Carwow has raised £12.5 million from investors, including Spotify and Dropbox backers Accel Partners.
The startup was launched by chief executive James Hind, Alexandra Margolis and David Santoro in 2013.
Carwow allows users to put details of the car they are searching for and the details are passed to dealers. The consumer then receives up to five offers from the best-rated dealers who they can then contact directly.
The investment will be used to fund advertising and training dealers to use the platform.
Previous investors Balderton Capital, Samos Investments and Episode 1 Ventures, also participated in the funding round, which follows a £4.6m investment in December 2014.
Hind said: "We’re excited to roll out our service even further on the back of strong growth in 2015.
“A new car is an important purchase, typically a person’s biggest after their home. At Carwow, we enjoy working with the industry to make things simpler and more efficient for all involved. This new round of funding gives us the firepower we need to change the way the UK buys cars."
As part of the investment, Fred Destin, partner at Accel, will be joining the board.
Destin said: “Carwow reminds me of Zoopla in the early days. They’re changing the discovery experience through a superb online platform and better information and are creating a win-win for consumers and dealers, brought to you by a wonderful founding team.”
Rob Moffat, partner of Balderton Capital, said: “The company has grown more than 10 times, and has built a great operation since Balderton first invested two years ago.
“But the founding team don't want to stop here, and have much greater ambition. We believe that carwow is in a position to lead the evolution of the car retail experience over the coming years.”