SecProbe.io

CORRESP
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December 9, 2022

Securities and Exchange Commission

Division of Corporation Finance

Office of Technology

100 F Street, N.E.

Washington, DC 20549

Attn: Ms. Melissa Kindelan

 Ms. Kathleen Collins

Re: CarGurus, Inc.

Form 10-K for the Fiscal Year Ended December 31,
2021

Filed February 25, 2022

Form 10-Q for the Quarterly Period Ended September 30,
2022

Filed November 8, 2022

File No. 001-38233

Dear Mses. Kindelan and Collins:

CarGurus, Inc. (the “Company”)
hereby responds to the comments provided by the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
received by letter dated November 10, 2022 (the “Comment Letter”) regarding the Company’s (i) Annual Report
on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”) and (ii) Quarterly Report
on Form 10-Q for the quarter ended September 30, 2022 (the “Q3 2022 Form 10-Q”).

For the convenience of the
Staff, the numbered paragraphs and headings below correspond to the numbered comments and headings in the Comment Letter. Each of the
Staff’s comments is set forth in italics, followed by the Company’s response to each comment. Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the 2021 Form 10-K unless otherwise indicated.

Form 10-K for the Fiscal Year Ended
December 31, 2021

Notes to Consolidated Financial Statements

Note 2. Summary of Significant Accounting
Policies

Concentration of Credit Risk, page 76

 1. You state in response to prior comment 2 that you do not release the title to vehicles until successfully
collecting funds from the buying dealer. Clarify whether this is when funds are received by the payment processor or the company. Also,
regarding your product offerings, tell us whether revenue is recognized before title is transferred to the buying dealer and, if so, how
you determined transfer of control of the vehicle has occurred.

Response:

The Company acknowledges the
Staff's comment and respectfully advises the Staff that it will clarify in its future filings that title is released when funds are received
by the payment processor. The Company notes that its payment processor also handles titling. The payment processor holds the title in
escrow until it collects funds from the buying dealer (i.e., title is legally transferred from the selling party to the buying party upon
signing of bill of sale, but title is held in escrow by the payment processor until payment is received). The transfer of title is administrative
in nature and does not correspond to the satisfaction of the Company’s performance obligation or transfer of control of the asset.
The transfer of title process begins immediately upon signing of bill of sale and is generally completed within two to three weeks.

The Company respectfully advises
the staff that it recognizes revenue related to the vehicle sale upon the signing of a bill of sale. The Company notes that a bill of
sale transfers ownership from the selling party to the buying party and is the triggering event for revenue recognition. Upon signing
the bill of sale, the Company and the selling party have a present right to payment and the buying party has legal rights to (can direct
the use of and derive benefits from) the asset and has significant risks and rewards of ownership of the asset.

 2. Please explain the following as it relates to the information provided in your response to prior comment
4:

 · Describe further the strategic discussions in the weekly meetings with the Executive Team. While you
state that these meetings are not intended for the review of financial information, tell us whether financial information is ever received
by the CODM and discussed in the weekly Executive meetings and if so, provide us a detailed description of such information.

Response:

The Company’s weekly
Executive Team meetings are almost exclusively on topics that pertain to the entire Executive Team and the Company. Most topics are people-related,
followed by product decisions and updates on major go-to-market initiatives. Financial information is not a recurring or regularly discussed
topic. On an ad hoc basis (e.g., less than a quarterly occurrence) Company-wide financial performance is discussed, which may include
a presentation of the consolidated P&L, including product level itemization, or a draft of the subsequent year’s preliminary
operating plan.

 · Tell us the purpose of the weekly one-on-one meetings with the CODM’s direct reports, including
whether goals and objectives are discussed. If so, tell us whether these are financial or performance goals and explain how you evaluate
the progress towards meeting such goals.

