Would really like to find out why they're shutting down. I ran a virtual car dealership for a while and then started a similar site to carwoo, before carwoo. It was absolutely crazy. Six months into it, both my cofounder and I decided it was best to shut it down (amid concerns that his employer might just end up getting all or a significant chunk of our work).
The auto industry is a very weird one. Entrenched in their own way, and I learned that it's a zero sum type game where the one willing to stoop the lowest will win. Going to a few "dealer workshops" I learned psychological tactics to make the customer feel like crap to get them to pay you more money and sign contracts that they would inevitably regret later. Eventually I realized that in the back it's really a financing industry (at least for new cars) and for used cars it's a zero sum, get the most you can scenario or bloodsucking buy here pay here deals.
After a significant amount of time and money, I was humbled at how much of an uphill battle it was to try to innovate in the industry. Have been watching CarWoo & TrueCar with a lot of interest (I'm a fan) since I can feel what they're up against. I'd like to know why CarWoo feels it's time to shut it down. Tesla has, IMHO, disrupted the new car market to some degree and the industry is dire need of change. Here's to hoping the folks at CarWoo go on to bigger and better things!
I used CarWoo a couple years ago to purchase my current car. Before I was introduced to CarWoo, I did my own "no-haggle" negotiating by contacting various dealers via email.
I think I contacted about 3 or 4 dealers, all of them local (within 30 miles). I ended up with one that was my best price.
Then I found CarWoo, and thought I would try my luck with them. They did a similar search, and contacted 5 dealers, two or three of which were the same ones I contacted.
Of the others, they were further away than what I was willing to deal with initially, but after seeing one offer a fairly significant savings over the other (about $750), I decided to take that offer to one of the local dealers.
They matched it, and I walked away with about $700 savings (after the CarWoo fee) vs. my initial offers. So in the end, I was definitely glad I went with CarWoo.
If I had to do it again without CarWoo (and I would now, apparently), I learned that I should open up my searches to not-so-local dealers just to get the best offer, then have a more conveniently located dealer match it. That is, unless you want to reward the best-offer dealer with your business, and it's not too much of a hassle.
But I was still able to get roughly the same experience on my own, just dealing with the dealers via email.
This is totally right - that page is A/B tested to high heaven and is targeted at the mainstream car buyer (aka "typically less internet-savvy") who seem to respond best to that kind of layout.
Trust me, they tried a bunch of different Web 2.0-ish layouts and they all lose to these kinds of generic-looking pages. Sad but true.
I had assumed they typo'd their link and I had clicked through to a squatter, and closed the tab. Only after seeing your comment did I realise it was correct and go back and look.
Its quite odd, and fascinating, because it has the info you'd want to see, give it a second or two, and it does look purposely designed. But, yes, it looks like a parked domain page. Or at the very least, hints at one.
I guess its one of those instances where no one sort of blinked and saw it how we are seeing it... if you know what I mean. Same sort of thing that happens when a song writer writes a song they genuinely thought was original, only to find out they has dragged up something from their subconscious that they heard before. I bet if at some point someone said, hey, that looks like a parked domain page the designers would have immediately seen it too.
I'm super confused by this (you're one of a few people to say it), because that page doesn't look spammy to me at all. A little corporate, maybe. The list of car links on the front page is workable as a UX.
Oh wow, I wonder when and why they started using this design? If I saw this without already knowing about TrueCar I would have immediately closed the tab.
Yeah, it's mostly the top banner that's the problem. With the large stock image that may or may not be about buying a car and the set of links that are sort of relevant to what you want. Scrolling further, the content looks more legitimate. Had I not just read that article, I wouldn't have gone beyond the top banner.
This is really a shame. I used them to buy my car a year ago and the process was fantastic. I ended up getting about $5k below the sticker price by combining the five or so offers I got from CarWoo with information from TrueCar and playing the best two dealerships against each other. To top it off I got them to give me 0% interest over a three year payment.
