The Top 12 CarGurus Competitors & Alternatives

CarGurus is an online platform on which users can purchase and sell vehicles as well as prequalify for loans and conduct research about car brands and models.

The company, which is headquartered in Cambridge, Massachusetts, was founded in 2006 by Langley Steinert.

CarGurus was initially launched as a community platform on which users could rate local dealerships, car shops, and almost any type of car. This was little surprising given Steinert’s background. He is, after all, one of the co-founders of travel review site TripAdvisor.

Unfortunately, the review concept didn’t translate to the automotive industry, which required Steinert to pivot after a year and a half. This is when CarGurus shifted its business model towards allowing dealers to list on its platform (and charge a fee in exchange).

The cars offered for sale on CarGurus are offered by both dealerships and the actual owners. Each listings contains important information such as the price, location, the vehicle’s characteristics and ownership history, seller ratings, and much more.

Despite the fact that CarGurus has raised less than $2 million in venture capital, it managed to become the most popular automotive website in the United States. More than 38 million unique users visit the platform every month.

CarGurus took advantage of its popularity by going public in October 2017, which added another $150 million to the firm’s balance sheet. Today, it generates $951.4 million in revenue per year (2021).

Additionally, CarGurus has launched dedicated sites in the United Kingdom and Canada. It boasts an active network of 40,000 dealers and has over five million listings, more than any other automotive marketplace in the United States.

Its leading status has enabled CarGurus to, furthermore, snap up some of its competitors. It now owns the automotive marketplaces Autolist and PistonHeads. A total of 1,000 people are employed by CarGurus on a full-time basis.

The methodology with which competitors of CarGurus are ranked is based on a variety of data points. Information such as revenue, site visitor numbers, registered dealerships, and anything else in between will be considered. 

This analysis, in order to ensure comparability, looks at competitors that are primarily known to be listing sites. However, dealerships that have a strong online presence will also be taken into account.

Since the majority of the revenue that CarGurus derives comes from the United States, most of the firms mentioned on this list will be based in North America.

It has to be noted that this analysis should not be seen as a purchase recommendation. It is merely a summary of the competition that Vroom faces as of today.

So, without further ado, let’s take a closer look at the top 12 competitors of CarGurus.

1. Cars.com

Headquarters: Chicago, Illinois

Founder(s): Alex Vetter, Mitch Golub, William Swislow

Year Founded: 1998

Cars.com is likely the biggest competitor to CarGurus when it comes to sheer traffic numbers, boasting 25 million unique monthly visitors. Apart from its core website, Cars.com also operates other brands such as Auto.com, NewCars.com, and Pickuptrucks.com, and a few more.

The company has changed hands multiple times throughout its existence. In August 2014, media company Gannett acquired a controlling stake in Cars.com for $2.5 billion. Three years later, Cars.com spun off from its parent company TEGNA and began trading as a public stock.

Cars.com itself does not own any cars but simply acts as a facilitator of transactions. However, programs such as Certified Pre-Owned (CPO) ensure that the vehicle a customer is purchasing doesn’t entail any negative surprises.

Today, Cars.com, which is still being led by founder and CEO Alex Vetter, works together with close to 20,000 dealerships across the nation while employing over 2,000 people.

Those employees, among other tasks, are busy creating extensive reviews on almost any newly released car model, publishing news articles, or creating repair tutorials. Actually, Cars.com has one of the biggest editorial teams in the automotive industry.

In 2021, Cars.com generated $623.7 million in revenue, up 14 percent year-over-year. Profit was equal to $7.7 million.

Source: Cars.com

2. Autotrader

Headquarters: Atlanta, Georgia

Founder(s): Chip Perry, David Lilly

Year Founded: 1998

Autotrader rise coincides with the beginning of the internet. The platform became instantly successful as it slowly replaced more analogue paper-based vehicle listings. A year into the launch, Autotrader already managed to attract over 1.2 million users to its website each month.

It has to be noted, though, that the platform is not to be mistaken with the U.K.’s Auto Trader brand, which is a separate entity competing against CarGurus.

Apart from browsing used and new vehicles, Autotrader also provides prospective buyers with data points such as the vehicle’s history, dealer discounts, reviews on certain models, tutorials, and many more.  

