CarWoo (YC S09) promises car buyers hassle-free quotes, raises $4.2M | Hacker News Reader

CarWoo (YC S09) promises car buyers hassle-free quotes, raises $4.2M

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98 pointswaderoush81 comments

Something I'd like to point out: http://i.imgur.com/gNdLh.png

Make sure you test your fonts on Windows both with and without Cleartype. A few of the trendy new sites are using this font now and it's near unreadable on Windows without Cleartype. The site looks awesome and I'm looking forward to using it (excellent timing in my life). However, the font issue is going to be a big pain for Windows users.

Even with Cleartype (http://i.imgur.com/EQNr5.png), the fonts look bad. Anything that is rounded on the top (2, 0, 9, S, etc.) has an odd bump in the center. While it's more readable (due to the darker rendering that Cleartype is giving it), it's quite jagged.

I'm mostly posting this since I'm guessing someone from CarWoo will be reading this thread. I've always wanted a service like CarWoo and I think you've got something really great.

I've found another thing: when you're selecting a style, you're only allowed one. Rather than making it radio buttons, you've used checkboxes and popped up a JS alert when I select two. It means I have to de-select the original before changing my mind. You could keep the checkbox look while making it behave as radio buttons would.

EDIT: During the process (I haven't paid yet), it didn't ask me what options I wanted with the car. That means that if I get a quote for the car, it isn't the quote I want.

The other problem I see is that I can't compare the deal I'd get on a Camry and an Accord. Often times, people make decisions between two models based on price rather than deciding between the two models and then looking for the best price on that model. I was told by the chat help on your site that I'd have to purchase two plans if I wanted to get a quote on two different cars. During my car buying experience, I'm likely to narrow it down to 2 or 3 cars in the same class and then want to see the price difference. If a dealership is giving me $1,000 less on a Camry (which might have started out with the same MSRP), that might sway me away from the Accord.

Thanks for pointing out these issues. We're working on fixing them.

So, some insight into the checkbox vs. radio button thing:

We started with checkboxes because it used to be the case that a buyer could select up to 3 trims. This gave them more flexibility, but ultimately created a burden for dealers. From the dealers' perspective, they had trouble figuring out which trim to make an offer on (and, sadly, they are generally too lazy to make offers on multiple trims).

So we ran an A/B test to see if limiting the buyer's choices to 1 trim had any effect on conversions. Turns out it actually increased conversions a little bit (more on that later, but in essence: eliminating choice is good).

Then, we just forgot to switch it over to radio buttons now that the test is over, but the new changes will be deployed to production shortly.

Anyways, thanks for your feedback!

When I was buying a car recently, I wasn't at all sure about the differences between the different trims when just looking on Edmunds, and the dealers catalogs aren't much better. Do you have it in the pipeline to present detailed descriptions of each trims offering?

Yup. Right now, we're focusing on buyers who know exactly what they want.

Moving forward, we're going to move further up the funnel and get into the research step too.

There are already sites that do research fairly well, but no one handles the actual transaction (except for CarWoo!) so that's where we can add the most value and that's where we're focused.

It's true, you would have to buy 2 plans to shop for 2 cars. The reason we do that is because there's a fixed cost per car on the back-end for us in terms of contacting dealers and getting offers, so letting users shop as many cars as they want isn't feasible unless we charged a lot more. However, most people don't want to shop 2 cars at the same time so we decided to cater to what the majority of our users want.

We'll be rolling out multiple deals/user in the near future, but for now, if you actually are shopping an Accord and a Camry, I can give you a coupon for a discount on the second deal if you're interested.

It's important that CarWoo be mindful of how their fonts render on different systems, but I also think you should send that comment to Microsoft. It's 2010 — there's no excuse for font rendering like that anymore. Time to fix it.

This is really bad advice, IMO. A radio button implies "choose 1 of" while a checkbox implies "select 1 or more". That's a basic web design (and W3C) principle. I would suggest changing the list of trims to radio buttons, or at a minimum changing the span.checkbox background image to look like a radio button if you have other reasons for hiding the actual input fields.

Just FYI, this has been fixed, we're now using radio buttons. You can see my response below as to why we were using checkboxes in the first place.

I'm actually in the market for a new car and this sounds promising.

