Tech-savvy, forward-thinking Americans have displayed a remarkable affinity for online shopping. They buy sofas they’ve never sat on and clothes they’ve never tried on—but a used car they’ve never driven? Not so fast. At least that’s one takeaway from the report in Automotive News that Beepi, the online used-car marketplace, is being shuttered.
Beepi attempted to match up used-car sellers with buyers in a peer-to-peer marketplace that streamlined the process. Sellers were guaranteed a price for their car, which was higher than a dealer trade-in offer. Beepi representatives checked over the cars (performing a 240-point inspection). The offer price was guaranteed, with Beepi buying the car if it didn’t sell in 30 days. Buyers could peruse the automotive offerings on Beepi’s website, secure in the knowledge that the vehicles had passed the company’s inspection. Prices were non-negotiable, although Beepi did handle all DMV paperwork and delivery.
There were no test drives. Buyers didn’t see their new ride in person until it arrived in their driveway with a big bow on top. A 10-day money-back guarantee was supposed to allay any worries that a car might not be as promised or that a buyer simply might not like it.
It’s unknown whether Beepi’s difficulties were due to the reluctance of used-car buyers and sellers to commit to e-commerce, to margins being squeezed by declining used-car prices, or to some other factor. The company, with an operating area that spanned the state of California, currently has some 200-plus cars on its website; it’s being folded into an auto-retailing startup called Fair.
The Automotive News report identifies other companies operating in this same space—Shift, Vroom, and Carvana—and notes that they have raised $740 million in venture-capital funding. (We recently put several online used-car-selling services to the test, listing cars of our own for sale.) Which may prove only that getting money from venture capitalists to finance the dream of turning used-car buying into a frictionless point-and-click experience is easier than getting actual consumers to buy a used car online, sight unseen.
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