Buying and Selling Cars Through a Mobile App

car selling

The first-ever mobile application making automobile transactions possible at the touch of a screen, Blinker eliminates the role of the middleman in the car buying, selling and financing process. How Blinker Works Blinker‘s focus is on facilitating a hassle-free experience for all stakeholders involved in an auto purchasing transaction. Blinker uses a lot of dealer […]

car selling

The first-ever mobile application making automobile transactions possible at the touch of a screen, Blinker eliminates the role of the middleman in the car buying, selling and financing process.

How Blinker Works

Blinker‘s focus is on facilitating a hassle-free experience for all stakeholders involved in an auto purchasing transaction. Blinker uses a lot of dealer tools used to execute trades, but it has leveraged technology to enhance the experience and create a solution that is executable online without any middlemen driving fees. This allows users to buy and sell cars for free on the platform.

The downloadable app simplifies the process of getting approved for credit, and all the user has to do is upload a picture of his driver’s license. Documents are signed with Docusign. The user posts a picture of the car she is selling and the fund transfer is done online, which eliminates the need for any physical interaction as the entire transaction takes place on users’ smartphones.

All transactions start with one picture of the car and, in less than three seconds, the company can find out all the details about the car from the year to the make, model, approximate value, and the number of miles it has been driven. The company has partnered with Carfax and Blackbook for these reports.

Blinker has its own patented technology. Out of 17 patents filed with the U.S. Patent Office, 13 have been issued.

The Blinker Team and Platform

The Blinker platform has the same credit requirements for auto finance as any other bank. It gives instant pre-approvals with a picture of a driver’s license and, upon authorization, for a soft credit pull. The idea is to have the customer approved first followed by the car. Customers have access to unique offers on each vehicle based on credit score, income, and their ability to pay. The platform does not see the seller, the buyer, or the car.

Currently operating in four states, Blinker’s model is able to generate great auto finance deals for its users. Blinker took its own equity to create a loan portfolio to prove the viability of the model. The business caters to a full spectrum of borrowers having FICO scores between 560 and 800. The loan-to-value (LTV) ratio is usually 20% less than the average dealer offer. The portfolio has faced no delinquencies, highlighting the success of the company’s lending algorithms.

The company has raised a total of $51 million in funding and onboarded 65 professionals in its Denver office, out of which 30 are engineers on the lending side. The company’s president was in senior management at Americredit, a giant in auto finance solutions. All of the above has given birth to a company that is rapidly capturing market share and mind share in the auto industry.

Blinker is now entering into a relationship with Allied Bank and talks are going on with other customers and member groups to expand its reach. Its foundation is to be a fee-based company. It wants to follow an asset light model with no inventory or loans on its books.

Blinker’s Selling Process

The car prices and terms of sale are displayed in the mobile app for full transparency. Car shoppers can set a filter for distance/location, and more, as they search for the perfect vehicle. The average price of cars available on the app is $14,000, but it is not restricted to any particular segment and has even sold a $105,000 Ferrari. Blinker has also partnered with Manheim Auctions, the largest car auctions company in the world, to sell its inventory directly to individuals. The company is extending into selling rental cars and partnering with OEMs to sell cars not picked by dealers.

On average, a Blinker seller gets $2,500 more on a trade than they do through a dealership. Buyers save an average of $2,000 as compared to buying from a dealer. Refinancing from Blinker helps the average customer save $130/ month.

The app has been able to garner a lot of support in a short time since launch. There have been over 175,000 downloads, and Blinker has been successful in generating $44 million in sales. That includes about 3,500 vehicles, 8,000 listings, and the funding of about 650 to 700 loans.

The Changing Auto Industry

Although there are a lot of companies in the market like Shift, Carmax, and Carvana, they are hampered by a model that charges 8%-10% of the sale price, serves only metros and/or focuses only on one part of the trade. There are no players in the market, like Blinker, that facilitate the entire transaction from listing and pricing to car finance. Blinker is able to execute transactions anywhere and anytime. All that is required is access to an internet connection and Blinker will be able to complete a car trade.

Currently, the company is completely operational in Colorado, Texas, Florida, and California. Six more states are ramping up for service. It is looking to expand across the U.S. soon and, by the end of 2018, Blinker hopes to be in all 50 states. The platform will ensure that it is free for buyer and seller. Its model is to generate fees via loans originated.

Target Customers and the Blinker Roadmap

When Blinker entered the marketplace, it had expected that the majority of its clients would be millennials. However, it realized that clients are of all ages and are buying and selling all types of cars. But to ensure optimum portfolio for its loan partners, Blinker does not finance cars below $8,000 in value or over 10 years old.