Hopefully something like CarWoo will exist the next time I need to buy a car, or the industry changes so drastically that we don't need to worry about haggling anymore.
As a CarWoo customer, this is really disappointing. I used CarWoo for my first dealership purchase and it was an incredibly pleasant experience. I was able to walk in to the dealership knowing exactly how much I would pay and confident that it was all a matter of signing papers.
I really hoped CarWoo was going to disrupt this industry. Bummer.
That's unfortunate, car sales are really in need of disruption, and it sucks to see a talented motivated group like that go under.
If any of the people from Carwoo are interested in a developer job in the online car sales field (used not new), send me a message. Especially if you are a developer, we are always hiring talented developers.
I assume that their new work with a competing site means that they wouldn't be interested in trying to sell CarWoo? Otherwise it often surprises me that people abandon their efforts without at least trying to sell the codebase/database as a starting point to someone else.
Sorry to hear this. Bought one car a couple of years ago with them and I'd characterize it as saving me time more than saving me money on price, but I was happy since it saved some hassle and legwork. When we went to replace another car last year, the CarWoo team didn't get back to us at all, so it seemed like things were not going well there.
Not to speculate, but it seemed like as I went through the process two years ago was one that might not be able to scale out and provide a consistent experience to large numbers of consumers across the country.
There's still a lot of work to be done to make the experience of car shopping easier, so it's sad to see CarWoo shutting down. Side note: those interested in disrupting the car buying space like CarWoo/TrueCar may want to check out http://www.hackomotive.com/ the $35k hackathon put on by Edmunds.com this February. (Disclaimer: I used to intern for Edmunds.com on the API team, http://developer.edmunds.com/)
I used CarWoo for my first dealership purchase. I was not even considering buying a new car, so I just signed up on CarWoo on a whim. However, I was shocked at how low one of the offers was, only about $1-2K more than I was willing to spend for a used car. (I was also having major problems at the time finding a decent non-shady "newer" used car.)
I ended up buying new rather than used, and with only minimal hassle at the dealership. That said, if I had done a lot of legwork I could have found the deal independently, since it was advertised in the dealership's flier.
Not haggling for cars is IMHO definitely anti-consumer. That's the last bastion of defense a buyer has against a giant information void they are facing. Square 6-12 dealerships against each other in a deathmatch for your money and watch the price drop. Until actual sales prices start being disclosed (not the meaningless invoices or the less than useless MSRP), we will never know the true price of a car. It's a one sided market. The only advantage a buyer has is the ability to make dealers compete.
Well, first, TrueCar doesn't exist: http://www.truecar.com/. Second, what does Costco do for you in terms of getting a better price? In either case I don't believe they deal with pre-owned cars, which is really the best bang for your buck IMHO.
But yes, my main point is that we should not just submit to the will of the car dealers and take their "best price everz" as gospel. Things like CarWoo and TrueCar need to exist, if only to protect those less likely to haggle face to face.
Edit: oh, TrueCar does exist, just looks super spammy.
Costco (supposedly) has pre-negotiated, no haggle pricing. I used them in the past, and the experience was great (except for the trade-in). Also, there are still car brokers that you can hire to do your bidding.
I really don't know much about them beyond my own limited experience as a shopper (about 6 years ago). I came to know of a local broker (southern California) via a referral at about the time I was looking to buy a new car, and decided to try the service. This particular broker charges an up-front, fixed fee (maybe $100? I don't remember), and he shops for the best deal in the region for your specific vehicle configuration.
Even though I hired him, I decided to also see what the local Costco deal was (wasn't completely confident Costco couldn't do better). The pricing the broker negotiated was a shade better than I could get through Costco (maybe $75 less, including the broker fee), but the big plus was that the car was delivered to my door, and the contracts were signed on my kitchen table. I never had to set foot on a dealer lot (minus my own Costco experiment). No "finance guy" circus. It was cleanest car buying experience I have had.
