Shift Start-Up Helps You Sell Your Old Car & Find A New One: Are Used Car Dealers Doomed?

November 24, 2014

Getting rid of a car is rarely fun or easy. Generally speaking, you're left with two options: sell it yourself, or trade it in at a dealership.

Neither is ideal. Trading in a vehicle is simpler, though you'll lose a bit of dough in the process. (The transaction has to leave enough margin for the dealership to make some dough, after all.) If you want to walk away with the full value of your ride, you'll need to list it on websites, in newspapers, and on social media, which can mean a lot of work, depending on the make and model you drive and how much you want to get from the sale.

Now, there's a third option, courtesy of Shift, a San Francisco-based start-up that facilitates the sale and purchase of used cars. Shift employs a curious business model that upends many prevailing traditions in the dealership world -- and given the frustration that many consumers have with auto dealerships, that could be a huge selling point.

Apart from its internet-only approach to auto sales, what makes Shift unique is its reliance on "Car Enthusiasts" -- basically, sales experts who are tasked with the goal of helping you sell your current car or find a new one. According to Shift's press materials, these Car Enthusiasts are very mobile and very hands-on:

"Buyers. If you’re interested in a car on Shift’s website, you can tap a button to have our Car Enthusiasts bring it to your home for a same­day test drive. If you decide to buy the car, they will help you with financing and then complete the transaction on the spot.

"Sellers. Don’t waste time driving around to dealerships. Our Car Enthusiasts come to your home to offer a no­ obligation instant price quote, pick up your car, get your car detailed, professionally photographed, posted online, optimized for search on all major distribution channels, and handle all the paperwork."

So, how does Shift make money? If you sell through the service, you do end up paying a fee, but unlike the cash you'd fork over to a real estate agent when selling a house, Shift's fee isn't a commission on the sale price. Instead, Shift collects a flat fee that's based on a quote provided to the seller up front. As a result, Shift says that sellers get a better deal than they would if they traded in a car at a dealership, but it's not quite as lucrative as selling directly to another party on Craigslist.

Buyers have it even easier. Not only do Shift's Car Enthusiasts bring rides right to shoppers' doors, but the company also boasts a seven-day/250-mile, no-questions-asked return policy. And as mentioned above, Shift says that it can help arrange financing for buyers -- though we still encourage you to shop around.

WILL IT SUCCEED?

At the moment, Shift is available only in San Francisco and Los Angeles. However, it has three very important things going for it, which could bode well for the company's nationwide ambitions:

1. A disruptive business model that puts customers first: There aren't many people who enjoy the process of buying a car. Compared to purchasing TVs, computers, clothing, food, or almost anything else, buying a car is complex, confusing, and time-consuming. It feels burdened by decades of laws and traditions that have failed to evolve alongside consumer habits. Shift promises to make the process a bit more transparent and a whole lot easier, which could go over well with shoppers. 

2. Mobility: Not only does Shift have a mobile staff that brings cars to potential buyers, but it's also entirely web-based, designed for people who spend a lot of time on smartphones and tablets. That's how many people prefer to do business these days, making Shift more attractive than many conventional dealerships. It also means that Shift can maintain a network of Car Enthusiasts without brick-and-mortar locations, which helps keeps operating costs down and allows the company's fee-based model to work.

3. Deep pockets: The company's staff and board boast resumes with many tech credentials, including long stints at Google and Dropbox. Those kinds of connections, paired with items #1 and #2 above, have helped Shift raise nearly $24 million in seed funds. 

Is Shift the sort of service that might appeal to you? If you live on the West Coast, have you had the chance to use it? Share your thoughts in the comments below.

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