A massive acquisition announced Tuesday will see Cars.com enter the digital remarketing and vehicle wholesale space, as well as the consumer peer-to-peer market.
Cars.com has agreed to buy the Accu-Trade Group, which includes Accu-Trade, Galves Market Data and MADE Logistics, for $65 million in cash.
The purchase would also potentially involve more cash and stock based on financial thresholds. The company expects the transaction to close in approximately 30 days.
Among other things, the purchase will give CARS the technology needed to facilitate digital wholesale transactions on its platform.
“We are excited to enter the fast-growing, multi-billion dollar category of digital vehicle acquisition and marketing with Accu-Trade’s world-class appraisal and valuation technology,” said CARS Chief Executive Officer Alex Vetter in a press release.
“These solutions will drive better inventory management and maximize profits for merchants, while introducing a more efficient option for buying and selling wholesale inventory at scale,” Vetter said.
“We will also enable millions of consumers to sell their vehicles online to the best buyer with confidence and security,” he said. “This acquisition further accelerates our platform strategy and will propel our end-to-end transactional capabilities for buyers and sellers and long-term growth of CARS.”
Dealers can use the CARS platform to buy and sell inventory at scale through both a dealer-to-dealer network and a consumer-to-dealer network. You can also take advantage of instant guaranteed deal solutions across all CARS properties, including the Cars.com marketplace and websites built by Dealer Inspire.
Dealers can also source used inventory from consumers through the CARS platform via Accu-Trade’s proprietary VIN-specific rating and rating technology.
CARS plans to introduce consumer “sell-it-yourself” functionality to its marketplace, where private sellers can choose to sell to another consumer or to a retailer. CARS expects the technology to be integrated into the platform shortly after completion.
North American wholesaler and automotive software entrepreneur Robert Hollenshead founded Accu-Trade in 2015. Accu-Trade Chief Technology Officer Jeff Zamora will join the CARS leadership team.
“CARS’ strong consumer audience and outstanding network of dealer customers, combined with its proven track record of delivering digital solutions, make it the ideal partner to drive broader adoption of the Accu-Trade platform,” Zamora said in a press release.
“As dealers look for new solutions to optimize their inventories and continue to increase the profitability of their stores, we believe we can rapidly scale these assets across the entire CARS dealer network. On behalf of the entire Accu-Trade team, we look forward to joining the CARS family to accelerate innovative digital solutions for auto trading.”
CARS expansion into digital remarketing, wholesale acquisition and private parties segments would continue the broad expansion of the company’s services over the past several years. Cars.com has evolved from the vehicle listings/marketplace arena to dealer reviews and review areas, dealer websites, digital retail, fintech and beyond
The company expanded into dealer ratings and reviews in the summer of 2016 with the acquisition of DealerRater.
Then in February 2018 Cars.com. announced that it is acquiring Dealer Inspire — which specializes in dealer websites, digital retail and messaging platform products — and Launch Digital Marketing, which provides automotive digital marketing services.
In November, Cars.com signed a definitive agreement to purchase CreditIQ, a fintech platform offering instant online auto finance reviews and approvals to facilitate online vehicle buying.
The Cars.com purchase also follows the entry of another major industry player into the online wholesale space.
Just last week, CDK Global announced that it had launched an online wholesale marketplace called CDK CarSource, designed to connect dealers with used car inventories from other dealers across the country.
CarGurus, which traditionally competes in the same marketplace as Cars.com, has entered wholesale with the purchase of CarOffer, a deal that closed in early 2021.
Established companies like Cox Automotive – which owns Kelley Blue Book and Autotrader, rivals of Cars.com and CarGurus – as well as KAR Global and Auction Edge are firmly entrenched in the online wholesale space.
And once newcomers ACV and EBlock are now publicly traded and making their own acquisitions.