Editor's note: An earlier version of this story misstated the limits of the delivery area for Beepi Inc. In addition to Montana, the online used-car marketer doesn't deliver in North Dakota, Alaska or Hawaii.
NEW YORK -- Beepi Inc., an online used-vehicle marketplace that competes with dealerships and private sales, is looking to expand into older used cars.
The Mountain View, Calif., company is adding a new service to buy older, higher-mileage cars that don't meet its requirements to be listed on its website, beepi.com.
The new service, called Beepi Blue, will buy those cars from private individuals and sell them at wholesale auctions, said Beepi CEO and co-founder Ale (AH-lay) Resnik. "Beepi Blue is for cars that didn't qualify or didn't pass our 240-point inspection," he told Automotive News here. Beepi says as many as 3,000 cars per month don't pass inspection.
On its website, Beepi acts as a go-between for private sellers and buyers for newer, higher-quality used cars that don't require as much reconditioning. "The average car at Beepi is 2 years old. It's been through the steepest part of the depreciation curve," said Resnik, 34.
Here's how it works today.
Sellers fill out information about their vehicle online and are given a possible price range. Then, Beepi sends a representative to the seller's home or office to inspect and appraise the car and to quote the seller a firm price. Provided the vehicle passes the inspection, Beepi lists it online. The seller keeps the car until it has a buyer. At that time, Beepi pays the seller and takes the car. Beepi lightly reconditions the car before delivery.
"We call it, "Guaranteed two times.' The first guarantee is you will get a price better than any other. The second guarantee is your car will sell at Beepi within 30 days, or we will buy it from you," Resnik said.
Buyers don't get to test drive their purchase until after the fact, but Beepi has a 10-day, money-back guarantee.
Beepi Blue will take vehicles that don't meet the company's retail-sale guidelines. Information provided online may show that the vehicle is too old or has too many miles, for example, or a vehicle history report may show serious damage. Alternatively, the inspection may uncover other problems.
In those cases, rather than lose the business entirely, Beepi will make those owners an offer to buy the car. Beepi then sells it to an auction, without ever listing it for retail sale.
Two-year-old Beepi does business in nine states and 16 cities, mostly in the West but also including Miami, New York and Washington, D.C.
In its first year, Beepi was available exclusively in San Francisco and Los Angeles, Resnik said. For an extra fee, the buyer also can have Beepi deliver to any state except North Dakota, Montana, Hawaii or Alaska.
"In our first 27 months of operation, it's grown really fast," Resnik said. He refused to share volume numbers except to say the company has facilitated the sale of "thousands" of cars. Resnik said revenues in the second quarter were more than double those of a year ago.
Beepi also offers financing, via partnerships with banks and credit unions. Ally Financial also offers used-car leases for Beepi customers, he said.
Resnik, originally from Argentina, decided to start Beepi and disrupt the used-car industry because a dealer refused to refund his money for a used Jeep that caught fire in 2013 shortly after he bought it, back when he was working on his MBA at the Massachusetts Institute of Technology.
"I got really mad, and I sued the dealer through the attorney general of Massachusetts, and eventually, I got a settlement," he said. "I got very well-versed in lemon laws that are supposed to protect consumers but really don't."