Blinker is on a mission to empower dealers and customers to transact through their smartphones. It is getting a lot of attention from national strategic partners that love the technology. Its main focus is on acquiring customers as its technology is completely built out. It will tie up with strategic partners to provide complete end-to-end transactions for members and provide revenue share opportunities to make it a win-win proposition. The aim is to become the pre-eminent platform for buying and selling used cars in the U.S.

Blinker’s Founder

Rod Buscher founded the company in 2013. He was into the brick-and-mortar auto space, operating in the industry since 1973. As cofounder of the John Elway dealership, partnering the legendary quarterback until selling the dealership in 2013 to launch Blinker, he has inside knowledge of how dealerships operate and cars are sold.

With deep domain expertise in the space, Buscher realized that people usually do not like what they get for their car trades through the dealer and are not satisfied with the financing experience. Using Craigslist for selling cars is not secure, and selling cars with liens is another headache. Blinker was born to solve this gap in service and provide an app which would “put people in control of buying, selling and financing cars.”

Buscher is out to revolutionize the car selling industry. He’s off to a good start.

Author:

Written by Heena Dhir.

Streamlining the Car Buying and Financing Experience

mercedes-benz auto lending

It takes time to purchase a vehicle. The car buyer has to do their due diligence, which usually requires countless Internet searches, usually by car brand—make and model—and comparisons between those under consideration, and those typically involve a look at available features and specs. After the consumer narrows down his or her search to the […]

mercedes-benz auto lending

It takes time to purchase a vehicle. The car buyer has to do their due diligence, which usually requires countless Internet searches, usually by car brand—make and model—and comparisons between those under consideration, and those typically involve a look at available features and specs. After the consumer narrows down his or her search to the right vehicles, she has to visit a few car lots, take a few for a test drive, discover that the car she wants isn’t available in her favorite color at the car lot closest to her home, and fill out endless reams of paperwork to apply for a loan. Then she has to wait for approval for a loan and delivery of her vehicle so she can drive it home. Depending on how many added features she orders, the process could take several hours over the course of a few days and weeks.

Thanks to the creative folks at AutoGravity, there is now a mobile app that makes the entire process easier and more streamlined.

What is AutoGravity?

AutoGravity is marketplace lending for car finance. The mobile app, available at the Apple store and Google Play, brings car shoppers together with dealers and financing companies to help consumers get the car they want at the dealer they want under the terms they want.

CEO Andy Hinrichs has 20 years experience in the automotive industry and auto financing on three different continents—Europe, Asia, and the US. Martin Prescher, the chief technical officer, has a Ph.D. in machine learning and astrophysics. Serge Vartanov is the chief marketing officer. These men and their team are the brain and muscle behind this mobile app revolutionizing auto financing.

AutoGravity introduced its first app for iOS last June and the app for Android following in July. A web-based version of the platform rolled out in August. Since then, they’ve seen more than 100,000 downloads and expect to hit a million by the end of this year. They’ve also made the top 100 finance apps on the Google Play list.

Year-to-date, the company has secured $50 million in funding, some of that coming from Daimler.

How People Buy Cars With AutoGravity

“Folks have a monthly budget for a car and go to a dealer to fit that budget,” said Vartanov. “So we built a proprietary database of dealers and show users all the dealers close to them.”

AutoGravity users can see each dealer on a map inside their smartphones or see a list with travel distances. They call the dealer with a simple click and view the available inventory of cars on the lot.

“We’re the digital glue between the driver and the dealer,” Vartanov said.

Once a user finds the car they want at the dealer they want, they can then submit a credit application on their phone and be pre-approved before they visit the dealer. They can pull in their personal information by scanning the back of their drivers license or linking to their LinkedIn profile. They then provide their social security number and hit “Submit.”

Vartanov said users can see up to four offers from four different lenders and apply for financing at any time from any location in 46 states.

For dealers, AutoGravity offers an API to facilitate financing through the marketplace right on their website. The user sees a widget that allows them to create an application.

On the lending side, AutoGravity works with lenders are the various stages of the lending process, from new loans to adding new vehicles to an account, refinancing, and leasing.

Following the Money

Since the app is free to download and use for auto consumers, AutoGravity has to make its money somehow. They receive compensation from dealers and lenders for the business they send through the marketplace.

“We generate healthy traffic for our lender and dealer partners,” Vartanov said.

It’s important, with so many moving parts, to ensure that car buyers and loan applicants are sent to the right dealers and lenders. All of that is taken care of by the machine learning programming inside the app. As car buyers search for vehicles and loans, the app learns their preferences.

“We learn what cars people click on, where they shop, and what their budget is, and we’re able to match users with the right deals,” Prescher said. “We optimize the user experience to find the right dealer and lender.”