Autotrader itself was acquired by media holding company Cox Enterprises back in January 2014. Two years later, Autotrader even managed to expand into Australia but later (2020) sold the business to eBay.

Its U.S. website currently lists over three million new and used vehicles from 250,000 individuals and 40,000 dealerships. Autotrader’s website is accessed by more than 14 million unique visitors every month.

Source: Archive.org, Autotrader, ConsumerAffairs

3. TrueCar

Headquarters: Santa Monica, California

Founder(s): Bernie Brenner, Jim Nguyen, Oded Noy, Scott Painter, Tom Taira

Year Founded: 2005

On TrueCar, users don’t need to negotiate with any party. The platform partners with dealerships across the nation who are the ones offering cars for sale. In fact, TrueCar works together with 35 percent of all franchised dealers in the United States (equal to around 13,000 dealerships).

When you’re selling your vehicle, TrueCar is providing an estimate based on the car’s information (e.g., brand, make and model). Additional data points, such as the vehicle’s color or additional equipment, can be added on top.

Similarly, buyers can immediately purchase a car through the platform. However, it has to be noted that this offer isn’t always binding. Sometimes, a vehicle may have been sold by the dealership even though the two parties had previously come to an agreement on the platform.

The firm went public in May 2014 after previously raising $340 million in venture funding. In 2021, TrueCar, which has over 8.5 million unique monthly visitors, generated $231 million in revenue. 608,000 vehicles were sold via its platform that year.

TrueCar, in comparison to Carvana and Cazoo, is actually a marketplace that connects buyers and sellers (dealers). The company itself does not purchase cars, which significantly reduces operational cost and thus risk. Instead, it makes money by charging a fee to dealerships for any vehicle sold via TrueCar.

Source: Crunchbase, True Car

4. Carvana

Headquarters: Tempe, Arizona

Founder(s): Ernie Garcia III, Ryan Keeton

Year Founded: 2013

Carvana is an online car dealership that purchases vehicles from and directly sells them to consumers. It made a name for itself by not only offering customers maximum convenience but also due to its shiny car vending machines. The 33 vending machines that are currently in operation are often placed in strategic locations such as highway intersections.

Customers who decide to pick up their purchased car from said vending machines will be given an oversized coin (similar to a traditional vending machine), which then picks up the car they previously ordered.

Alternatively, Carvana also delivers the car right to the buyer’s home. Each car comes with a seven-day money back guarantee to allow for extensive testing of the vehicle. Most of the cars that are available for sale on Carvana have either been purchased directly from the owner or in bulk from companies like Hertz.

Carvana itself was spun out of DriveTime, one of the nation’s largest car retailers that is helmed by Ernest Garcia II, the father of Ernie Garcia III. In those early days, DriveTime actually purchased the vehicles on behalf of Carvana, which became its own, separate company in 2014.

The Apple-like presentation of its available cars has certainly struck a chord with customers. In 2021, Carvana sold more than 425,000 cars via its platform. This translated to $12.8 billion in revenue for the year.

Carvana already went public back in April 2017, which provided the firm with $225 million in proceeds. Previously, Carvana had raised $1.6 billion during its life as a startup. Over 7,000 people are currently employed by the company.

Source: Carvana, Crunchbase

5. CarMax

Headquarters: Richmond, Virginia

Founder(s): Austin Ligon, Mark F. O'Neil, Martin Mindling, Richard Sharp

Year Founded: 1993

CarMax was created by employees from electronics chain Circuit City, which funded the initial launch of its first physical store called CarMax: The Auto Superstore. The physical outlet would display over 500 different used car models, which all had a fixed and non-negotiable price attached to them.

The superstore was, furthermore, accompanied by tons of computer-aided information that helped prospective buyers. This, in turn, removed the need for hiring dozens of salespeople and created a less adversarial atmosphere.

In the first few years, those stores were operating at a relatively heavy loss. However, once CarMax reached a sufficient size, scale economies kicked in and allowed it to soon turn a profit. In 1996, the firm purchased its first-ever new car franchise, a Chrysler-Plymouth-Jeep store situated in Atlanta, Georgia.

Almost a decade after its founding, CarMax finally spun off from Circuit City and became a publicly-traded company not long after (2002). Today, CarMax operates 235 stores across the nation that are managed by the 25,000+ associates it employs.

