Business Idea: Car Swop

Foxhound5366

Foxhound5366

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Honestly guys, why doesn't this exist yet?

I think we've all had the same idea: wouldn't it be cool if I could drive in to a large car lot, get my car valued, and then be directed to a row of cars that have all been certified as mechanically sound (so that I've got peace of mind) and that are all in the same price band as my car. I can pick any one I want, apply for finance approval and get approved on the spot (even better - I can get pre-accredited online for car financing up to a certain amount to speed up things on the lot) and drive off with my replacement car.

How hard is it to really make this happen? Places like Burchmores and Car King already have huge lots of cars. They also have relationships with banks. All it takes is a bit of a business mind to iron out the wrinkles, but I think it's very doable.

A single business like that will dominate the used car industry overnight, so there is surely a business case there even at low profit margins to make the whole thing more attractive.
 
Wow, not a single nibble on this idea, huh?

Tell me y'all aren't content being milked by both your car's normal depreciation AND the profit that car dealers make upon both the car you're trading in and the one you're buying.

That's pretty much the reason you can't trade in your car normally and get something in a similar class - you're forced to keep heading downwards.
 
artistzzz said:
I think car dealers already offer this upon request.
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Yeah but it's not the same thing, because the normal dealer is still going to offer you a lower-than-normal trade-in value (so they make some profit when re-selling your old car) and then they're going to have loaded additional profit onto the car you want to buy (never mind the R5 000+ 'on the road' costs). The net effect is you drive in with a Ford Fiesta and you 'swop' it for a Toyota Etios (i.e. you're heading down the way -> not staying anywhere near in the same class as your current car).
 
Ok so you wanting to run a non-profit car swop business, erm..

2hnd cars can be fantastically dodgy and potentially insanely expensive to repair. There's a good reason why dealers generally offer rubbish trade-ins(especially for out of motorplan vehicles) its to leave adequate margin for risk and still make a profit.

You haven't thought this one through or probably you don't appreciate the risk of trading in 2hnd cars.
 
airborne said:
Ok so you wanting to run a non-profit car swop business, erm..

2hnd cars can be fantastically dodgy and potentially insanely expensive to repair. There's a good reason why dealers generally offer rubbish trade-ins(especially for out of motorplan vehicles) its to leave adequate margin for risk and still make a profit.
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Not non-profit ... just a new business model: low profit per transaction offset by higher volumes. If you want to claim that business model doesn't work, just look to McDonalds.

We also need to move the focus off dealers trying to protect themselves against risk by over-charging and under-paying, towards the customer (i.e. you and me - so you really ought to be in favour of this approach). What's in the customer's best interest is getting a car that's basically the same value as what they currently have, with nothing other than admin fees and the cost of a comprehensive vehicle inspection to pay for.

Here's to hoping that innovation prevails and something like this comes to the pre-owned car market.
 
Comparing this idea to Macdonalds illustrates you have no clue on the pitfalls of trading in motor vehicles.

If I trade my Toyota for a similar value Hyundai and either of the cars has say an automatic gearbox failure(just a random failure never mind crooks that knowingly trade their dodgy cars in to avoid the repair bill) that costs R40k to repair the week after the trade who covers that expense?
 
Why is this any different from buying and selling a car conventionally? And if your car needs replacing due to declining resale value, what is the point of exchanging it for one of equal value?
 
garp said:
Why is this any different from buying and selling a car conventionally? And if your car needs replacing due to declining resale value, what is the point of exchanging it for one of equal value?
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Yes, I've already addressed why above. And it's human nature to want change, right? Do you disagree that there doesn't exist a massive market of car buyers who want to drive a new car for the sake of change even if it doesn't improve their car's resale value (at least they won't be any worse off)?
 
airborne said:
Comparing this idea to Macdonalds illustrates you have no clue on the pitfalls of trading in motor vehicles.

If I trade my Toyota for a similar value Hyundai and either of the cars has say an automatic gearbox failure(just a random failure never mind crooks that knowingly trade their dodgy cars in to avoid the repair bill) that costs R40k to repair the week after the trade who covers that expense?
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Airborne, if we were all like you we'd still be riding around in oxcarts because making entire industries dedicated to supplying fuel and building the metal monsters to consume that fuel is dreadfully risky and needlessly complex and besides ... these people clearly have no appreciation for the majesty of oxcarts.
 
What would be the point of swopping to a car that is in the same bracket as your own?

Then you might as well just keep it, since there's way more risk to swopping.

Short of taking a different type/class. Like going from Hatch to SUV I just don't see the point.
 
SauRoNZA said:
What would be the point of swopping to a car that is in the same bracket as your own?

Then you might as well just keep it, since there's way more risk to swopping.

Short of taking a different type/class. Like going from Hatch to SUV I just don't see the point.
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Let's focus on the positives for a minute ... the negatives (e.g. new risk) can be addressed separately simply by asking "What can we do to minimise the risk for buyers under this scheme?" Also on that point, it's not like this is a higher risk than usual ... people buy cars from pre-owned dealerships all the time with no idea exactly what they're buying.

If the question is 'Why would people want to do this?' don't you think that with as many car options in the motor industry as there are, that any car buyer is always left with a "What if?" question after making a final selection from 10 or more options? This gives them an easier way to experience that, without requiring them to recommit themselves to a longer repayment term than their current loan (to pay for a more expensive car) or without facing the disappointment of definitely trading down (which is definitely never better).

