

Ask HN: Shouldn't there be a better way to buy a car? - djsamson

I was sitting in Finance class today and my professor was explaining how he decided on buying a new Mazda Miata. But instead of paying the asking price or going to our local dealer and negotiating, he called and submitted the price he'd be willing to pay to every Mazda dealership in our area, even some up to 500 miles away. He figured even with flying out somewhere and driving it back he still ends up saving money.<p>This got me thinking. Why isn't there a disruptive startup that helps prospective buyers submit bids to dealerships? A buyer would determine what type of car/features he would want and submit it to the service. Then the startup would automatically send the information/bid to however many dealerships of that brand was in the selected mileage he was willing to travel to. This would make car dealerships of the same brand compete with each other which would result in a lower price for the consumer.<p>This startup could monetize from either angle. I'm guessing car buyers would be willing to spend a small fee ($25-$50) if it meant saving them hundreds or thousands. Meanwhile, dealers might even pay for the "leads."<p>Is there already something like this? Is this viable?
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erik_landerholm
That's exactly what we do (<http://carwoo.com>) and it's free to shop one car.

Acting as a buyer's agent is tough as you are considered an autobroker and
there is a ton of state level laws around this kind of business. Some of them
are extremely archaic, but are kept in places by an extremely powerful lobby
organization.

If you are interested look up the battle TrueCar became embroiled in recently
because of some decisions they made in their business model. The end result
was they lost over half their paying dealer network and half their revenue in
a matter of a couple of weeks. They were disallowed from operating in a dozen
or more states over night.

They have recently had to completely change their product to come into
compliance. Their aint no lobby like an auto industry lobby! :)

It's a very complicated industry to move into successfully. We have done a
good job (IMO) of navigating the mine field while offering a compelling
service to Consumers and Dealers.

~~~
erik_landerholm
Also, we used to charge consumers for their first 'deal' (as we call it). This
allowed us to create the nation's largest New Car Dealer Network, but most
consumers are unwilling to pay for this kind of service. It did allow us to
build a huge network quickly (by auto industry standards) which allows us to
avoid most of the 'no coverage' issues that all other automotive sites have.

~~~
stjarnljuset
So if you're no longer charging consumers for their first deal, are you
charging dealerships?

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erik_landerholm
yes. It's a freemium model for dealerships ATM, but we reserve the right to
change it whenever we feel like it! :)

The pay service allows dealerships to see data and have access to tools that
help them be more competitive and make better decisions.

NO one ever gets to pay for placement or for access to our customers.

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shanecleveland
I was thinking along the same lines after just reading the headline. Have the
dealership come to you and compete on price. I would guess that dealerships
would rather not work this way. But they may see it as a good way to get
buyers in the door. I would want to know there wouldn't be any bait-and-switch
trickery going on.

Here is an interesting take on the use of Game Theory with the technique you
describe:

[http://www.getrichslowly.org/blog/2012/04/26/the-best-way-
to...](http://www.getrichslowly.org/blog/2012/04/26/the-best-way-to-buy-a-new-
car-2/)

AND

<http://bigthink.com/ideas/41819>

Perhaps this idea can be packaged into an app.

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dwj
I used carcostcanada.com to buy my Ford Edge 5 years ago - it works in the way
you describe. Our local dealer wouldn't even match the lowest quote I got from
the site. Even with a bunch of haggling, his best price was $1k more than the
no-haggle price I got from the internet!

The point is: these sites already exist, and you really should use them to buy
your next car. Haggling is so inefficient.

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stjarnljuset
Carwoo <http://carwoo.com> does something similar where the buyer submits what
kind of car they're looking for, and local dealerships will submit bids, after
which you can send them a counteroffer. The last time I used it was 2 years
ago so wouldn't know if they've changed features since then.

~~~
djsamson
Carwoo sounds interesting and it is similar to what I was thinking. But I
think I might be imagining something more aggressive, where the startup sends
an e-mail/fax/phone call to dealerships on the customers behalf. Acting as
their "agent" almost. Also, it seems CarWoo only includes partnered
dealerships. With the method I described a buyer would be able to contact
every dealership of their interest. The only issue with this is that since the
startup would be more "customer oriented" rather than dealer, it would
probably have to charge customers (unlike Carwoo) instead of charging dealers
like CarWoo.

~~~
stjarnljuset
I think I paid ~$60 for the service that they're offering for free now.

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aundumla
<http://carwoo.com/> ?

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moocow01
Isnt this what carsdirect.com does?