Has CarWoo done used cars? I wasn't aware, yeah, that would be a nice differentiation, but difficult market to corner - so many more variables thrown in the mix (# of owners, clean title, mileage, etc.)
Am I the only one that doesn't mind the car-buying process? All it takes is the fortitude to sit through a litany of maneuvers trying to convince you to agree on a price - when you've got zero obligation to consent. Sure - it takes time, which is a scare commodity for many - but for the amount of money generally being spent, I've got no problem pushing a salesperson to get the price to where I want it.
I have a fond memory of going with my roommate when he was buying a new car. He had a decent amount to give as a down payment. Armed with the knowledge of how much the dealer pays, he basically walked in, said he'd buy a certain car for a certain amount and not more and handed them his down payment check. The salesman took the offer to his manager. He returned with a counter offer. My roommate didn't budge. After three trips to talk to the manager (each time their offer came down), my roommate remained stuck in his price. On the last trip, their offer was just $500 higher than the desired price. Roommate still held his ground. We watched as the two men were discussing the check in hand. The salesman kept pointing at the check. We couldn't hear what they were saying but we knew it had to be along the lines of "He's going to buy a car. Give him the price he wants." The manager would not come down any lower. We walked out... just $500 away from closing the deal. And the best part... he got a call later that evening asking if he'd still be interested in the car at his desired price.
If you have the time and initiative (and can be willing to walk away without a car) you can get a good deal.
On a similar note, here's a technique I've heard described (although I haven't actually tried it).
Go in to a dealership, haggle a bit, and if you don't get the price you want, say "OK, I'm going to go out and do some more shopping... here's my card, give me a call if you change your mind". Apparently just the threat of walking away will sometimes prompt some movement, and if you do walk out, you'll sometimes get a call the next day with a better offer.
I think they key is that it's not a bluff; you actually have to be willing to get up, walk away, and go look at something else.
Knowing the dealer invoice price does not tell you how much the dealer makes on the car. Most of the dealers that my company sells to make their money from bonuses for moving units.
I don't have a URL to give you but I know several sites have this info available. It is not a secret. You just need to locate it. So most people could have it.
I'd gladly pay someone else to do that for me (assuming their commission falls below the cost savings they provide). I have zero tolerance for salespeople and their associated bullshit.
I personally love the car-buying process. I've bought all my cars (both new and used) the exact same way:
* pre-select make, model, color, options, etc (this way I'm comparing apples to apples)
* find various examples meeting my criteria on the market from different dealers/private sellers
* get initial offers from all the dealers
* get financing in-place - either cash or an approved car loan from your bank
* Whichever dealer has the lowest price, call the rest and say "dealer X has beaten your price by $Y. I have cash in-hand and I'm ready to buy today. Can you go lower?"
* Depending on the answer, either cross that dealer off your list or update all the other dealers with the 'new' lowest price.
* Rinse and repeat until nobody goes any lower, then go buy your car.
Dealers hate that method, but it's saved me thousands of dollars with each car purchase regardless of new or used. Ignore all pleas for 'financing', 'what do you want your monthly payment to be', etc. You're going for the absolute lowest price you can wrangle. As far as time investment, outside of figuring out what make/model/options I want and securing financing from my bank (or getting cash), the 'rinse and repeat with the lowest offer' method has never taken me more than a weekend to implement.
Oh yeah, I hate the "what do you want your monthly payment to be" line. I hate being treated like an idiot also hate canned sales line, talk to me like a person not a mark.
I think a lot of people here, myself included, are introverts.
Sitting in front of a salesperson who, if they aren't an extrovert are at the very least required to act like one, for a few hours while they see just how good of a deal they can make for themselves and their boss by talking sounds like a spot of hell.
It's only marginally better than being stuck to someone like that on a plane; at least when buying a car, you can walk out of the dealership.
Im kind of introverted and have no problem. I use another part of my personality, stubbornness. I have a price Im prepared to pay, and am always prepared to walk out if its not acceptable to the dealer. Last car I bought from a dealer was second hand, was advertised for, IIRC, £5k, (Might have been £6k, but I err on the side of caution) I paid £4k. I told them all I had was £4k. I even turned down £4,100 and got up to leave.