Thus far, the platform has sold over 9 million cars and appraised another 33 million. In 2021, CarMax generated $31.9 billion in revenue and sold over 343,000 cars. CarMax claims to have the nation’s largest inventory of used cars. In fact, its share of the nationwide age 0–10-year-old used vehicle market is equal to four percent as of today.

Source: CarMax, Investor Relations

6. AutoNation

Headquarters: Fort Lauderdale, Florida

Founder(s): Wayne Huizenga

Year Founded: 1996

AutoNation is one of America’s biggest automotive retailers with over 300 locations nationwide. Those physical dealerships not only offer cars for sale but also handle repairs and other types of maintenance tasks. Its service team repairs more than 4.3 million vehicles each year.

Founder Wayne Huizenga has been behind the creation of some of America’s most successful franchises before starting AutoNation. More precisely, he co-founded both Blockbuster Video as well as Waste Management and owned sport franchises such as the Miami Dolphin or Florida Panthers.

He had launched AutoNation all while purchasing another company dubbed National Car Rental for $600 million in stock. The two companies eventually merged and were rebranded as AutoNation in 1998.

A year later, in 1999, the firm launched its first website dubbed AutoNationDirect.com alongside hundreds of dedicated sites for each dealership it operated (operating locally focused sites was the norm back in the early days of the internet).

Today, AutoNation operates a diverse set of businesses that include new and used car sales, financing, express buying, and more. Over 50 percent of the firm’s revenue, which totaled $25.8 billion in 2021, is generated via its website. Close to 30,000 people are now employed by the company whose website is visited 1.3 million times each month.

Source: AutoNation, Similarweb

7. CarsDirect

Headquarters: El Segundo, California

Founder(s): Scott Painter

Year Founded: 1998

CarsDirect.com revolutionized the online car sales market by becoming the first platform to directly sell vehicles to consumers over the internet.

Traditionally, most vehicle listing sites would only connect a buyer with sellers. In exchange for making that connection, those sites (including CarGurus) would pocket a fee for uploading the listing.

Being one of the first to the online car selling game enabled CarsDirect to raise close to $300 million during the dot-com era. Unfortunately, its IPO plans were scrapped later on (December 2000) due to the bursting of the tech bubble.

Five years later, CarsDirect’s parent company rebranded into Internet Brands, which now operates sites in a variety of segments such as automotive, healthcare, legal, and more. In the automotive segment, it runs sites such as RacingJunk, TheCarConnection, Club Lexus, and many more.

Today, CarsDirect is primarily known for its extensive reviews of almost every model listed via its website. CarsDirect has, furthermore, developed a tool that allows interested buyers to compare the price and other characteristics of multiple vehicles.

Internet Brands and its associated websites were ultimately sold to private equity firm KKR for $1.1 billion back in June 2014. Today, those brands (including all combined sites) attract over 35 million monthly visitors. CarsDirect itself employs over 100 people.

Source: Crunchbase, Internet Brands, Los Angeles Times

8. Kelley Blue Book

Headquarters: Los Angeles, California

Founder(s): Leslie Kelley

Year Founded: 1918

Leslie Kelley started out as a car dealership selling Ford cars. The dealership made a name for itself by becoming one of the first ones to sell colored vehicles. Not only that, those cars (Ford Model T) were actually pink.

Eight years after starting the company, Kelley published the company’s first Blue Book. The book, which eventually grew into a series and now includes a price evaluation tool that is accessed millions of times every month, propelled the firm into one of the most trusted sources in the automotive industry.

The KBB metric became so powerful that banks and dealers would repeatedly use it to value their cars. It was even utilized by the U.S. government during WWII to combat rising prices of used cars, which were in shortage as a result of the war.

By the 1960s, KBB finally pivoted the business from a car dealership towards solely being a publisher. The advent of the internet, furthermore, prompted the firm to launch its first website in 1995. Two years later, KBB already managed to become the world’s most popular automotive website.

Today, the firm claims that 84 percent of all used vehicle shoppers use its estimate to evaluate a car’s worth. Additionally, its value estimates are used in over 100 countries across the globe (KBB itself operates dedicated sites in Brazil, Canada, as well as the United States).