So I'm actually looking at this as a new consumer and a few notes on the experience (my first obviously)

1. The site is too wide. Annoyingly so, I don't know why I'm so put off by this but I literally have to widen my browser to get it to render correctly and it makes me uncomfortable. Considering how much empty space there is I'm not sure why its got to be over 1200px wide with no margins. YMMV I'm just one data point

2. I'm not comfortable with, what appears, to be the requirement to signup right away. I'm not clear on the process here, but I'd like to browse a bit without having to log in to anything. I also don't like not being to signup using facebook without having to give an email. Here's the thing car buying is one of those things where I hate giving out my contact info they tend to just be spam beacons. Let me do something without having to register my email address. I'd prefer to choose my car and options etc.

I'd honestly prefer to get to the point in the process where the only thing left to do is for me to pay you and you send my info to the dealers before I need to sign up.

3. Creating a log in without a password verification seems like a bad idea. What if I screw this up (or worse screw this and my email up)? By the way there's an issue with your reset password page. http://public.adifferentengine.com/files/badreset.png

4. I tried the car I want and I'm missing a bunch of option choices. I've got a pretty exact idea of the car that I want and there's a bunch of options that I can't choose. In my case I have a very exact idea of the car I want and I just want the lowest price from the dealers. Having to deal with negotiations based on price with varying options is a hassle I don't want to really deal with.

Anyway I'm not buying today but I'll probably give it a try "For Real" in the near future seems like something I'd want.

Mike, thanks for your feedback. I'll respond to each of your points:

1. We optimized for the majority of our users' browser resolutions. Your not the first to give us this feedback, though, and if we get enough of it we'll switch to a narrower layout.

2. Understandable. There are 3 issues here:

a) Trying CarWoo! before signing up: unfortunately, there just isn't a way to use the product without diving right in and getting in touch with dealers. When that happens we need a way to notify the user of what's happening within the app. Once we build features that have to do with research we won't require a signup to use them.

b) Spam: you are exactly right, giving your email address to a dealer is asking for spam. It's a big part of the reason we built CarWoo! The difference is that we actually prevent you from getting spammed because we serve as a proxy, relaying all dealers' emails to your email address and vice-versa. To do that, though, we need your email :)

We are very much anti-spam. The only emails you'll get from us have to do with your use of the application.

c) Changing the signup funnel to have contact info at the end. We split-tested different funnel variations (signup first, signup last, etc.) and what we've got right now simply converted best to paying customers. At the end of the day, that's what we have to make our decisions on, even though it might rub some people the wrong way.

3. Thanks for pointing out that issue, we'll fix it ASAP. Again, we split-tested it with email-verification and password-verification and what we've got now converts statistically significantly better (without a big increase in support requests for lost passwords or emails)

4. This is actually a big can of worms, but I'll try to explain briefly: manufacturers (Honda, Ford, GM, etc.) only build cars certain ways. Even if you can "configure" it on Edmunds or Cars.com a certain way, that doesn't mean that you can actually buy a car with those options.

Letting users check off options is actually a nightmare for the buyer and for dealers because it sets buyers' expectations too high at the start and makes it seem like dealers are uncooperative.

To further complicate things, manufacturers refuse to release build information and there's no easy way to get it from dealers. So were left with being able to determine builds on an ad-hoc basis.

Finally, not all dealers get the same builds, and some add what are called "Dealer-Installed Options." At the end of the day, even if you knew exactly what you wanted, there's no way to guarantee anyone has it or that everyone has it. The only way to find out is to ask. And CarWoo! makes asking incredibly easy and noncommital, plus you won't get spammed just for asking (and if you don't buy a car because it's not exactly what you wanted, then we always give you your money back).

At the end of the day, we decided to architect our solution so it works really well most of the time (a-la Pareto Principle). There will always be cases where it doesn't, but we're not trying to please everybody.

To wrap it all up, a lot of the things we've done don't work well for people who aren't ready to buy right now. But like I've mentioned elsewhere, we're not in the business (yet) of helping people figure out what kind of car to buy, we're in the business of making it really easy for them to negotiate with dealers.

Hope that helps. Feel free to email me at michael@carwoo.com if you've got further questions and let me know if you'd like a coupon when you do try CarWoo!

Are you sure you're going to keep that ! at the end of CarWoo? Like Yahoo!?

I bought my first car a couple months ago through CarWoo (I found them through HN) and had a pleasant experience compared to what I went through when stopping by dealers in person, but then again, I'm not an aggressive haggler.

