ford vehicles

Tech Startups Breaking Into the Used Car Industry

Whether you're checking our new vehicles or you want to buy a pre-owned vehicle, it's never been easier to find the perfect car for you. According to Automotive News, it could get even easier, depending on how good you are with computers.

Beepi, a Silicon Valley startup, along with Vroom, Shift and Carvana, are using new technology in an attempt to change the way a consumer can buy a pre-owned vehicle. Lately, thousands of Silicon Valley wannabes are trying desperately to become "The Uber of [fill in the blank]" or the "Airbnb of X." Now, these companies want to be application that disrupts the car buying process.

"Like Amazon took the Internet and applied it to the retail space, we and a bunch of other companies are taking technology and looking to apply it to the largest retail space in the world," said Toby Russell of Shift, "The U.S. auto market."

There are many used vehicle options out there, but these companies are relatively new to the auto market. And it's not clear if car buyers are going to trust a digital startup on the other side of the country to help them buy a pre-owned vehicle.

"You can buy a pair of shoes online and if you don't like them, you can just send them back," said Owen Savir, co-founder of Beepi, to Automotive News. "So people now trust, if a company says, 'Buy a car online and if you don't like it, return it,' they believe you. Of course, you need to keep your word and be a good company, but the notion is there."

Some people within the industry believe that these startups will eat into the used auto industry, but Alan Haig, the head of Haig Partners in Fort Lauderdale, Florida, doesn't think it'll be an issue.

"Parts and service is critical for profitability. These used-car operations, to my knowledge, don't have any fixed operations," said Haig.

That puts them at a major disadvantage compared to the local car dealerships where most people buy a pre-owned vehicle.

Haig added that used car franchise dealers have been so successful because of the parts and services operations they offer. He believes that physically acquiring the vehicle, cleaning the vehicle, marketing the vehicle and transferring the vehicle has been successfully done by existing used car dealerships. Taking these transactions into the online space may be a dead end for most drivers.

There are still plenty of options available to you if you want to buy a pre-owned vehicle. Ford -- a company that owns 14.7% of the entire U.S. auto share and generates annual profits of $3.1 billion -- made $144 billion in revenue in 2014. Companies don't do that by not having excellent used cars and trucks.

If you're in the Washington area and are thinking about buying a used car or truck, check out Sunset Ford today!

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