Through benchmark studies, we explore the performance of PBE density functional theory, with and without Grimme's dispersion correction (DFT-D3), in predicting spectroscopic properties for molecules interacting with rare gas matrices. Here, a periodic-dispersion corrected model of matrix embedding is used for the first time. We use PBE-D3 to determine the equilibrium structures and harmonic vibrational frequencies of carbon monoxide in interaction with small Ar clusters (CO-Arn, n = 1, 2, 3), with an Ar surface and embedded in an Ar matrix. Our results show a converging trend for both the vibrational frequencies and binding energies when going from the gas-phase to a fully periodic approach describing CO embedding in Ar. This trend is explained in terms of solvation effects, as CO is expected to alter the structure of the Ar matrix. Due to a competition between CO-Ar interactions and Ar-Ar interactions, perturbations caused by the presence of CO are found to extend over several Å in the matrix. Accordingly, it is mandatory to fully relax rare gas matrices when studying their interaction with embedded molecules. Moreover, we show that the binding energy per Ar is almost constant (∼-130 cm(-1) atom(-1)) regardless of the environment of the CO molecule. Finally, we show that the concentration of the solute into the cold matrix influences the spectroscopic parameters of molecules embedded into cold matrices. We suggest hence that several cautions should be taken before comparing these parameters to gas phase measurements and to theoretical data of isolated species.