Its continuous relevance prompted Autotrader to purchase KBB, which currently employs over 400 people, in 2010. The purchase price was not disclosed at the time. More than 12 million unique users visit its website every month.

Source: KBB.com

9. eBay Motors

Headquarters: San Jose, California

Founder(s): eBay

Year Founded: 2000

eBay Motors offers vehicles as well as car parts for purchase and sale. Within six years of launching, eBay Motors had already managed to facilitate two million vehicle sales.

That same year, eBay rolled out its buyer protection, which made shopping for vehicles substantially more secure. Previously, many buyers had experienced fraud, for example by not receiving the car they purchased.

Today, thousands of professional dealerships are registered on eBay’s vehicle classifieds platform. Its app also includes a section called My Garage. There, users can select, save, and ultimately purchase the parts that are associated with the car they own.

Close to 7.5 million unique visitors access eBay Motors’ app and website every month. A total of 18,000 car listings (excluding parts) are active at any given time.

Source: eBay, eBay Selling Center

10. Edmunds

Headquarters: Santa Monica, California

Founder(s): Ludwig Arons

Year Founded: 1966

Edmunds has been known to publish automotive content since the mid-1960s. It began as a publisher of printed booklets that contained information on various vehicles, including their specs, price, and so forth.

25 years later, the firm finally went digital by selling CD-ROMs. However, it continued to release physical booklets such as the Edmunds New Cars & Trucks Buyer’s Guide.

In June 1999, the firm officially rebranded into Edmunds (it was previously known as Edmunds Publications) while simultaneously unveiling its first-ever website. A year later, Edmunds released its True Market Value (TMV) estimate (similar to KBB’s metric), which depicts the current worth of a car. Millions of users flocked to its website as a result of that.

Today, Edmunds’ strength primarily lies in the extensive reviews that it publishes. The publisher analytes over 300 new car models every year. In order to do that, its tester drive a combined half a million miles.

CarMax had previously invested a minority stake into Edmunds. Later on, in April 2021, it purchased the remaining shares of the firm for $404 million. The last available revenue numbers for Edmunds date back to 2020 when it generated $140 million in income.  

Source: CarMax, Edmunds

11. Facebook Marketplace

Headquarters: Menlo Park, California

Founder(s): Facebook

Year Founded: 2016

Facebook, in 2016, launched its Marketplace feature, allowing any registered member to purchase and sell a variety of different goods and services. Much like eBay, its marketplace section also includes vehicles as well as car parts for sale. 

It took Facebook’s marketplace less than five years to reach its one billionth users. Those billion users are served by the over one million official shops on the marketplace. Given that the core Facebook platform has close to three billion users, this growth certainly comes as no surprise.

Consequently, Facebook works together with car dealerships via its Marketplace for Business offering, which is available in selected countries such as the United States, France, or Germany. Facebook claims that over one million people click on a vehicle listing every month (i.e., unique monthly users).

However, the firm also had some issues with auto dealerships in the past. For example, in 2021, it removed bulk uploads as a feature, forcing business owners to upload their listings one by one. Facebook reasoned that this would create a higher quality of cars on its marketplace.

Source: Engadget, Facebook

12. Cazoo

Headquarters: London, England

Founder(s): Alexander Edward Chesterman

Year Founded: 2018

Cazoo is the British equivalent to Carvana and Vroom. It delivers the vehicles right to the customer’s doorstep from its Midlands facility within 72 hours or less. Consequently, owners can sell to or trade in their cars directly with the online dealership.

Interested buyers can review cars via 360-degree images and by accessing their features and ownership history. Various financing options are available as well.

This is certainly not Chesterman’s first startup rodeo. He previously co-founded LoveFilm (DVD delivery) in 2003 and Zoopla (property platform) in 2008, respectively.

Cazoo has raised a whopping $2 billion in debt and equity funding since it has been launched. Another $1 billion was raised during its IPO in August 2021. The platform has used its excessive cash reserves to expand into a variety of other countries, including Germany, France, Portugal, and Spain.

The platform managed to generate £668 million (~ $833 million) in revenue for 2021, an increase of 312 percent from the year prior. Cazoo sold close to 50,000 vehicles over that timespan. Over 2,200 people are employed by Cazoo.

Source: Cazoo, Crunchbase

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.