The peer-to-peer (P2P) economy is making inroads in yet another field. Over the past few years, several companies have emerged to bring the P2P approach to used car buying, taking care of the whole process online without the need for a dealership. Several have mobile apps so you can even do your car shopping via your smartphone or other mobile device.
The services are all established within a geographical area and jockeying to be the established nationwide P2P used car service. Each one has a slightly different business model and perspective on the car buying process. In alphabetical order, a few of the more noteworthy companies are listed below.
- Beepi – Beepi covers the West Coast and the Southwest, as well as Florida. Potential sellers meet with a Beepi inspector to fully go over the car and certify that it is suitable for sale by Beepi standards. Sellers drive the car up until the time a sale is completed and Beepi arrives to pick up the car.
Buyers can select their car from all the choices listed on the Beepi website. After a purchase, the buyer has ten days to change their mind and receive a full refund. Should that happen, Beepi keeps the car — sellers don’t have to worry about a return. Shipping is free in Washington, California, Texas, Arizona, and Florida, and only $999 in the other coverage states like Nevada, Oregon, Utah, Colorado, and New Mexico.
- Carvana – Carvana has the South and Southeast covered with locations in Atlanta, Nashville, Charlotte, Birmingham, Houston, and Dallas. Delivery is free within those areas and arranged through a third party elsewhere.
Carvana is less of a P2P than an online showroom and sales group. They not only buy from individuals, but also from auctions and auto finance companies that clear their leased car inventories. The cars are inspected and refurbished at a Carvana hub, then offered for online sale.
Carvana offers buyers a 360° view of each car that includes both special features and imperfections — they are making a conscious effort to distinguish themselves as the honest choice. If you change your mind, you have seven days to return the car.
- Shift – Shift Technologies has created the site driveshift.com as their P2P portal. Their process is a bit different, as they promise to bring you a physical test drive within 45 minutes in San Francisco and Los Angeles. Shift also offers 150-point inspections to verify vehicles, and a seven-day return policy.
- TRED – Seattle-based TRED began as a service to sell cars, agreeing to buy if dealers undervalued their car, but has evolved into a P2P car service as company founders realized they could cut the dealer out of the process entirely. Their business model appears to be a more pure P2P, similar to Beepi.
- Vroom – For Vroom, it's a 126-point inspection and a seven-day test drive period. Vroom cars are reconditioned and certified. You can "reserve" any car you like with a refundable $500 deposit while you decide. Vroom offers free shipping anywhere within the U.S., along with a complementary full tank of gas. Cars come with a 90-day/6,000 mile warranty. Roadside assistance options are also available.
Paperwork is done online as much as possible, and any remaining paperwork is dealt with at the time of pickup/delivery. Sites offer their own financing or have financing connections. Some offer more creative ways to buy — at Beepi, you can even purchase using Bitcoins.
All of these companies are making their money by taking the markup slice that would have normally gone to a dealership. With limited overhead, the P2P crowd is usually able to offer both the seller and buyer a better deal than they would have received at a used car lot.
While P2P auto outlets are gaining momentum, your neighborhood franchise dealership is not going away because new cars still have to be sold through dealerships. If you would still rather shop for your used car the traditional way, that's fine — but at least you now have several viable alternatives online.
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