Vroomo aims to bring to the UK a radical new model similar to what beepi, carvana, Vroom etc have brought to the states. The platform allows sellers to offer a 240 point independently pre-inspected car to buyers without the possible hassle of a used car sale. It aims to eradicate the transaction risks involved as well as the dangers associated with selling to a private individual.
Vroomo offers a minimum 3 months peace of mind warranty cover and History clear (HPI clear) on all its cars. The platform will aim to eradicate the need for countless hours answering calls from classified ads or entertaining strangers, buyers will be able to buy with more confidence as the information asymmetry will be reduced. Buyers will benefit by not having to spend countless amounts of money on numerous pre-inspection tests & visits on vehicles which may not pass the test. We believe that this will allow more clarity in the process as well as much needed convenience.
The peer to peer Economy is a relatively new market but it is having a big impact on society. Consumers now have access to several cost saving mediums and channels in order to increase the level of convenience or to better the service in an industry, just as Vroomo is aiming to.
– Problem –
When buying or selling a car with the aim of "quick cash" or "value", in most cases, sellers are stuck with having to sell to a private consumer which will entail them going through channels such as classified sites. These classified sites however do not provide any security to the buyer or seller nor do they guarantee the value or condition of the vehicle. The level of value gotten through this medium for sellers is minimal which can lead them down the route of "online trade-in websites" offering "quick cash" and considerable "value" in contrast to the classified sites.
Trade-in websites however offer "trade-in prices" (and below) which is typically less than the "private price". For buyers, they may be happy paying the "trade-price" which is lower than the "private price" however, there is normally a reason for this discount. The "trade-price" accounts for the higher associated risk-factor of buying a car that hasn't been checked.
For example a customer will have to carry out pre-inspection checks and Hpi checks on numerous vehicles before they find one they like.They are likely to pay more in the end due to the possibility that the car is a written off vehicle, stolen or is a vehicle sold on finance which is still on British roads available for purchase. As a result of this we believe that a buyer will not only have to carry out provenance checks on prospective vehicles before purchase, we believe that they will also need to carry out pre-purchase inspections on numerous vehicles, before they finalise the transaction, whilst still arranging delivery.
– Solution –
Vroomo is aiming to eliminate the risks involved in this process whilst injecting convenience and value to it. Vroomo will aim to facilitate the sale of a used cars by certifying vehicles from private individuals with a good history and a pre-listing inspection in order to ascertain the true value of the vehicle. Vroomo lists the vehicles at the private price whilst taking care of delivery, paperwork and the entire transaction so buyer pay less and sellers get more.
Substantial accomplishments to date
Vroomo has relationships with industry leading names in a bid to further reduce the information asymmetry in the used car buying process and increase value. Vroomo works with HPI, VVM logistics. DEKRA (who independently inspect over 23 million vehicles annually) and ZUTO (formerly know as carloan4u) and are in talks with the AA.
Vehicle inspections: DEKRA
Vehicle delivery: VVM logistics
pre delivery inspection: VVM logistics
Vehicle loan/ finance: ZUTO (formerly known as carloan4u)
Vehicle provenance check: HPI
Vehicle drive-away insurance: AVIVA(HPI)
Extended warranty: The AA
Breakdown cover: The AA
Vroomo has also successfully developed the software to integrate all parts of the business. Vroomo is FCA regulated and VAT registered.
Vroomo is a platform that will facilitate the sale of used cars. Vroomo's model distinguishes it from any in the market as it does not store stock.This allows Vroomo to continue to offer customers (both sellers and buyers) the private price (the real value of the vehicle). Vroomo is also able to separate itself from the typical dealership by partnering with "independent information providers" who are critical to building trust in the market as well as structurally for Vroomo as it is able to subcontract vehicle inspections to Dekra and likewise with other operational functions of the business. This allows Vroomo to be efficient. Vroomo will only accept vehicles less than 60,000 miles and no older than 5 years.
Vroomo intends to take a 5-10% margin on all vehicles sold through its platform and estimate that the average value of vehicles in this range will have an acquisition cost from the seller at £16,300. Based on a 10% margin on customer acquisition price, Vroomo believes that it will be able to make a 40% minimum contribution margin per vehicle sold, with this including the cost of delivery, warranty, inspection and customer acquisition cost.
