Summary
- The evolution of technology in the car buying space has transformed the industry.
- The ability to easily do a price comparison and access available inventory has led to CarGurus winning new business and becoming a necessity.
- The company should continue to grow and win, however, it is tied to the cyclical nature of the auto industry.
Source: CarGurus
CarGurus (CARG) has arguably changed the market of auto purchases. The company came along well after AutoTrader but somehow still came to win market share. By adding features such as a fair value estimate and using the power of Google (GOOG) search, the company was able to successfully drive consumer traffic to its website. In doing so, it was able to start having dealerships pay to promote their listing and ensure maximum views from consumers searching for the vehicle they happen to have in inventory. This has led them to become the number one online market place for autos which should only continue to grow in time. Investors who add a position to their portfolio should benefit in the growth along with CarGurus as the share price should rise as well.