Carwoo was price testing at the time. (I saw $39-$59) I paid the $59 and think it was completely worth it, although this is my opinion after trying the service.

Something else that I found surprising was that I got better support through Twitter than through email.

If you don't mind me asking - what did you end up paying compared to the sticker price? The problem with most services like Carwoo is that you can get a much better deal yourself with a little bit of knowledge and some time.

I can't for the life of me remember which options I got. I didn't know much about cars before this, so I didn't even realize that cars came with options.

This is pretty much the car that I bought: http://www.marinadelreytoyota.com/vehicle/specs/toyota/corol...

One of the first dealers I visited in person told me the sticker price of $18,050, and I didn't think much of it since I thought they would easily lower it. At the desk, they quoted the sticker price and wouldn't budge until we walked out and were already halfway down the driveway, then whispered a price of $16,800.

Second in-person dealer, my dad called a friend and asked for a dealer recommendation. He went up to him and talked about all their mutual contacts and asked for his best price and was quoted $16,400 and that he couldn't go lower than that.

I sent a counter offer to one of my Carwoo dealers and got my car for $16,200. I also got a $1,000 college graduate rebate (which I would've gotten at other dealers too).

To skip all that running around and haggling, I would feel more at ease sitting at my computer and clicking "Accept deal" and paying the $49 for the service.

Edit: Before using Carwoo, I tried to get a quote from a local dealer through their website. I guess I skipped some fine print because they ended up leaving me voicemails and emails for the next 2 months.

I wouldn't necessarily call it a "problem" with a our service. Some people prefer to do things on their own, some prefer the convenience that CarWoo! provides.

At the end of the day, if you try to do it yourself, you'll spend a lot more time (especially if you drive to a few dealerships).

Plus, if you do it yourself, you'd have to give your email address and/or phone number to a bunch of car dealers. And, don't take my word for it, take stjarnljuset's in the post above this, if you give a dealer your contact info, you'll be getting spammed for quite a while.

>Something else that I found surprising was that I got better support through Twitter than through email.

Nearly everyone gives better support through twitter than email, simply because email is a private medium. If you ask a question on twitter, not only do they have the same incentive to solve your problem as you do through email, they have the additional incentive to not look bad in front of the rest of the freaking world.

I guess then I know how to contact you if I need something regarding prgmr :P

Maybe this will save people some googling.

7.6 million passenger cars sold in 2006 in the US * ~$30 per buyer = $228 million is pretty much the hard limit for yearly revenue at least without going international. Maybe 10% of all sales is an ambitious yet attainable goal so $23m in revenues?

I think it's a winner, but it could easily pull a digg and take too much vc for its own good.

Their Plus pricing plan costs $79 usually, and the sign up page says 90% of the people choose that, which makes sense intuitively (With more dealers competing, chances are, I'll save more than $40 by going with the plus plan).

So at the very least the revenue estimate doubles but you think $23M in revenues is something to sneeze at?

By comparison, Digg's revenue for 2008 was $8.5M. There was another thread on HN today about how Digg scaled up too fast which is probably true because they lost > $5M in 2008. In the end, the bottom line number is what matters.

http://techcrunch.com/2008/12/20/diggs-sorry-revenue-stream-...

I think his point was that they may be taking too much VC. They have already taken $6 million.

Fair enough. That could be a risk.

I wouldn't worry about that. If they control 10% (or even 5%) of all car purchases in the US, they're going to be well positioned to do a ton of other interesting things.

Precisely. There are a lot of other possible revenue streams, even if we never charge the dealers (which we'd like to avoid because we are a consumer advocate and don't want to be beholden to the dealers).

This seems to fall victim to the classic "if we only get X tiny % of some big market worth Y, then..." fallacy. The real question is how strong their product offering is and what a realistic estimate of their popularity would be.

Sort of. X% of the market is a terrible growth strategy, but it's a decent gut-check to size a market. The previous poster was complaining that this gut-check wasn't big enough. The problem with that is thinking that a company is stuck with today's business model forever. If that were true, Google would still be selling search appliances.

Won't the dealers still be sleazy when you go to pick up the car and pay the agreed price? Won't they tack on extra things, say the price they quoted doesn't include a warranty, or who knows what other tricks?

Also how does CarWoo handle trade-ins? What about financing?

