been gradually rolling out its pricing tool since February.
Not to be outdone, Kelley B! lue Book is making changes of its own. Today, it is changed the way it offers pricing advice. KBB's Price Advisor offers a range of prices on a new car and ratings on local dealers.
The tool offers three different pricing zones for specific make, model and trim, KBB says. One of the zones, the green one, represents the sweet spot of where a buyer is likely to find the best, or at least fairest, price.
"Price Advisor puts a spotlight on transparency starting with pricing, and moves across all aspects of the dealership," says Scott Ehlers, a KBB vice president, in a statement.
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