Ever tried to sell your car through an online marketplace such as Autoscout24, Speurders or Marktplaats? Well I did, and it turned out to be quite a hassle. People tend to bid but show not a single sign of interest after they placed their bid, they do not react on emails, or try to push the price way further down while they eventually show up (someone wanted me, almost pressing, to agree on almost half of the price we first agreed on). Not speaking of all “really interested” buyers who are in the delusion of being expert race drivers during test drives.
On the other hand, when it comes to buying a car the experience is extremely important. However, also here there are a couple of hurdles: a lack of trust in dealerships due to unknown reputation and non-transparent deal structures. Furthermore, information asymmetry plays a major role as there might be fraudulent behaviour due to not enclosing the real service history (including accident damage) or even keeping silent about odometer rollbacks. Lastly, most people are not feeling comfortable to negotiate with slick car sales people. In short, there is always a chance of paying too much for a new car or even a chance to buy a lemon (Akerlof, 1970). Platforms, such as Carsome, introduce new ways of selling your car in a quick and convenient way.
Carsome is a relatively new online platform which provides a one stop solution for the process of purchasing and selling cars. For now, it is mainly Asian-based, but they are ready to expand as they recently received an additional $2M in a Series A funding round (Crunchbase, 2016). The platform almost instantly connects its users, which are dealerships and individuals, to each other and already helped car buyers to save more than $120k in their first year (Madhukar, 2015). Their goal is to make car buying and selling smarter and easier. By taking advantage of their platform Carsome is able to provide its users with hassle and haggle-free experience when it comes to purchasing and selling a car.
The platform allows buyers to compare up to five transparent “WYSIWYG” offers without hidden fees from respected dealers in their surroundings upfront. However, they also enable users to sell their car through dealers through the offers they receive. People can sell their car to numerous parties such as dealerships and trading parties by accepting their offers. Timing here is a really strong point of the platform as selling your car is possible within less than 30 minutes. So, although the platform has some similarities when compared to the Dutch websites such as ikwilvanmijnautoaf.nl and wijkopenautos.nl it is way more focussed at the consumer and allows consumers to interact with the dealers who are willing to sell them a car.
Besides these two main services the platform is now trying to attract more users by providing them with free tools such as a cost-of-ownership calculator and help with getting the right insurance at the lowest price.
One of the most interesting aspects of the Carsome platform is that it really takes a different approach than the online car selling and buying businesses existent in the Netherlands and tries to provide consumer with more security. The platform acts more as a consumer-oriented intermediary than as a car dealer. If you like they arrange everything after you discovered your car. This includes all paperwork, insurance, and even delivery when you bought your car (Madhukar, 2015). I really think the platform has the potential to reshape the car industry and the way people experience car buying as this platform with their pre-negotiated prices provides a win-win for both sides. However, one of the negative sides is that some people still would like to experience a car in real-life. This hurdle can cause some problems when they would like to expand to more experience oriented.
Author: Glenn de Jong
Akerlof, George A. (1970). “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism”. Quarterly Journal of Economics (The MIT Press) 84 (3): 488–500. doi:10.2307/1879431.
Crunchbase (2016), Carsome Overview, Retrieved from https://www.crunchbase.com/organization/carsome#/entity, 5th of March, 2016
Madhukar, A. (2015). “Here’s The Malaysian Car-Discovery Platform That Has Already Saved RM500k For Its Users” Vulcan Post, Visited at: 09-03-2016 Retrieved from https://vulcanpost.com/285971/carsome-my-malaysian-startup-revolutionise-car-industry/