I really hope this work out though. I swore off buying new cars after my last terrible experience at a dealer. Hopefully something like this might let me buy a new car yet.

We've built a reputation system, which, in short, helps ward off a lot of bad dealer behavior. I can get into more details if anyone's interested.

If you have a trade-in, you can describe it and the dealers will include a quote for that in addition to the quote for the new car.

They can also give you an estimate for financing, although for the most part that is still handled at the dealership. Financing is one of those last-mile problems that we haven't totally solved yet, but we're working on it.

I really like the looks of your product so far. If you offered the option of financing the purchase for the consumer, that would be a huge value proposition. I imagine the dealerships would not like this, but I urge you to consider it for the future.

According to the "How it Works" page, "we know which dealers are the friendliest, which ones will give you the best prices, and which ones to avoid completely." Presumably they wouldn't send you any quotes from known bad dealers, but obviously the question is whether or not they can execute on that promise.

True, the dealer can still haggle you on trade-ins and financing, but removing the "price of new car" variable simplifies that negotiation quite a bit. One of the current tactics that works very well for dealerships is trying to throw as many variables at you as possible (Google the "four square method"). Plus you can always sell your car to someone else instead of the dealership, and/or get a loan from your own bank.

Given that dealers are mostly tied to physical locations I wouldn't imagine it would be a big problem. Sure they could create more accounts when they get bad feedback but in the end people still have to pickup the car from the same physical location.

How to buy a car:

1) Do research, determine a reasonable price for the car.

The cost structure of car dealerships is complicated with incentives, to the buyer and the dealership from the manufacturer (holdbacks, etc.) There are spreadsheets and data available on the internet to compute fair pricing.

2) Call all the dealerships that you are willing to travel to. Tell them your price, ask if they will sell the car to you for that price, "out the door, including taxes and registration"

Many of them will say "we don't negotiate over the phone". That is fine, don't buy from them, they want you to come in and give you a hard sale.

Eventually you will find one or more that are willing to sell to you.

3) If you need financing, get it from a credit union beforehand, unless the dealership has a special deal going. One less thing to negotiate at the dealership.

4) The basic takeaway is: Don't go to the dealership to buy a car without an agreed price. Test drives in the days beforehand are fine. If you arrive, and they don't want to honor the price, just leave. There are more dealerships, dishonest people don't deserve your money.

Was signing up and realized I have a question on the very last page (choose a plan). Now every time I try going to the FAQ, it redirects me back to the sign up page. It's very irritating.

FWIW my question is: Can I switch from "need financing" to "don't need financing" after signing up? It seems like I can't even go to the previous page and switch it while I am signing up.

If not, can you add an option there which lets me get pricing for both options, because whether or not I get a loan depends on what rates they offer me.

Yes, you can switch preferences once you finish signing up.

The "stuck-in-the-signup-loop" thing is also something we're working on. It's a balance between increasing conversions and pissing some people off. We're probably going to switch to a version where you aren't stuck, though, but today we just went with the MVP :)

Fair enough, but IMHO not letting me access the FAQ (which I can access by logging out anyway) won't help you increase conversions. Having a back button to go to the preferences also wouldn't hurt, but that can be debated. At the very least, stating prominently on the sign up page that users will be able to switch preferences after signing up seems like a no brainer.

I respect the idea of shipping the MVP though, and Carwoo looks like a very useful service!

I don't see why they are charging the customer, instead of the dealer. It's like I'm paying you to get the privilege to shell out 30 grand.

At the very least, I should get a list of all dealers currently in the program.

The problem I see, is that if you only sell 250 cars per month, then the dealers have no actual need to compete. 250 cars / 1 car per model(25 brands * ~10 cars), in the entire country. Most dealers won't compete for the privilege to sell the one Honda Civic in the entire country.

+ it seems like all they do is email the dealers saying "So and so is looking to buy this car...what's your best price?" And then follow it up with "So and so got the best offer of X...can you beat it?". With email, I can do the same thing....and I can email all 20 dealers in my area with the car, instead of having you limit my choice.

+ there is no indication of what kind of deal someone gets. You need to show your actual results "Linda R from X, bought a 2010 Honda Civic EX for $14,950". For all I know the best deal I get on the service is $100 less than MSRP.

