Have I Got A Deal For You

You are here: Home


Written by Jimmy D. Moody
Monday, 09 February 2009

FOR 20 YEARS ADAM SIMMS, 37, sold used cars the old fashioned way. He'd stockpile an inventory, and when people came in he'd try to sweet talk them into buying what he had sitting outside. Last year it struck him: Why not listen to what customers wanted and then go out and hunt the cars down for them?

The Internet allows him to do just that, and thus was born his Imotors.com, an online used car site backed by the likes of Microsoft cofounder Paul Allen. Existing car Internet sites, such as Carpoint.com and Cars.com, are referral services that introduce customers to traditional dealers or private sellers. Simms wants to sell directly to consumers and exploit the Internet's power to reach a national audience.

Here's how it works: You go online and specify the used car you're seeking, from model year and color to options and mileage (a max of 65,000 miles and five years old). You receive a no haggle price quote guaranteed to be below the Kelley Blue Book price. If you accept, Imotors scours databanks of fleet liquidations, big auctions and even for sale by owner ads to fill orders, usually within three weeks. Imotors will do any repairs. Customers can pull out at any time.

Simms figures he won't have a problem finding a particular car, given a pool of 1.8 million used autos available for sale in any given month. We put him to the test, searching for a white Subaru SVX, a sporty two door that was sold in the U.S. between 1992 and 1997 and is not commonly found on the market. We wanted one from 1996.

For comparison we searched within a 100 mile radius of San Francisco on www.cars.com, a typical referral service with national listings. We found only one SVX within that distance, a 1992 that was 45 miles away. The mileage wasn't given, but at $8,500 it was probably high, and its condition was described only as "nice." The next closest vehicle: 155 miles away.

The obvious problem: Who would buy a used car, sight unseen, from someone hundreds of miles away? And travel there to pick it up?

Then we put in a search with Imotors. We got back a quote for a '96 SVX with 55,000 miles of $18,197, $1,423 less than Blue Book value, to be delivered within five weeks with a three month, 3,000 mile warranty. Imotors then searched nationally and within 48 hours had found several nonwhite '96 SVXs (Subaru didn't make white that year) with 35,000 to 65,000 miles at auctions such as those in Florida and Arizona.

If we had decided to buy one, the price would have been adjusted for variations in age and mileage from the model used in the price quote. Imotors would have shipped the car to its refurbishing center near Sacramento. We would have picked it up at one of Imotors' dozen or so centers on the West Coast.

Simms claims his 20 telephone sales reps are each selling an average of 24 cars a month, compared with the 9 car per salesman average at traditional dealerships. At an average price of $19,000, that means a $9.1 million monthly volume.

Will the masses buy used cars online? Car buyers like to take test drives or slam doors before committing. (Which is why Simms offers a seven day, 700 mile money back guarantee.) Plus, lots of buyers don't have specific cars in mind. And many buyers don't want to wait weeks for delivery.

Simms wants to cut the delay by setting up centers across the country. He did a $300 million deal in January with construction giant Bechtel Corp. to build up to 30 centers in the U.S. and overseas. He's got some cash $73 million put up by investors, including Global Retail Partners and Allen's Vulcan Ventures. It might work, but this business doesn't have the traditional market that, say, Autobytel.com, a big online car site, has and even Autobytel is still in the red.

Last Updated ( Monday, 09 February 2009 )