A little over a year ago, I bought a car for the first time since high school. My wife and I were expecting our first child and felt it was finally a necessity.
I didn’t want to spend the money for a new car, but didn’t really know where to look for used cars without going to a dealer (which I didn’t want to do). I looked on eBay Motors, Autotrader and Craigslist but didn’t feel comfortable with any of them. And then I lucked out: A relative was selling a little-used, safe, family-friendly car that fit into our budget. I jumped on it, and the car-buying process from that point onward became relatively easy.
When I mentioned this experience to Alejandro Resnik, CEO of a new car-shopping marketplace called Beepi, I could hear him smiling through the phone. He said that’s what he and his employees say about their new company: They want to make the process as easy as buying from, or selling to, a family member.
Today, the Los Altos, Calif.-based startup announced a $5 million Series A investment, led by Redpoint Ventures, to help bring that process to the general public.
Here’s how Beepi works. Car sellers go to Beepi.com and enter in the basics about their car — make, model, mileage, etc. — and Beepi gives the seller a quote that the company says will always be $1000 higher than a dealer will pay.
If the seller agrees to the initial quote, Beepi will schedule a time to send an inspector to meet the seller to take a look at the car. Yes, the startup employs its own full-time inspectors.
If the car passes the inspection, it gets listed on the Beepi marketplace with either the initial quoted selling price or a price that could be a little higher or lower depending on whether it has, say, a great sound system that wasn’t initially noted or, on the other hand, needs new tires. (If it doesn’t pass the inspection, it doesn’t get listed.)
The listing includes a bunch of photos taken by the inspector, a pretty detailed inspection report, information on dents and dimples, and a score based on its accident record. Click here to see a real Beepi listing. There’s a lot of information there.
And Beepi thinks that should be just about all the information necessary to make a buying decision. As a result, there’s no negotiation on price. There are also no traditional test drives. Instead, Beepi lets the car shopper directly contact the inspector with questions. It also gives buyers a 10-day, 1,000-mile return period — what it calls an “extended test drive” — and a 30-day, 3,000-mile service and parts warranty.
“If only two-thirds of the cars we deliver are not returned, Beepi will still make a lot of sense economically,” Resnik said.
Still, I imagine there’s a large subset of car seekers who would never buy a used car without a traditional test drive, which could end up being a huge hurdle. Beepi is betting — literally — that there are enough buyers who will make such a huge purchase sight unseen; if it doesn’t sell a car in 30 days, Beepi is guaranteeing sellers that it will buy it for the listed price itself. Then, it will re-list the car on the site.
Upon sale, Beepi picks up the car from the seller, washes and details it and delivers it to the buyer, wrapped in a bow and all. Nice touch. Beepi takes a nine percent cut of each sale.
In addition to the no-test-drive rule, the company faces some other challenges. Though it’s an online-first company, the employment of its own team of inspectors could slow down expansion — the company is initially serving only the San Francisco Bay area. That said, the inspector feature is certainly a differentiator, even if it’s a necessity due to the lack of test drives.
And, at a very basic level, building up demand on both ends of a marketplace is not easy. The company’s initial outreach has involved contacting car sellers on Craigslist. It says it hasn’t, and won’t, work with dealers. Over time, Resnik says he is counting on many Beepi sellers to also become Beepi buyers and vice versa. We’ll see.
Despite the question marks, Beepi looks to be taking a unique approach to what can be a miserable experience. If I could go back a year, and was living around San Francisco, I would probably give it a try.