For example, a BMW 3 Series driver who would like something a little more luxurious, so decides to see what all those Mercedes-Benz C-Class drivers are going on about. Or the Mercedes-Benz C-Class drivers who want something a little more sporty.

Or Peugeot 208 drivers who want to experience the Toyota Yaris; or Ford Kuga drivers who'd like a go in a Hyundai Tucson; or Kia Picanto drivers who'd like a go in a Volkswagen Up! There are endless combinations that I think people would be interested in exploring on a like-for-like basis.
 
The overheads of running a car dealer are very high.
Premises and decent protection for the vehicles is a huge factor especially in hail areas.
Pd's, roadworthy and insurance are also costly as well as sales people.
It is already happening but not on a mass scale as you described.
 
That's true Hemi300C, the costs of running a car dealership in its current form is very high. So maybe what we need is somebody to disrupt the industry a little bit, Uber-style.

For example, if we view a 'dealership' as nothing more than a meeting place between vehicle owners, then that could be moved entirely online (and voila - no expensive dealership rental or maintenance fees to subsidize). The financing will be handled as a private sale (and Wesbank etc already offer that option), so the 'hard' part is just around the admin of ensuring that vehicle maintenance checks are validated and the necessary paperwork is completed correctly ... neither of those things are impossible.

Heck, go one step further and treat vehicle financing as a crowd-sourced pool of money along the lines of medical aid schemes, and I could see a scenario where all loan repayments get repaid into the central collective (like medical aid premiums) and the cars remain the property of the central collective until the end of the payment term is reached (it makes the exchange paperwork easier right?). In this case it all revolves around carefully managing personal risk and adequate insurance (which the traditional banks insist on anyway) and you're halfway there.
 
Something similar but different. Cadillac in the US has new leasing program. Think it's a lease anyways.

$1500pm and over a year you can change vechiles 18 times. Nice if you maybe planning big trip and want a big car. In a sporty mood? Then go for more powerful vechile.

Well heard this from an well known YouTuber. So could be wrong.

Problem? Not owning a vechile. Positive side, you don't have to worry about mileage, maintenance and depreciation.

Think in countries like US might be good business model. Not sure in RSA.
 
Something like this..?

So when I heard that there was a venture-backed start-up that sells used cars, I knew I’d found my oasis.

The company was Beepi, a three-year-old Bay Area start-up co-founded by Alejandro Resnik and Owen Savir, two MBAs (MIT and Stanford, respectively) who decided to try to simplify the process of buying a used car online. Beepi has raised nearly $70 million, some of which came from early Uber investor Shervin Pishevar’s Sherpa Ventures, and says it’s “committed to fixing the largest broken market in the world.” Pishevar has made the Uber connection explicit: “Much like Uber revolutionized personal transportation, Beepi is revolutionizing the way we think about buying and selling cars.”

Here’s how Beepi works, more or less: it’s a “peer-to-peer marketplace” where buyers and sellers of used cars can find each other. If you want to sell your car, Beepi sends someone out to inspect it, take photos, and — if it isn’t too old, and if it doesn’t have too many miles on it, and if it’s the right brand, and if it passes a rigorous inspection — list it on the site. (They’re very picky about which cars they agree to broker—”Beepi cherry-picks newer cars in good shape,” the San Francisco Chronicle wrote last year.) A buyer can then come along, look at the photos, read the inspection report, and lay claim to the car. When a sale is made, Beepi picks up the car from the seller, gives it a final touch-up, and delivers it to the buyer’s home or office wrapped in a large bow, like the ones you see in Mercedes commercials. Beepi takes 9 percent of the sale price, and gives the buyer a 10-day trial period in which to tool around and test the car out. (There are no test drives before you buy, and no haggling — the price on the site is what you pay.) If you hate the car, you return it and get your money back. And if you like it, it’s yours. Beepi takes care of the DMV paperwork, gets your license plates mailed to you, helps you finance the car through one of its banking partners, and gives you a three-month guarantee on top of whatever’s left of the manufacturer’s warranty.
https://www.google.co.za/amp/fusion...e-myself-for-it/amp/?client=ms-android-xiaomi
 
HApyM3al said:
Something similar but different. Cadillac in the US has new leasing program. Think it's a lease anyways.

$1500pm and over a year you can change vechiles 18 times. Nice if you maybe planning big trip and want a big car. In a sporty mood? Then go for more powerful vechile.

Well heard this from an well known YouTuber. So could be wrong.

Problem? Not owning a vechile. Positive side, you don't have to worry about mileage, maintenance and depreciation.

Think in countries like US might be good business model. Not sure in RSA.
Click to expand...

Hey, companies like Avis in South Africa already offer short-term vehicle leasing ... the only snag is that an entry-level hatchback costs around R6 000/month on that scheme, so it's not quite affordable to anybody except international business executives who don't want to buy a car to get around for a year.

Again, in a scheme like that Avis is taking a major profit off the top and using a lot of money to cover their fixed assets like branches all over the place. For this scheme to work, overheads would have to be kept as low as possible (so that most of the value remains in the cars being swopped).
 
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