I think one problem is that people get wedded to the car before they go to the dealer, are too excited to be totally rational, and get swept along by the salesman. Being introverted might be an advantage.
The problem is that we are negotiating from a position of ignorance. You don't know the lowest price they will sell it to you for, you don't know the lowest price you can get from competitors, and so on. Let's say I decide I will pay $25K for the car, sit there for 3 hours, and get that price. How do I know that if I presented a competing offer I might get it for $24K? I don't, and thus I leave money on the table.
Because when you don't have that info, the dealer performs a simple calculus - how likely are you to walk away after 3 hours of haggling over $1000 that you didn't know was negotiable. The answer is probably pretty small, on average, and thus it is worth it to them to not go rock bottom on the price.
If I can pay a service to get that rock bottom price (where price + service charge < my negotiated price) why would I not want to use it?
I don't like the time it takes to get to their bottom line price. I only buy cars from private parties now. There's usually a little bit of negotiation but it typically takes about 5 minutes to get to an agreement... no mystery departures to a back room to talk to the "manager" etc.
I don't think buying a new car makes any sense anymore. At one time, when cars started to fall apart after 50,000 miles, it may have made more sense. Today, when with routine maintenance almost all new cars will go 200,000 miles or more with few major problems, it isn't a good deal. Let someone else take the depreciation hit.
Well as the article said, try http://www.truecar.com/ I guess. Being in Canada, I was hoping that CarWoo would do well and eventually move up north. The car purchasing experience is terrible, and is very ready for a disruption.
there is the "APA" car buying service in a couple major cities, if you pay them <100$ they'll get some firm quotes for whatever you're looking at. I've never used it personally but I've heard 2nd hand that it makes it easier.
I used truecar (through overstock.com, I don't think overstock uses them anymore though) 2 years ago to buy a sonata. It was a great experience, and quite a lot off sticker.
Zero negotiation, walked in with the paper, that's the price of the car.
I don't think you will get the deal of the century through them, but you'll at least not get screwed. Just don't let the dealership nickel & dime you on protectants & floormats, etc. If they can't honor the exact price, just go somewhere else.
On the flip side of the other comments, I used the TrueCar service about 4 months ago. For the specific trim that I wanted (standard trim, not crazy options), several dealership websites had prices on them that were several thousand dollars lower than the TrueCar price, and that was before any negotiations happened at all. So I would use the TrueCar service again for doing research, but I am not confident of their ability to deliver a good "no haggle" price.
I bought a car a couple months ago, and as soon as the sales manager saw a TrueCar page open on my phone, the negotiation ended and I paid the price on the phone. Pretty amazing how easy it was.
I've used carbargains in the past and it worked very well. The service is almost identical to CarWoo's but they have been around longer.
http://www.checkbook.org/auto/carbarg.cfm
Things like this have been around from at least the late '90s, I've used them twice, in both cases it was my credit union that recommended a company. I'd ask some credit unions.
I had a startup called lowpenny.com that was very similar to CarWoo (before CarWoo) except we charged the auto dealers to use our system instead of charging users which is what CarWoo did.
The process of buying a car needs to be disrupted but the solution is not apparent to me. Would love to know why CarWoo is calling it quits.
they gave an awesome talk about 2.5 years ago at the AngelPad incubator about their story of hustle getting started; they slept under their desks in the office etc. it sounded like they had a real thing going, identifying out of down dealers that specialized in set models. Shame to see it shut down.
I don't but they are an awesome team. I use to go to their Ruby meetups and they are so nice to the developer community. One of the guys showed a demo of how awesome VIM is and was compelling enough that I converted and I never looked back.
