Editor's note: This article has been corrected to note that CDK Global’s purchase price for RedBumper and NewCarIQ was at least $34.3 million, with additional payments possible.
Bruce Thompson is a serial entrepreneur in the automotive retail tech space. He has launched a number of successful companies — and at least one prominent failure that could have dogged future ventures.
It hasn't, Thompson said. Rather, Thompson credits the experience gleaned from Lanelogic, which folded in 2008, for laying the ground for his new company, CarOffer.
With Lanelogic, "we learned," Thompson said, adding that he's had the same technology staff for 20 years. "We would never have been able to launch [CarOffer] as quickly as we did had we not had that experience."
CarOffer, which launched in August, is an exchange of accident-free used vehicles. Dealerships get automated offers on their inventory — which is integrated into a trading platform through CarOffer's software — 24 hours a day, seven days a week.
Dealerships also can purchase vehicles from the platform. Users can be as granular or generic as they want in searching inventory, from seeking a 2017 Chevrolet Traverse Premier with all-wheel drive in Siren Red Tintcoat to simply searching for 2017 and newer crossovers, for example.
Once a store agrees on a vehicle purchase, CarOffer schedules an inspection to be done within 72 hours. The Plano, Texas, company handles logistics; the dealership pays shipping.
Transaction fees are flat at $275, paid by both buyer and seller. CarOffer also includes a 45-day buyback guarantee at Manheim Market Report pricing. The selling dealership pays a variable premium for the guarantee; it typically adds $250 to the seller's cost.
Thompson said about 1,000 dealerships are signed on to use CarOffer. Another 600 or so are on a waiting list as CarOffer works to expand its inspection and logistics capacity.
One reason Thompson has seen strong, early interest is there's no upfront cost to dealers.
That's what led Team Toyota in northwest Indiana to give it a try, said Mike Miskus, the Schererville store's used-car manager. "It's all transaction-based fees," Miskus said. "So there was no negative on our side to roll with the program and see how it works."
Miskus' store has used it primarily to acquire inventory.
Using CarOffer has saved time and money the dealership would have spent at auctions, Miskus said. Team Toyota's used-vehicle sales grew 12 percent last year, and Miskus expects that same rate of increase again in 2020. CarOffer has allowed it to acquire more vehicles to support the anticipated rise, he said. Since October, Team Toyota has bought about 70 vehicles through CarOffer.