Autobytel helps consumers find cars and obtain financing, and provides other services over the Internet. Located in California, Autobytel has been in business since 1995 and pioneered online auto marketing. Autobytel is well positioned to benefit as, more and more, consumers are turning to the Internet to find cars and work with car dealers to get prices and make purchases.

For example, according to J.D. Powers and Associates, 81% of consumer purchases of new light vehicles were made using the internet as the primary source of information and decision-making. In fact, consumers now use the internet more than either television or magazines when making a vehicle purchase. The forecast for auto sales and Autobytel looks promising: car sales are estimated for 2012 to be between 13.7 and 14 million, compared to 12.7 million in 2011 and 11.6 million for 2010.

Here’s how it works. Using Autobytel, a consumer can get information and tools to them to aid them with their automotive purchase decisions. Consumers also have the ability to submit inquiries directly to car dealers to contact them regarding purchasing or leasing vehicles. Even for consumers who may not be able to secure loans through conventional lending sources, Autobytel provides the ability to submit inquiries requesting dealers or other lenders that may offer vehicle financing to them. On average, US consumers buy a car every 3 to 7 years. Autobytel’s goal is to be a consumer’s “Lifetime Automotive Advisor” for each of the consumer’s auto purchases. It is revamping its operations to focus more intently on the “Lifetime Automotive Advisor” theme.

So how does the company monetize consumer information requests? Autobytel does not charge a consumer any fees for using its site. Autobytel sells the consumer information requests and inquiries to car dealers, manufacturers, and lenders. By tracking how many consumers who request dealer information actually make a purchase, Autobytel provides timely and valuable intelligence to its customers.

Last year was a breakthrough year financially for the company. Gross profit grew 20% to $6.9 million for the 2011 fourth quarter from $5.8 million for the prior year’s fourth quarter. Gross margin improved to 42.5% of total revenues for the 2011 fourth quarter from 39.3% for the fourth quarter of 2010. The improvement in gross margin was in part the result of a greater level of website inquiries sold to its customers. Net income for the 2011 fourth quarter totaled $341,000, or $0.01 per diluted share. With the increased demand for autos, Autobytel’s prospects are looking up.

For more information on the company, visit www.autobytel.com

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