In some ways, we are in a golden age of used car sales, mainly because of the way digital technology is not only removing friction from those transactions, but taking away the pain long associated with buying a pre-owned vehicle (the poor used-car sales person, often ranked lower than even lawyers, politicians and reporters on the scale of disreputable living).
The latest evidence of that golden age comes from Indonesia, one of the world’s most populous countries, and a place where eCommerce and digital payments are gaining ground. A report this week said that an online used-car platform in that country called BeliMobilGue has raised $10 million in fresh capital in a Series A funding to help expand its offerings. The company — whose name reportedly means “Buy My Car” in the country’s official language — was founded in 2017, and last year raised $3.7 million in a previous round.
BeliMobilGuie is a joint venture between European and Indonesian firms.
Consumers who want to sell their cars via that platform reportedly seek an online price estimate. “If the owner is happy with the valuation, BeliMobilGue takes the vehicles in and, after a one-hour check attended in person by its testers, it arranges a sale to its network of over 1,000 dealers and private buyers. The entire process is targeted at one hour and is free for consumers,” according to the report.
The company reportedly operates 30 inspection stations across Jakarta — the country’s capital — and that new funding could help pay for an expanded presence in other parts of Indonesia. That’s apparently not all, either. BeliMobilGue wants to offering financing for car sales, perhaps with packages targeted at car dealers.
Used car sales are having a moment — underscoring the opportunity for digital platforms that focus on such vehicles. New car sales in the U.S. are reportedly set to decline 1.1 percent year-over-year in 2019, and sink below 17 million for the first time since 2014. The reasons? “Higher interest rates and a bevy of new cars coming off lease stand to push more customers into the used market in 2019,” according to CNBC.
More specifically, “we’ll see continued increases in the late-model used vehicles. The key difference in 2019 is we’ll see a mix of those used vehicles more reflective of the shift in demand for trucks,” according to a recent interview via Wards Auto. “Obviously, the used market lags in terms of the mix about three to four years. The year 2019 is when we’ll see a maturity in that used-car inventory mix.”
Car Loan Woes
Besides that, news over the last few days sounded an alarm on car loan delinquencies. There are more Americans who are at least three months delinquent on auto loans than has been seen across several decades — in fact, ever since the Federal Reserve Bank has been recording such data.
Companies that have been striving for stronger positions in in the digital market for used cars could potentially see gains, though that’s just speculation now. What’s not guesswork is that innovation has been steadily increasing in this space.
Take Online auto retailer Vroom. It recently announced a $146 million Series G funding round led by AutoNation. L Catterton, General Catalyst Partners, Fraser McCombs Capital and individual investors also participated in the round. Vroom offers thousands of low-mileage, reconditioned used vehicles that are delivered directly to consumers.
Launched in 2013, Vroom offers customers who buy a car off the platform seven days to test drive the vehicle after delivery, and allows them to return it if they are not fully satisfied. Sellers can take photos of their vehicles, then enter their VIN numbers through an app to receive a quote on the car value, which is determined through an algorithm.
Volkswagen, too, has made its own moves into the digital used car space. Its HeyCar platform lists high-margin used cars in order to target German pre-owned vehicle markets, where 95 percent of online sales are conducted through the platforms mobile.de and autoscout24.de.
The future looks bright for used car sales — thanks in no small part to digital technology.