, a car-buying referee, is streamlining the car deal, helping buyers to sidestep the frustration that goes along with negotiating the sale of a new or used car.
The idea was hatched in LA by Mike Pena after he suffered through a sale with his brother. Together with CMU student Todd Medema Autoref was born. The company, which got a boost from CMU's Project Olympus and Greenlighting Startups, is currently in Alpha Lab where a team of seven is poised to expand the service nationwide through more than 5,200 participating car dealerships.
While there is no obvious shortage of car-buying websites out there, none of them actually seals the deal, explains Michael Bailey of Autoref. The website not only gives buyers a no-obligation final offer, guaranteed for 72 hours, but offers financing through the dealership.
And AutoRef is free. AutoRef customers report spending an average of 45 minutes at dealerships compared to three hours without the site, says Bailey. Customers who have purchased vehicles through the Autoref report saving an average of 11 percent off the sticker price.
And dealerships and car salesman love it.
“One of the biggest annoyances in the car industry is to have a customer come in, shop around, test drive, and then leave and never come back,” says Bailey. “Salespeople work on commission. Often they’ll waste half their day and have nothing to show for it.”
Here's how it works. Buyers select the make and model of the car and provide their zip code. The site then offers a list of available vehicles at participating dealers in the region. Buyers can compare models, view a Carfax report, view images and ask questions.
Selected cars then go into your “garage” and up to three cars may be submitted for an offer, with or without dealership financing. AutoRef currently isn’t able to negotiate with a trade-in, but that feature is coming soon, Bailey says.
When offers are received, usually within a day, buyers have 72 hours to visit the dealers, test drive the cars and respond. In this writer’s experience, the prices on the new cars dropped at by at least $2000 while a used car, which was priced fairly to begin with, stayed the same.
One of the keys behind the pricing is dealers have the ability to see what other dealers are offering on the same deal. Autoref receives a commission on every car sold.
“Dealers are used to people coming in and saying ‘the guy down the street can give me a better price,’” says Bailey. “This way dealers can see exactly what the other dealers are offering.”
The company plans to expand significantly this fall and is looking for five to 15 people for its sales and tech team.
Writer: Deb Smit
Source: Michael Bailey, Autoref