Carlypso (YC S14) could change everything about how we buy and sell used cars

Except your rates go up, and they may give you less than you could have sold it for.

Agree that its not a showstopper if you're vigilant, so it's good that they're thinking about it from the outset.

[1] http://techcrunch.com/2012/01/01/luxury-car-sharing-service-...

They solve your second concern by not offering test drives to potential buyers.

I am thinking of selling my Honda Element and the prices offered seem pretty low.

Carlypso, come to Illinois. Please.

http://techcrunch.com/2014/06/18/carlypso-could-change-every...

the device is used to track potential buyers while they're on test drives. So it's at least got a GPS and some kind of data functionality. It would be smart if it included OBD-II functionality to see if the test-drive customers are beating on the car, but I don't see any reference to that kind of feature.

If you watch the video, there's also a license-plate lockbox for the key so that you never have to deal with a buyer personally.

Someone could go on Carlypso tomorrow and say they were interested in 'buying' a Subaru STI. Nope, didn't like it. Now they're interested in 'buying' a BMW 3 series. There is a reason you can't walk into a car dealership and start driving cars without someone screening you.

If you think that is an idle concern - I've had joyriders come and try to test drive my vehicles that I have listed on craigslist. It is an infuriating waste of time - and the best reason I've ever found to use a dealer/broker to sell things for you.

Getting the pricing to be reliably accurate was one of the biggest challenges. We tried many of the third party tools only to realize that most were not accurate for our needs.

We do a few things that distinguish our pricing from other sources after realizing no third-party tool worked particularly well. Granted, there are anomalies but here's a few brief guiding principles:

(1) As you pointed out the region matters - a truck in TX is not the same as one in central San Francisco. (2) A listing is not the same as a sale. Dealers often attempt to hold gross margin when a car comes in, then gradually reduce to market rates to sell the car in a period of 30-45 days (e.g. price it high to start and then lower it). We measure how long a given car has been listed on a dealer's site, and often cars listed for a higher price only sell after they are reduced to a lower price. We can do some validation of the final negotiation with DMV records and comparing those values to final listing prices. Fewer and fewer cars have large negotiating margin. (3) You can measure the relative demand and supply of the vehicle market by looking at the flow rate of the vehicle relative to the total local market supply (E.g. measure how many civics sell in a given month relative to how many are available that month). (4) Everyone claims their vehicle is perfect but every vehicle we inspect needs some level of refurbishment so we factored that into our pricing to give "average levels". If a car truly is perfect, we're more than happy to help sell it for more than we predicted, we just prefer to be direct and honest upfront rather than reduce prices after the inspection occurs. (5) The price floor is always set by what someone else would pay in very short notice. This is most easily observable by looking at auction values.

As a side-note, pricing a rare car is virtually impossible --- we can only price cars where there's a significant market and low levels of heterogeneity. The variance on a 1967 Porsche 912 can't be estimated by traditional models since a numbers match car with Fuch's wheels and three gauges is worth more than a restored car with non-numbers match engine, 5 gauges and re-welded floor pans.

- Chris