Response:

All people managers at the
Company are encouraged to have periodic one-on-one meetings with their direct reports. These meetings are a two-way dialogue intended
to mutually benefit both the manager and their report. The CODM’s weekly one-on-one meetings with his direct reports are focused
on operational issues. The CODM discusses his direct reports’ objectives and ways he can help them better achieve them. During select
one-on-one meetings twice per year, aligned with the Company-wide mid-year and year-end performance review cycles, the CODM will discuss
with his direct reports their progress against their mid-year or annual objectives. These objectives involve build, launch or hiring goals
in line with the Company’s Strategic Initiatives (“SIs”) for the year.

Overall achievement of SIs
is one component of the Executive Team members’ annual cash incentive award. SI’s are established each year by major functional
area with corresponding operational objectives; none of the SIs relates to component level financial metrics. Every employee, including
members of the Executive Team is compensated based on the achievement percentage of the SIs as a whole. There are no employees who have
their compensation directly tied to any subset or specific SIs. The Company has consolidated financial goals underlying each employee’s,
including each Executive Team member’s, annual cash incentive award opportunities. These consolidated financial goals may vary from
year to year but are all on a consolidated basis as disclosed in the annual Proxy Statement.

 · Describe in detail the financial information discussed in the weekly one-on-one meetings between the
CODM and the COO and CFO and how such information is used and evaluated.

Response:

The CODM’s conversations
with the COO are always focused on the entire business, the COO’s teams, and Company operations. Occasionally with the COO, and
more often with the CFO, financial performance is discussed. While financials are not formally presented in these meetings, consolidated
results are sometimes discussed relating to trends in the Company’s business in its entirety, specifically for consolidated revenue,
gross profit and operating income. The CODM and CFO may further discuss certain areas of the business that are identified as significantly
ahead of or behind plan, are in launch phases where trends are still being discerned, or which have become strategically more important.

Components of the business,
such as CarGurus United Kingdom and Canada, are rarely discussed individually given their relatively small size compared to the consolidated
business, the businesses are mature and operations are typically consistent with operating plans. When the CODM has discussions with the
COO regarding any specific components of the business (including CarOffer), such discussions are focused on management, strategy, operations
and, more recently, operational metrics, such as inspection pass/fail rates and vehicle return rates. To the extent financial results
are discussed for a specific component of the business, it is in the context of understanding consolidated revenues, gross profits and
operating income. Any discussions between the CODM and COO regarding a specific component of the business, including CarOffer are to understand
the current state of that business and are not intended for the purpose of resource allocation decisions.

CarOffer is not a
wholly-owned subsidiary, and its CEO is responsible for running day-to-day operations as agreed to in the CarOffer Operating
Agreement. There are two instances in which resources have been moved from CarGurus to CarOffer historically. The first instance is
with respect to excess Company capital funding in accordance with the terms of the CarOffer Operating Agreement. This occurs when
CarOffer has a working capital need and makes a request to the Company for funding. This funding incurs interest and is payable by
CarOffer to the Company in the form of a reduction to the purchase price upon any future exercise of the Company's call rights or
CarOffer's put rights. No such funding occurred during fiscal 2022. The only other situation in which the Company may provide
financial resources to CarOffer relates to a joint product offering in which marketing spend is shared between the two
entities. For this marketing spend, the Company pays the expense directly and is then reimbursed by CarOffer for its share of the
spend. This is not an allocation of resources between entities but instead a reimbursement of funds. The CarOffer CEO is responsible
for directing this type of spending decision along with the Company’s Vice President of Wholesale.

We note that CarOffer remains
a relatively immature component of the business, which has experienced rapid growth and volatile operating results in response to changes
in business operations and macroeconomic conditions. Because some revenues generated by CarOffer are generated gross, and others are generated
on a net basis, the composition of the revenues generated by CarOffer’s business has a direct and significant impact on the results
of the consolidated business and can vary significantly each period depending on the composition of activity. Due to its immaturity and
varied results, it is sometimes necessary for the CODM to discuss with the CFO or COO the results of the CarOffer operations to better
understand the consolidated results of the Company. However, as outlined above and discussed further in this letter, this component of
the business is operated autonomously by the CarOffer CEO, and decisions made by the CarOffer CEO are made to allocate resources only
within this specific component of the business. These resource allocation decisions are made within the parameters of the annual operating
plan, which is approved by the CODM, with management towards that plan being the responsibility of the CarOffer CEO. The CEO of CarOffer
is not a direct report to the CODM and does not meet with the CODM on a regular basis.

