CarGurus will wind down its CarOffer transaction business, including the dealer-to-dealer and Instant Max Cash Offer products, and expects to complete the process in the second half of the year.

The company said in an earnings release Thursday that after a strategic reassessment of CarOffer, it has determined the transactions business “has proven less effective in today’s more volatile and unpredictable pricing environment, where dealers require more flexibility and broader automation to streamline fulfillment than the model could provide.”

After the wind-down, CarGurus said it will continue providing “AI-powered inventory intelligence” on its insights platform. Meanwhile, consumer vehicle sourcing will be provided through Sell My Car – Top Dealers Offer, the company said.

CarGurus said it plans to “focus on technology and analytics that will enable smarter sourcing and pricing decisions rather than facilitating the transactions themselves.”

The wind-down is expected to result in total expenditures between approximately $14 million and $19 million, most occurring in the second half of this year.

“A significant portion of the cash payments are expected to be paid in the second half of 2025, with the remaining expected to be paid in the first half of 2026,” the company explained.

Marketplace revenues at CarGurus were up 14% year-over-year both for the second quarter and first half, reaching $222 million and $432.2 million, respectively. Meanwhile, wholesale revenue fell 52% for both Q2 and the first half, coming in at $6.3 million and $14 million.

Product revenue came in at $5.8 million for Q2, a 45% decrease, and was down 52% for the first half at $10.9 million.

In recent earnings calls, CarGurus had noted the challenges afoot at CarOffer.

“Our Marketplace business had another strong quarter, with year-over-year revenue growth of 14%,” CEO Jason Trevisan said in the earnings release. “We remain committed to expanding our suite of data-driven solutions across dealers’ workflows and powering a more seamless car-shopping journey for consumers.

“Within transaction-enablement, we are sharpening our focus on technology and analytics that enable smarter sourcing decisions rather than facilitating the transactions themselves,” Trevisan said. “Accordingly, we have made the decision to wind down the CarOffer transactions business over the balance of the year. This decision was not taken lightly, especially as it impacts colleagues who have contributed meaningfully to our efforts.

“We’re grateful for their work and are committed to supporting them through the transition.”

CarGurus announced it had acquired a 51% stake in CarOffer in 2021, then purchased the remaining stakes in the digital wholesale platform in late 2023 and named Zach Hallowell the CEO of the wholesale platform.

Bruce Thompson founded CarOffer in 2019 and was its CEO prior to the sale’s completion.