Beepi and Vroom and Carvana - will they make a DENT?

[Chris Cachor]

Mornin' Chris,
Subscriptions aren't for everyone. But, let's recall that not all car shoppers are left-brained and analytical. Actually, it's not a far reach to say that most car shoppers are driven by emotions and whats more FUN than experiencing new cars WITHOUT a long-term commitment!!

I totally agree with that! It just sounds expensive!

In regards to Vroom and the handful of other "disruptive" auto startups. I worked at a co-working space recently, and one of the startups there was a used car buying service. From what I gathered, the founder(s) had backgrounds in investment banking and not the actual car business. I remember overhearing their conversation saying they've been at it for 6 months and sold 1 car. So my feeling there is you get these founders that think they can go into another industry they have little to no experience with and "redefine" or "disrupt" it. All on someone else's dime too. I thought I had a decent understanding of how the world works, but after seeing the investment rounds and who are leading these companies, it just seems like a Web 2.0 Silicon Valley circle jerk all over again. Except this time the numbers are bigger.

Getting back to the subscription model. I'm interested to see what sort of accounting gimmicks this program can enable in terms of sales tax, write-offs, depreciation, as a separate entity of a dealership. Say for FastLane, I imagine they're demo vehicles until they're miled-out and sold as new at a discount?

 

[Michael Pokora]

Another attempt to take on non-traditional ownership
https://www.fair.com/

I agree that there is a great deal of merit to the subscription service model. I think the financials can easily be worked out in favor of the dealerships, just look at the extended terms and interest rates that are already offered and agreed to. A buy-in fee, a contract breakage penalty, roaming surcharge, a return fee...If they take a page from the cable/telecom companies they will be all set. What is the worse that happens you repo the vehicle and keep the deposit only to offer the same vehicle again days later? Many buy-here-pay-here dealerships pretty much run this way now.

 

[Chris Cachor]

So, Fair is a broker then?