Charging the buyer gets the incentives right. The whole story is that "CarWoo is working for you, not the dealer like those lead generation sites".

charging me up front, tells me the story that they already got their cut and that they have no actual incentive to give me a good service.

http://carwoo.com/guarantee

We give people their money back for any reason if they aren't happy.

that is one of the best "happiness guarantee" pages I've ever seen :)

good job! I love the idea.

We have given people their money back for losing their down payment in a poker game.

Charging buyers means we are 100% committed to the consumer and not beholden to dealers unlike every site on the internet.

Really? That's what paying money for something signals to you?

My guess is that happy customers will tell their friends and use the service again when they buy another car. Those are both powerful incentives.

What incentive do they have to do a good job for you when they're just turning your contact information over for lead generation money?

it does when the service relies on the human element to get completed.

You pay up front for websites/apps, because you get access/product right away.

But any interaction where the human is involved(plumbers, tree service, mechanics, body shops etc)...you pay only after the job is finished.

The reason is that when you pay someone they have no real incentive to give you their best service...since they already got paid. And yes word of mouth might work, but I'm not seeing awesome deals on there. The venture beat article shows they got someone an Accord for $32K. Carsdirect has that same top of the line trim for $28K.

And carsdirect has the same incentive, give good service to get word of mouth so they can get more leads....the only difference is that you get to save a bunch of money too.

Since we are focusing on incentives, if they charge the dealer - they are working for the dealer. Who do you think they will be motivated to help better? If the dealer pays them, they have to help the dealer maximize his profit and the customer loses.

Carsdirect is a broker of used cars. They solve the problem of letting sellers find buyers and vice versa, not the same as making the process of buying a new car painless and shorter.

Most importantly though, their offer to refund your money for any reason makes this entire argument pointless. If they didn't think they could make you happier by saving you at least more than their fee, do you think they would make that promise?

they charge the dealer by providing sales, so yes they are working for the dealer...but the only way they can provide sales is by getting the customer a good price. So they are working for the customer.

and carsidrect is for new cars, I think you are confusing them with cars.com

actually your point that they have a refund policy led me to go look at that page...and my opinion is now even worse. Apparently that money only gets you one car. So you can't cross shop the best deal on a Civic and a Corolla to see which is the best option, without paying even more money.

I think you are misunderstanding their target customer. They are not targeting people who want to buy a car, but are not sure when or which one. They seem to be intentionally targeting people who are ready to go to the dealer and buy a specific car, but hate bargaining with car salesmen.

I happen to be at that specific point right now and if their service works as described on the many testimonials on the site and one on HN, I think paying $39 for it would be a great deal.

I do think you have a point in that, folks often come down to more than one choice on a model and make their final decision based on price. I think it would make sense for them to have a plan that supports this use case.

Easy.

Carwoo for a Civic. Woops, wasn't happy, refund me.

Carwoo for a Carolla. Compare prices, get Carolla if you want, or get a refund and repeat step 1.

I have used a car buying service (broker) that also charged the buyer up-front. The broker was somebody who I knew indirectly, and had some knowledge of his previous, happy customers. Even so, going into the purchase process, I was still hesitant that maybe I could still get a better deal on my own.

The result was that going through the broker resulted in a very slightly better deal over what I could have received through Costco's buying service. With Costco, though, there is no fee. That's huge, because once I pay money, I feel locked in. That's not a comforting feeling.

What the broker provided that the Costco service did not was searching for the exact vehicle, which 40 miles from my home, and delivering the purchased car to my door. No need to visit a car dealer. Overall, it was a positive experience, but I still prefer not locking myself to the broker by paying an up-front fee. Figure out a way to push the fee to the back-end (only with purchase) and I think you'd improve your chances.

We're going to get a list of all the dealers we're working with up ASAP. We spent the last year building up the dealer network, thanks for pointing out we forgot to show which dealers are participating. One thing to note, is we rarely have a situation where we don't have dealer coverage. Even in areas where we don't have dealers, we have a group of "Dealer Happiness Reps" that reach out and recruit dealers and we get them on as a dealer. There's no charge to dealers so it's very simple for them to signup and participate.

This is a fantastic idea. Considering how hard dealers are fighting for business at the moment, why not let them do all the work? I love it. I'd love to see something like this hit the UK.

Considering how long it normally takes startups in the US to expand outside the country, you are properly better of launching it yourself.

Valid point. Having read all of the feedback, there's plenty of info to create something slightly different for the UK used car market.

