ValG

The average dealership doesn't know if they're going to keep a car for their own inventory or going to sell it at auction/wholesale until they own it. Standard procedure is to purchase a car (purchase = take it on trade-in/buy it) and then have the mechanics inspect it to see what it needs done on it to get it back out to sell. If it's too expensive, they wholesale/auction it. This means, 90% of the time, they default to offering you the lowest value.

1. Warranty - We've actually talked about a lot of these items, including adding a warranty on top of the cars we represent. We'd be able to do this because we do a mechanical inspection on each car. The 1 thing we can't do is add CPO (that's manufacturer only).

2. Experienced Sales People - sales person turnover is roughly 50% per year at the average dealership. Because of this, dealerships don't spent money on sales person training. Experienced sales people are difficult to get.

We're working on it and want to add more value than dealerships for less!

I'd love to talk more. If you're interested, please email me at val@instamotor.com

CC, it's actually a little more insidious than that; dealerships have always survived on the asymmetry of information between dealer and buyer. Not to sensationalize, this happens in roughly 30% of sales, (usually by the sales person without actually thinking about it)... 1. A person has seen a car online that they want. They may do the legwork and research the car. 2. The walk into the dealership looking to buy the car. The 1 thing people don't think about (generally) is the financing. 3. They find out that they don't have the credit, income, etc... to actually finance that car. 4. The sales person "places" them on a new car, one that they haven't researched. 5. The buyer gets caught up in the moment, falls in love with a car etc... They buy the car for way more than its worth.

This is why Dealers hate companies like TrueCar. It destroys the asymmetry. It's also why dealerships are getting squeezed; the average deal takes a few hours, in that time, people can use their phones to check the car they're buying.

It's an interesting dynamic.

Actually Sy and I (2 of the 3 co-founders) met on HN after a similar post (like 6 months ago?). It wasn't the one you're talking about, but had a similar theme.

Awesome feedback. We'll eat this up and spit something improved this weekend. We really appreciate it!

Part 2 is adding that selling side, and we will do it, but we're not there yet.

1. Cars with Loans on them. This actually is a hassle, especially in states where the loan holder owns the title. You literally can't just sign the title over to them. In most cases, the buyer has to pay for the car, the seller uses that payment to pay off the loan and then they get the title to transfer over. There has to be a ton of trust there. Even with a bill of sale, everyone is afraid of getting screwed. 2. The straight craigslist process is not quite that easy, respond to emails, some of them from people not even really interested in the car. You have to go back and forth scheduling viewing and test drives. Roughly 40% of the time, you have to drive out to meet someone. If they no-show? Or low ball you? Or don't want it? Time is wasted at all of these steps. 3. Some people hate negotiating, and don't know what a fair price is. We help. 4. In Cali at least, you need Reg 262 for vehicle transfers. It's a form you can only get directly from the DMV (can't print it online). I went to the SF DMV the other day to pick some up, the line was over 2 hours, just to get a form. Needless to say, I put it off for another day.

I agree, for some people it makes the most sense to just sell it themselves. But it's not always a straight shot.

1. 90% of questions asked about a car are standard (e.g. what's the history, what's the mechanical, is it a clean carfax). We can pre-empt this by having the answer ready.

2. For answers we don't have, it's the standard "let me get back to you" and ask the seller.

Thanks for the feedback, it looks like a lot of people are confused by that. We'll make changes and update it tonight.

Thanks again guys, really appreciate it!

Dealer trade-in pricing generally uses a standard called "black book". They base the pricing on the type of car the the condition of the vehilce. The discount of retail to black book varies, but can be huge (4k+). When dealers buy a car off trade-in, they have to price in the fact that they have a lot of overhead to get the car sold. Dealers also price risk into the car value, if it's not a desirable car, they will sell it at auction. They have to make sure they stay under the auction value.

Individual buyers don't have that. That spread is pretty large and we can take advantage of that.

The paperwork is actually pretty straight forward if you have a notary public available (we do). We can pull up all the paperwork necessary and generally get it done at each persons convenience. The biggest issue is actually trust between the parties and us. That's what we have to work on.

1. How do we handle negotiations: We talk to you, the seller and work to find a fair market price for the car. We have dealership level tools available for this. We come to an agreement on the minimum price you'd take. From there, we negotiate with the potential buyer and can take an offer up to the minimum we agreed upon. Anything lower we'd need explicit permission from you.

2. The Buyer makes a cashiers check out directly to the the seller. We deliver it to them.

3. The vehicles are listed everywhere we can, including some of the traditional places like Cars.com and autotrader. For certain cars, we also do very specialized listings (e.g. for Porsches we list or Porsche enthusiast forums, etc...).

4. We handle it all, including smog checks.

5. We get paid at the time of the transaction usually directly with proceeds from the sale.

6. With performance vehicles we are very very diligent about this, currently doing it manually. We represent a few very high value Porsches. We research all of the buyers (again manually, but we'll work on that) to see if they're legitimate and also work to get commitments from them. If we see an 18YO kid that wants to test drive a Porsche, we won't necessarily disallow it, but we'll make sure that he has the financial resources and intent to purchase the vehicle. It's not perfect, we're still working on this, but I can tell you all of our owners have been very very happy with the people test driving so far.

--Edit-- We currently offer CarFax. One thing we have to improve is enumerating the depth of service that we provide.

Thanks for the note. Yeah you're right. We'll make the update to clarify that. We had it as "saved" before, but that didn't seem to make sense. Still trying to find the right wording, but we'll update it today or over the weekend most likely. Thank you!