I started working at TrueCar last year on the SRE team, after my own startup failed to hit the moon. I'll be working with some former CarWoo employees I believe. TrueCar is good. I'd be very proud if I grew a startup to ~350 employees with $X revenue and it operated this well. The work environment is nice, the hiring bar is high, the product is the best available on the market, growth is essentially uncapped, and the CEO seems to actually know what he's doing.
It most decidedly does not suck that our offices are right on the ocean, with a view of the Pacific.
Disclaimer: I do not speak on behalf of my employer or anyone else.
Ex-CarWoo employee. Really sad to see this, honestly one of the last things I expected to see on HN tonight. I know the founders are an incredible and versatile team. Can't wait to see what they do next :)
Too bad. I used them to buy a car in 2012 and the service seemed to work well, except for a couple dealers that wanted to waste my time with offers that didn't match what I had specifically requested.
TrueCar has a price that they evaluate the car at, and they give you a slip of paper that you can go into any TrueCar dealership and buy that car from them at.
With this method, sometimes the car dealership sells a car for lower than they were hoping with the local market, and sometimes they make a killing off the customer.
CarWoo, on the other hand, asks each dealer individually what they want to sell the car at, and then forwards that price to the user.
You know, I'm not really one that can take pleasure in the misfortunate of others, but good fucking riddance. I was deeply and incredibly wronged by members of the CarWoo team. It is incredibly gratifying to see this news, when I've done so great at keeping them out of my mind. When the court case is finally settled, I'm sure my appalling tale will be something we can all enjoy together.
Hey Tommy and Eric, remember when you told me you'd rather die than sell out? Enjoy your acquihire. Maybe next time you should try listening to customers (not to mention employees). Back to work on my startup. My users need my product ;)
One of the world's most complex engineering challenges, filled with tens of thousands of highly engineered parts and tens of millions of lines of code, with per unit pricing ranging from $10k to $100k+, is a "commodity"?
The term "commodity" typically refers to products that feature little to no differentiation between each other. It means you could largely "throw a dart" to pick one, and you'd be no better or worse off than someone who does meticulous research.
That you say you won't buy another car until yours falls apart already suggests that perhaps you don't actually consider cars to be a commodity. Sure, you won't upgrade in order to get a faster or more luxurious car. But I'd imaging from your statement that reliability is probably important for you. Although you don't state it, if you frequently have family with you in the car, or even if you don't, there's a good chance safety is important as well. Cars from various manufacturers vary greatly in both these respects.
Not to mention that for other people, sportiness, luxuriousness, ruggedness, storage space, and other factors are important as well, and cars vary on those dimensions as well.
If the vehicle market qualifies as a commodity, so are the majority of markets of any sort, to the degree that the concept of a commodity adopts a useless definition.
the same model car across different dealerships is a commodity. that's why carwoo was great, it helps you run a commodity auction to get the best price.
Right. The problem is that most people have no idea which car to get. "Honey, this one has a nicer GPS system, but that one has a moonroof! Oh, but this one has symmetric all wheel drive. I don't know what that is but it sounds impressive. Or wait, this other one has a SH-AWD... and this one has X-Drive. You know what, I'll take the moonroof!"
The sales staff are not competing against other dealerships of the same maker. They are competing against other makes. They are really selling you the brand.
Having said that, I think it's stupid that once you know the exact make and model you still need to deal with the sales staff. At that point, just give me the best price you have. You know what it is, you know what your competitors are doing. Why are we still talking?
Also, I don't know if you've noticed, but the landscape is changing. One of the big changes is that much more of the salesperson's income comes from salary and not commission. This is good. This means less sneaky tactics. Also, lots of dealerships now have an Internet department which will give you a quote online that is likely pretty close to your final offer. It's still worth trying to haggle, but lots of them don't have time for this: they simply give you an offer that's low enough to where you might actually just take it.
This. All dealerships should be converted to car delivery and ordering centers (with one of each model for test driving). The middle man cost should be wiped out, and the business should move to an order > build > x days to deliver approach. Save buyers $3,500 on a $30,000 car, let them further and easier customize, and they will wait for delivery.