Our Mission is to create a global community for used vehicle sale, providing outstanding quality of service and real test drive experiences at real value with the vision to be Europe's biggest peer to peer vehicle platform.
Use of proceeds
Seed investment is required to finance start-up costs which include working capital and marketing. Vroomo plans to continue its early stage growth whilst implementing better cost saving technology.
Start-up costs include:
• CRM implementation to automate the customer experience and to efficiently re-market Vroomo's after-sales products as well as its vehicles.
• Sales, staffing and marketing.
• Fundraising fees.
• Corporate partnerships (Vroomo aims to patner up with leading lead providers in the industry such as review sites which.co.uk and valuation tools such as glass).
97% of users start the car shopping process online and 44 % are willing to buy a vehicle online. We believe that the market is saturated with parties not providing credible information about the cars being sold, thereby allowing pricing inefficiencies to exist.We feel that the only used car buying options, where prices are more in tune with the vehicles value are risk prone.
With 7.4 million used cars sold in the UK's £42.7 billion market in 2014, by far the largest used car market in Europe and the growing trend of buyers and sellers now moving online for greater price transparency, information and convenience. Private owners account for over 80% of used car supply into the market, the potential exists, we believe, is to capture a market whose only options have been to take the risks involved with the private selling or to accept loss in value by trading their vehicle in.
The importance of convenience is also a factor which will shape the Vroomo market place as for private owners, selling used cars isn’t always easy. First they may decide to spend some money fixing up their used cars and promoting them online through classified ads. Then they may spend time actually selling the car, negotiating with multiple potential buyers and completing the transaction. That’s why more and more private sellers are looking for fast and hassle free ways to sell their used cars.
In a recent survey, a quarter of all used car sellers said they would be willing to lower the price of their cars by more than 10% in exchange for more a convenient sales process, paving the way for Vroomos presence in the market. Private sellers of newer used cars value convenience the most, most likely because the opportunity cost of their time is greater, given their higher income.
Vroomo is targeted primarily at 18-35 yr olds. Secondary target audience will be the tourism market by creating partnerships with airports and other peer to peer travel platforms.
Characteristics of target market
We consider the used car market as being relatively stable even during the economic recession. Vroomo offers all this by removing the need to accept the trade price for your car from companies such as webuyanycar. It eradicates the selling process from the customer by taking complete control of the sale. In particular Vroomo provides this by removing the need to answer, reply and entertain callers due to a customers classified car listing.
Vroomo plans to market itself through a viral content approach via local newspapers, blogs and review sites, Vroomo does not plan to acquire leads via online advertising (primarily) but through media content from blogs, review sites and expert sites.
Vroomo solves the three main issues in the used car market that we have picked up; trust, fair pricing and the availability of credible information.
Vroomo plans to gain most of its customers during the initial first 6 months through tele-sales calls to target sellers on classified websites who possess vehicles that fit vroomo’s criteria. Further, we aim to use direct mail and organic poster advertisements at locations where the target market is present. Vroomo also plans to launch via a PR campaign and aim to exploit channels such as radio and niche blogs(e.g tech).
Vroomo plans to focus on a lead acquisition system through a possible framework of finance companies, online valuation tools, leased car companies and through direct partnerships with partners such the existing one with carloan4u (now known as Zuto).
Vroomo will also generate organic traffic from advertising on the RAC's website for free.
Vroomo also plans to manage an extensive social campaign targeting unique words related to the Vroomo approach through software such as hootsuite.
The above will be achieved by working closely with a marketing consultant to provide relevant and consumable content, positive and encouraged engagement that will make a deeper connection to loyal fans, paid media / SEM campaigns plus audience and community building.
We believe Vroomo's proposition to the market is different to our competitors.
Our philosophy is to bring clarity and trust to the market and we will aim to engage more openly with customers than any party in the market has ever done.
Vroomo offers a service that brings value to both buyers and sellers, which we believe is in contrast to any other medium available in the industry and will disrupt the way vehicles are sold in the UK just as Beepi, carvana, Tred etc have done in the United states.
We believe that by being an early entrant to the market, Vroomo will cement itself against competition and continue to portray the philosophies that started this company, trust, clarity and value.