There are some people who aren't really getting CarWoo, so I'm gonna try and explain:

CarWoo is sort of a domain-specific CRM. It lets you manage communication with dealers in terms of providing an RFQ interface and in terms of controlling the conversation flow by serving as a middle man.

If you're fine locating and emailing all your regional dealers, accepting the risk of spam, voicemail and general bother for the next couple of months, collecting all responses in a spreadsheet and comparing to various market data on your own... I don't think CarWoo's for you.

CarWoo seems to me to be aimed squarely at the experience of buying a new car. Part of the experience is getting a great price, of course, but if your goal is to shave off every last dollar convenience-be-damned there are plenty of more labor intensive processes available.

This has been a long time coming. Feel free to ask us anything if you've got questions about CarWoo!

Any plans to offer a private party sales portal?

Do the dealers offer carfax/autocheck reports for the cars or do I still need to buy a report separately?

We only do new cars right now, we'll be getting to used in the near future, including private-party in all likelihood.

How about giving an average price that recent buyers have gotten on that car/trim/location?

It's very difficult to give an average price on a car since there is so much variation and there are so many nuances to each car.

What I can say is that, on average, we save buyers over $3000 off the sticker price of the car. The range of savings is $-6101 to $16,205 (for a car that was very difficult to find and one that the dealer clearly wanted to move, respectively).

I can't knowledgeably comment on pricing by location right now, but we'll be releasing some cool data around that in the near future.

$19/month gets me 2-3 dealers competing, and $49/month gets me 3-5 dealers competing. I think, at the very least, the 2 values should not have a chance of being equal. The $19/month agreement gets a better deal even, because 1/2 the time they get to receive their maximum # of dealers (assuming equal probabilities) and the $49/month one gets their max only 1/3 of the time. And even they can receive their minimum which would be the max of the lower level plan! That's annoying.

Changing it to something like: $19/month 2-4 dealers competing, and $49/month 5-7 dealers competing makes more sense.

That's assuming that you can actually get 5-7 dealers to compete :)

There are few things to take into account:

1. We're working with real dealers behind the scenes, calling them if we have to. We don't use automated systems (not because it's impossible, but because it leads to a poor consumer experience). So there's a cost aspect to it.

2. Since dealers can see each others' offers, there's some competitive dynamics at play here too. The nth dealer to join often thinks that s/he has a worse chance of winning the deal because other dealers got there first. The effect varies proportionally (possibly exponentially) with the number of dealers participating. We don't want to promise 5-7 dealers if we can only realistically get 3-5.

3. We split-tested the value propositions for our plans, especially around # of dealers. What we've got now seems to work pretty well in terms of driving people to pick the plan we want them to pick (Plus).

4. We've found that with 3-5 dealers, buyers generally reach the local (in terms of geography) minimum w.r.t to the price of the car. Adding another 2 dealers doesn't get the buyer much and only wastes the dealers' time.

That said, we will continue to monitor this and test it. Thanks for your feedback!

The nth dealer to join often thinks that s/he has a worse chance of winning the deal because other dealers got there first

Maybe you do this, but would it work better if you told them that you wouldn't provide the customer with the offers before some time (day or two?)?

is it only me who feels that this design style - picture on the left, email/passwd sign-up on the right, a slogan with big font - seen everywhere nowdays looks like a first book(s) very young children use to learn reading? I can't transcend that feeling in me and type in my email to sign-up :)

I'm just a data point, but it's something I would NEVER pay money for.

You're not guaranteeing that I get what I want - a car. All I'm getting for shelling out money upfront is some quotes. I can get a million quotes any time, anywhere. What if I won't like the quote after I pay? I would feel robbed.

If this was free, and you'd get a cut from the dealer if I actually buy a car, I'd sign up in a heartbeat.

Unfortunately, you'd also:

- get spammed by those dealers in a heartbeat, for 2-12 months after submitting the lead, even if you end up buying a car!

- have to manage the negotiations over email, with at least 3 dealers if you want to be sure you're getting a good price (clearly possible, but not easy)

- have to compare non-standardized "quotes", some of which are nothing more than a one-liner to the effect of "I'll sell you a 2011 Honda Accord for $22,390" with no mention of options

- convince each dealer that another dealer gave you a better offer

- go through a lot more back-and-forth than is necessary (to give each dealer the same feedback, to get them to lower their prices, etc.)

