2008 round of automotive retail startups

It’s fall 2008 and there’s a new crop of automotive retail startups featuring …gasp… accurate pricing. Truecar, realcartips and pricehub recently launched. truecar shows a great, and good price for each car with easy to understand graphics for most if not all vehicles for sale in the US. Price hub and realcartips rely on consumer input; the data is scant for some models.

Other recent launches have a social slant. Vlane focuses on finding the right vehicle according to your lifestyle needs. It also features consumer ratings and reviews for community input when you are close to making a decision. The founder plans to eventually monetize it by…Pfff… generating leads. Driverside and repairpal are recent launches focusing on the ownership phase. Both are basically a lead source for service. Repair pal links to dealerships, driverside links you to other service providers.



Last year’s round of automotive startups focused on appealing to women. Askpatty founded by women auto executives certifies dealerships as female friendly. cartango lets women anonymously haggle /tango with dealers in a facebook like site dressed up like snow white. Carsdiva offers a ‘safe’ place to learn about cars. And Carfolks is a weird take on ‘hot or not’ and encourages me to not attempt this on my own. I’ll send in a man.




In 2007, Automotive retail accounted for 20% of all retail in the US. There are over 20,000 dealerships. These figures may be smaller in 2008, but the point is it is a huge market. It’s an incredibly crowded space with a few big players and a lot of small players picking up the scraps. Dealerships are generally loyal making it hard to break into that space and next to impossible to change the sales model. That’s why startups monetize by generating leads. The appearance of more service and repair focused startups is a sign of the times. Less people are buying new cars due to job insecurity and high gas costs. Truecar has the potential to disrupt the automotive retail industry. The timing is right for disruption.

These are anxious times for the automotive industry. Over production, high gas prices, poor product mix, the financial crisis and subsequent credit tightening, all add to slumping sales. The OEMs reported as much as 35% sales drops from last year’s figures. The financial crisis has tightened credit to the point where dealerships can’t make payroll and are being forced to declare bankruptcy turning the last year’s consolidation into an industry retraction.

After lagging behind every other industry in its sales processes, this could be the 'straw that breaks the camel’s back'. Consumers are fed up with the antiquated Orwellian sales processes. Saying they’re ready for a change is an understatement. They’re so ready they gloat over dealership’s demise.

Watch to see which dealerships and or OEMs approach startups to help them step into the 21st century. Envision a shopping cart behind truecar.com's accurate pricing with a ‘deliver to your home’ option and a checklist to help you through the final paperwork.