Simply put, replace build car > sell car, with sell car > build car.
As it is, car salesmen are nothing more than order takers that generate a large commission and overhead; the customers come to you. They only still exist because of massive regulatory controls that have created a dealership cartel.
Auto makers would become significantly more profitable in this model as well, no more massive piles of inventory or huge mistakes in guessing which models will sell. This ancient, backwards model currently costs GM and Ford billions each year in lost profit, and costs consumers billions in unnecessary middle-man mark-up.
You may not know it, but every single BMW built is ordered to specification. There is not a 'standard' model, and every single car has to be ordered individually. The new BMWs you see sitting in dealer lots are those ordered by the dealership, where the local salespeople pre-emptively order cars in color/trim combinations that they think they can sell. Typically these are optioned up a bit, and thus they can convince a wavering buyer to take one today instead of waiting.
The end result of this system is that inventory is borne by the dealerships, customers can personalize their cars (taken to the extreme with Mini) and the factory is a fascinating place to visit because every single car coming down the line is different to the one in front and the one behind. It is entirely integrated to their JIT systems soma truck full of steering wheels unloads them in the correct build order to match the vehicles progressing down the line already.
I predict that in that world, the buy it today, drive it home tonight makes would capture market share. Honda already does a great job of building just one or two configs (very limited option space, other than color) and sells a lot of cars that way.
In an "Amazon Prime" world, few people want to wait 21 days for their new car is my hunch.
I expect we'll see a mix of both. Dealers will continue to stock the most common configurations, and offer them at a discount. Slightly less common configurations will be stocked at manufacturer regional distribution centers available for delivery in 1 - 2 days. And really rare configurations will have to be custom ordered, with the customer paying full sticker price and waiting much longer. As long as the manufacturer has excess plant capacity in the continental USA and a lean production process it ought to be possible to do custom final assembly and shipping in <2 weeks.
My father sold new cars ~30 years ago and custom orders were actually more common back then. Many dealers and volume manufacturers actively discourage custom orders now, even when customers would be willing to pay more to get exactly what they want. I think this is because of badly aligned incentives and will probably change.
Did rental cars suddenly disappear? After every car accident I was involved in where my car was a total loss, I had to wait 5-10 days for a check from my insurance company to cover the loss. During that time, a rental was provided to me.
Depending on your preference for engaging in negotiation and buying and selling, there is a pretty reasonable model to show you should buy a typical 3 year old used car and then sell it around year 5 or so thus buying a car when it is still reliable has past the fastest part of its depreciation curve and selling it when it's about to fall down the reliability curve and still worth close to what you paid for it.
You save even more by buying at 3-4 years and keeping until 10 years or 150K miles. Cars today are remarkably reliable well past a 5 year mark. You'll have an occassional several hundred dollar repair. That's less than what most people pay every single month for their crazy car habit.
Plus, you only go through the aggravation of buying and dealing with your DMV 1/3 as often this way...
Try that with a Honda and you learn that 3 yr-old Hondas cost the same as new Hondas, because the depreciation is less than the overhead of reselling the car (through a dealership)
The auto industry is a very weird one. Entrenched in their own way, and I learned that it's a zero sum type game where the one willing to stoop the lowest will win. Going to a few "dealer workshops" I learned psychological tactics to make the customer feel like crap to get them to pay you more money and sign contracts that they would inevitably regret later. Eventually I realized that in the back it's really a financing industry (at least for new cars) and for used cars it's a zero sum, get the most you can scenario or bloodsucking buy here pay here deals.
After a significant amount of time and money, I was humbled at how much of an uphill battle it was to try to innovate in the industry. Have been watching CarWoo & TrueCar with a lot of interest (I'm a fan) since I can feel what they're up against. I'd like to know why CarWoo feels it's time to shut it down. Tesla has, IMHO, disrupted the new car market to some degree and the industry is dire need of change. Here's to hoping the folks at CarWoo go on to bigger and better things!