There are many competitors in the automotive market. When you drive down the street, you can see automotive dealerships just about anywhere. The market is saturated with new car dealers and used car dealerships alike. But, it seems that the used car market is growing lately. Large scale dealerships like Carmax are re-defining the used car industry with their super car lots and it appears there is another player on the field.
A used car dealership that is backed by none other than John Elway, former football quarterback for the Denver Broncos, is on its way to have $300 million in used car sales this year. This New York based startup has raised 19 million dollars in venture funding and $35 million in debt funding. Other players backing the company include Autonation and Blockbuster CEO Steve Berrard.
When the company launched in 2013, it did $106 million in used car auto sales. Vroom works by taking ownership of the cars they list, unlike AutoTrader or Craigslist and provides a “white glove” service that is offered throughout the sale of the vehicle. People who want to list their vehicle on Vroom just need to provide a VIN and some photos, which will get them an appraisal from Vroom.
Paperwork is then FedExed to the custome, and the vehicle is picked up and brought to their reconditioning center in Texas. Once the vehicle is ready for sale, it is listed with a price and there is no negotiation available to the customer. Prices typically range between 7% and 8% below market value, and they offer nationwide delivery free to customers. They also offer a seven day money back guarantee and have had very few vehicles returned to date.
Vroom is working to launch paperwork signing via DocuSign to make it even easier for the consumer to purchase a vehicle online. They aim to increase their inventory, and hubs around the U.S. so that they can deliver vehicles to customers within 24 hours of the purchase being completed. Coming in August, Vroom will offer financing digitally as well, so that the customer can complete the entire transaction online with Vroom.