Vartanov said more than half their users are millennials. Three quarters of them look at different cars and compare them before applying for financing. While they can offer new and used vehicles, most of the traffic they get is for used vehicles.

How AutoGravity Makes It Easier for Car Dealers

As if any of that isn’t enough, AutoGravity offers two white label products. The Fletcher Jones Auto Group, the largest Mercedes-Benz dealership, and Audi both have their own apps where their customers can shop for vehicles and get financing. Loyal Mercedes-Benz customers can go through all the steps in the Fletcher Jones app to get the car they want at the dealer they want under the financing terms that fit their budget. AutoGravity is looking for other dealer partnerships to round out this aspect of their business.

“Nobody else in the ecosystem that offers end-to-end car shopping can do this,” Vartanov said.

Prescher said people do not accept opaqueness as a part of the car buying process. They want transparency and ease of access, both of which AutoGravity provides. In the future, the company wants to offer more functionality inside the app to continue their mission of optimizing the car shopping experience and to make it more comprehensive. That might include electronic contracts, and more.

AutoGravity updates its platform every two weeks.

Author:

Allen Taylor

The Future of Financing and Vehicle Purchases

The Future of Financing and Vehicle Purchases

One question LendIt attendees got answered for them this year is, “What is the future of financing and purchasing vehicles?” The auto lending industry is one that is in serious transition as we speak. A panelist of insiders discussed the question on the table and here are the highlights. How Cars are Researched and Bought […]

The Future of Financing and Vehicle Purchases

One question LendIt attendees got answered for them this year is, “What is the future of financing and purchasing vehicles?” The auto lending industry is one that is in serious transition as we speak. A panelist of insiders discussed the question on the table and here are the highlights.

How Cars are Researched and Bought Today

Brad Rogers, chief operating officer of RouteOne, LLC made the observation that “the way cars are researched today is not the same as it was five years ago.” Anyone who has purchased a vehicle in the last couple of years can vouch for that. RouteOne provides online application and financing solutions for auto dealers. They process 50 million credit applications annually, which is why Rogers can say that customers want more information up front.

AutoFi President and Co-Founder Jonathan Palan said the innovation process for auto financing is driven by players outside of the industry.

He could mean technology companies like AutoGravity, a company that connects auto dealers and financing options with consumers ready to buy through a mobile app. Serge Vartanov is the company’s chief marketing officer and co-founder. Based on how users interact with AutoGravity’s mobile app, he’s narrowed car buyers into two segments.

“Some car buyers are less brand loyal and more emotional,” he said. “They like to compare vehicles and dealerships then get out of the transaction quickly. The other segment is more brand loyal.” The brand-loyal segment will move from one BMW, or their favorite vehicle brand, to the next while other buyers will purchase a car from the same dealer three or four years in a row. “They still want a fantastic digital customer experience.”

Sam Ellis, co-founder and CEO of DriveUp, said it’s very important to be transparent with consumers and, of course, not to violate consumer finance laws. DriverUp is a web portal that connects dealers and financiers with car buyers through a search feature online.

Blinker is another mobile app that allows consumers to buy and sell vehicles seamlessly. Rather than a focus on dealerships, Blinker connects individual sellers with individual buyers. Danny Martinez, the company’s president, said, “Used cars are sold primarily through dealerships, but a third are sold privately. With the advent of technology, consumers can sell cars without dealerships and buyers are able to transact digitally.”

Martinez sees Blinker as a “thinner” intermediary than an auto dealer. Sellers can get a better value by selling their car to an individual than they’ll ever get on a trade-in. Meanwhile, buyers can get a better car at a better price.

Palan said the average time car buyers spend in an auto dealer is 3.1 hours. “Anything you can do reduce that is good,” he said.

The customer wants to see what they want digitally, but they also want to hop offline and talk to somebody without having information repeated,” Martinez said.

Since titling is different from state to state, Martinez said handling that transaction digitally is a huge challenge for the industry to overcome.

Will Lenders Offer Separate Direct, Indirect Buying Channels?

Moderaor Craig Schleicher of PwC asked the panel if lenders will ever offer separate channels for direct and indirect buying processes.

Palan said the direct channel can be misleading. “The car buyer can go to a website and get ‘flipped’, so there needs to be a standard platform that allows each lender to offer a loan.”

“The average consumer doesn’t know the difference between direct and indirect auto financing,” Vartanov said, “but every lender cares.” He also said consumers want financing approved and the vehicle ready before they enter the dealership, which is a feature built into AutoGravity. He loves the idea of car buyers searching for the vehicle they want while lying in bed and getting approved for a loan at the same time.

It’s pretty clear from the current slate of auto buying and financing technologies that the future of car buying, selling, and financing is here, but I’m convinced it will only get better. It’s time to make the consumer aware.