New way to sell cars without classifieds – USA TODAY
MANHATTAN BEACH, Calif. — There’s a new way to sell cars, and it doesn’t involve classified ads or letting a stranger bring your car to a mechanic.
“We’re replacing the used car salesman with your mobile device,” says Allon Bloch, CEO of Vroom.
The company, along with Beepi, promises to eliminate the hassle of used-car selling, and purchase the car directly from you, at prices they say are comparable to third-party deals.
I just offered my 2012 Hyundai Elantra for sale to both sites, for the purposes of this review. While I’m not the sort who spends his weekends washing and caring for the car, the car is in average condition, with 50,000 miles and the original owner (me.)
The good news: Selling a car has never been this easy, at least for Vroom. You get to bypass the usual steps, and start at the website, where you type in the vehicle information number (VIN) and post some photos of the car. A cash offer of $10,000 made its way to my e-mail box within hours.
One caveat: Vroom doesn’t yet have an app, although the company promises that it will available in September. Users are directed from the website to using the mobile phone, where the iPhone 6 and 6 Plus doesn’t play nice with the site. So you won’t be able to upload photos, as directed, through Safari. The workaround is downloading the Google Chrome browser instead.
Both companies have raised millions in equity financing to become the new auto showroom.
Investors see huge potential in an online used car market that eliminates the hassle of going to the auto dealer showrooms.
Beepi has raised $300 million from a variety of sources, including Sherpa Ventures and Comerica Bank, while Vroom has brought in $54 million from General Catalyst Partners, Catterton Partners, former pro football-player-turned-auto-dealer John Elway and Jeffrey Boyd, former CEO of the Priceline Group.
Carvana, another alternative online used car re-seller, also raised $300 million, but it is more geared towards selling cars, or trading for used ones. Additionally, it directs consumers to the Southeast to pick up cars in Atlanta, or pay an average $1,450 for delivery instead.
Vroom offers free delivery, and Beepi is free too in the handful of states it operates in, or $999. All offer limited money-back guarantees.
To sell your car to Beepi, you don’t need to upload photos, just your VIN. Before making an offer, Beepi comes to inspect your car, with a tough 185-point look-see that it says will last 90 minutes. For me, it was actually two and a half hours, and the first thing inspector Dae Yu said, when he greeted me, is that “We reject two out of every three cars we look at.”
Or in other words, you’re as likely to get accepted to an Ivy League college as you are to have Beepi make you an offer.
For car buyers, this is fantastic. You’ll get a newer, ultra-clean car, with low miles and hardly any scratches or dents from Beepi.
Beepi rejected listing my car, primarily because of nicks and scratches. (The car isn’t for sale, but was put on the market for review purposes.)
Vroom CEO Bloch said his company is picky — it only resells 40% of the cars it buys to the public. The rest get sent to dealers and auctions.
The company can afford to be more liberal, because it’s trying to build a name for itself, he says.
“We’re trying to build up the brand,” says Bloch.
Meanwhile, a spokesman for the National Automobile Dealers Association isn’t concerned about the competition, pointing out that nearly 18.6 million used vehicles have sold in the first six months of 2015.
In a statement, the NADA said, “Many buyers prefer the conveniences offered by franchised new-car dealerships, where a consumer can trade-in their used vehicle, take a test drive, purchase another vehicle, new or used, and obtain financing all at one location. Additionally, only new-car dealerships sell manufacturer certified pre-owned vehicles that come with factory warranties, roadside assistance and other perks.”
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