To the extent CarOffer’s
results of operations are discussed between the COO and CODM, it is to understand the results in the context of a rapidly growing business
with often volatile results and the impact to consolidated results. These discussions are not with the intent to and do not result in
the allocation of resources to or between any component of the business, including CarOffer. We note that while CarOffer revenue is 64%
of consolidated revenue for the nine months ended September 30, 2022, and gross margin percentage is highly volatile due to the aforementioned
product mix with varying revenue recognition methods, overall CarOffer operating expenses through the nine months ended September 30,
2022, are not nearly as significant, representing less than 20% of consolidated operating expenses. The majority of these operating expenses
for CarOffer pertain to personnel-related costs and marketing spend with all other operating expenses for CarOffer reflecting less than
5% of the Company’s consolidated operating expenses for the year-to-date period. Because CarOffer is not a fully owned subsidiary,
its CEO is in charge of managing personnel related decisions and costs after their budget is set at the beginning of the year. Marketing
spend relates primarily to the IMCO joint product offering and is a small proportion of the Company’s consolidated marketing budget
for the year. The remainder of CarOffer’s operating expenses are very small in the context of the entire business. As a result of
these factors, while the CODM reviews CarOffer results from time to time due to the nature of the business as described above, it does
not warrant separate review from a resource allocation perspective.

 · Tell us whether you discuss resource allocations in these weekly meetings and/or how these meetings
inform the CODM’s consideration for making resource allocation decisions, even at a consolidated level.

Response:

The primary topic of
discussion during these weekly meetings is the Company’s operational performance. The CODM may use information from these
meetings to make company-wide allocation decisions. An example would be a company-wide request to reduce discretionary spend or slow
new headcount additions in a period of economic downturn. On occasion, functional department leaders will discuss the need to
allocate resources (e.g., headcount or spend) between departments. For example, a functional department leader (e.g., a Company
product team lead) may recommend a resource change in a department along with the rationale and merits of doing so. The functional
department leader will propose a plan of action to implement the suggested change, which may include adding or reducing resources
(e.g., headcount or spend) or if other business leaders can help fill the resource gap. If a product leader sees a product
underperforming, the product leader might suggest slowing marketing spend, which would be raised and considered in these meetings.
Functional department and product leads make all allocation proposals versus being directed by the CODM. These allocation decisions
are made among legacy Company products and departments and do not involve CarOffer. As outlined above and discussed in more detail
below, the CarOffer CEO runs the day-to-day operations of the CarOffer business within the parameters of the approved annual
operating plan and, as a result, the Company does not allocate headcount between any legacy Company products or departments and
CarOffer.

 · Tell us how the disaggregated GAAP and non-GAAP income statement information for budget versus actual
performance, which you distribute each month to the CODM, Executive Team and Finance department, is used in assessing performance. Also,
explain how this information impacts any decisions related to potentially acquiring additional equity interests in CarOffer and why allocation
of resources for this potential future investment is not considered in your assessment of such information.

Response:

The disaggregated GAAP and
Non-GAAP income statement information for budget versus actual performance is used to provide further context into the Company’s
consolidated results as well as to assess the accuracy of the Company’s overall financial statements.

As discussed in the Company’s
prior response to the Staff, the focus of the financial reporting package is on the consolidated financial statements, which is what the
CODM uses to assess the operating performance of the entire Company. The prior month GAAP and non-GAAP income statement for budget versus
actual performance, disaggregated by the Company’s U.S. (which includes CarGurus U.S. and Autolist), CarOffer, UK (which includes
CarGurus UK and PistonHeads) and Canada websites serves to provide further context to the CODM, Executive Team and Finance department
on the drivers of the Company’s consolidated results, akin to how disclosure in “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in the Company’s periodic SEC filings provides further context regarding
drivers of changes in the Company’s consolidated income statement results. Although the backup within the financial reporting package
in