If you've never used the lead system for buying a car, I encourage you to try it with a fake email address and phone number so you can see how bad it is.

Some sites will sell your information not just to car dealers, but to mortgage companies, insurance companies, etc. It's not a pleasant experience.

At the end of the day, though, some people prefer not to pay for convenience and that's totally fine.

However, if you're hesitant because you think you might not get what you want, I encourage you to check out our 100% Happiness Guarantee:

http://carwoo.com/guarantee

We're very serious about making sure each customer is happy at the end of the day and if they're not, they get their money back. No questions asked. It's only fair.

Based on the comments here, I think Carwoo will take a while to convince users of its utility. But there are people out there for whom this will save time and hassle. A friend of mine, for instance, recently decided on the exact car he wanted and then faxed an offer sheet to various dealers in Northern California. First responder got the deal. And he was able to pay a bit below the price he would have had to haggle for showing up at a single dealership.

As this catches on, I think there will need to be some education regarding the proposition itself as well as how financing might play into the service.

Was it an uphill battle getting dealers?

A system like this cuts into the profits that they'd normally get from naiive customers walking through the door.

How did you pitch them?>

It wasn't really an uphill battle at all.

Due to the way dealers are compensated (i.e. on volume for the most part), their first priority is simply to sell a car (irrespective of how much margin they make). Thus, a highly-qualified CarWoo! buyer on their doorstep is a very attractive prospect.

Further, we don't cut into dealers' margins as much as you'd think. Not all buyers' first priority is price. A lot of the time it's fit (i.e. the car has the right options, color, etc.) and a good relationship with the dealer. Buyers can use CarWoo! to play hardball if they want, but, for example, the vast majority never even use the counter-offer tool.

The pitch to the dealer is pretty simple: "We've got a buyer in your area who's looking for <car description>. She's paid us 50 bucks to help her through the car-buying process so you know that she's highly qualified. She wants to buy a car in the next week. Would you be interested in making her an offer through our website? It's completely free for you to sign up, it's free to make her an offer, and we won't even charge you if you sell her a car!"

How could you say no to that? :)

Why wouldn't you just buy a used car from a person? I'm asking this sincerely. Why do people buy from dealers? You save so much money by buying from individuals than from dealers.

CarWoo! is only for new cars at the moment. We're going to get into used cars soon, and odds are we'll work with private-party transactions as well as dealers if buyers want a Certified Pre-Owned car.

Not sure if this is a bug or intentional, but I created an account, selected a make/model trim/colors and entered 'submit' and was brought to the 'pick a plan' page to continue. However, there's no way for me to start all over. If I go back to carwoo.com I'm immediately redirected to this 'pick a plan' page. I want the 'start over' button instead :)

I don't see how I'm going to pay anyone $79 just so I can get quotes from 5 Car dealerships, without any guarantee that the quotes will be lower than anything I would have gotten myself.

But hey, there are people paying for far apps...

Recommendation: Dump the youtube videos, and host them yourselves, it will look more professional. Offer HTML5 video if the browser supports it. At the very least put an image there so people with flashblock don't just see a black spot

Awesome execution on the new site, customer service and youtube videos, congrats guys!

With many smaller market areas, a lot of the same car manufacturer's dealerships are usually owned by the same larger company throughout the city. Is there someway to ensure there's no colluding going on between them?

Does anyone know how this compares to Cartelligent (http://www.cartelligent.com/), which seems similar but more expensive?

Cartelligent is similar in the sense that it provides a very convenient way to buy a new car. They are a lot more hands-on than CarWoo! (in fact, they are a broker, while CarWoo! is not), so the buyer won't ever actually talk to a dealer and Cartelligent usually will deliver your car to your house for you. However, it costs at least an order of magnitude more than CarWoo! ($500+ vs. $49).

Given that their business model doesn't scale very well, they've never expanded out of California, and only recently (after being around for 10+ years) expanded out of Northern California. CarWoo!, on the other hand, can help buyers anywhere in the US.

Congrats! I know one of the carwoo guys and it's a great idea and a solid team!

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Trying to load video. How'd that get missed.

What was the need/motivation for capital raising?

It goes national today after no-publicity launches earlier this year in California and Florida

How do you launch without publicity?

You don't tell the media about it. Or ask them not to write about it. Launch is a loaded word nowadays. To be very specific, it was a product launch, not a media launch.

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