Anyone interested in exploring car sales ideas in SF/Bay-Area? I have one for which I did a bunch of market research and it looks promising. Happy to explore more.
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Startup Idea: Used Car Leasing
11–20 of 55 posts
Re: Startup Idea: Used Car Leasing
#12Seems to me the real obstacle would be financing the operation. Finance shies away from used vehicles because they are much more difficult to accurately appraise, and without accurate appraisals you are assuming another (large) dimension of risk.
Yeah, I'm not sure there is a large underutilized fleet of cheap, high value vehicles out there. (High value meaning predictable/reliable/etc, not necessarily sticker price)
Where do rental cars go after they're two or three years old? I've always wondered, but they seem like a stock of well maintained vehicles ready for leasing.
Re: Startup Idea: Used Car Leasing
#13I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. With current interest rates a lease would probably end up bringing in less revenue than a sale, new cars move at low prices because dealerships get volume bonuses. Those same bonuses don't apply to used cars so you're eating away at your bonuses if people are now tempted to lease a 2012 for less than a new car. This wouldn't make financial sense for them to do, even with MB-USA while they offer this service it's not exactly what they push hard to get you to do.
Without the infrastructure and support of an auto manufacturer this would be hard to get a profit, and no dealership would find this to be the best business model.
Re: Startup Idea: Used Car Leasing
#14Anyone interested in exploring car sales ideas in SF/Bay-Area? I have one for which I did a bunch of market research and it looks promising. Happy to explore more.
post your contact info :)
I know from posting these ideas that there is a lot of latent interest, but less publicly stated.
I post my email all the time on HN and never get spam. Thanks gmail! See: ivan.kirigin@gmail.com
Re: Startup Idea: Used Car Leasing
#15Earlier quoted context omitted.
Yeah, I'm not sure there is a large underutilized fleet of cheap, high value vehicles out there. (High value meaning predictable/reliable/etc, not necessarily sticker price)
Where do rental cars go after they're two or three years old? I've always wondered, but they seem like a stock of well maintained vehicles ready for leasing.
they seem like a stock of well maintained vehicles ready for leasing
Please excuse my mirth, but fleet vehicles are generally not well-maintained, and the folks renting cars tend to be hard on them.
Re: Startup Idea: Used Car Leasing
#16IIRC (at least in California) it is illegal to lease a used vehicle - it must be purchased. I don't know what the reason for this is, or if I even remember that correctly but I'm pretty sure its a law because when I purchased my car I checked into this. You can transfer your lease (i.e. swapalease.com), but in order to do it legally the swapper typically has to have their credit approved and fill out paperwork for th…
If anyone has a link, that'd be helpful. Start in a state without such regulations. Or just ignore them until you're big enough to matter to regulators.
Issue is lemons and adverse selection. New cars have probabilistic risk of defects. Used cars, not so much. Leasing depends (mathematically) on correct and reliable modeling of residual values. Once you get a starting pool of unknown risk [1], somebody is playing a fools game. Just a couple things to think about.
https://en.wikipedia.org/wiki/Lemon_law
https://en.wikipedia.org/wiki/Adverse_selection
Edit: [1] State lemon laws vary by state and may not necessarily cover used or leased cars, and other goods.
Re: Startup Idea: Used Car Leasing
#17I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. With current interest rates a lease would probably end up bringing in less revenue than a sale, new cars move at low prices because dealerships get volume bonuses. Those same bonuses don't apply to used cars so you're eating away at your bonuses if people are now tempted to lease a 2012 for less than a ne…
"your margin is my opportunity"
It matters a lot more if people are interested in this than if dealerships maximize profit doing it. I think people would move away from ownership if it were easier, and considering all the parts of the process that could be improved, it seems like a good experiment.
Re: Startup Idea: Used Car Leasing
#18Earlier quoted context omitted.
If anyone has a link, that'd be helpful. Start in a state without such regulations. Or just ignore them until you're big enough to matter to regulators.
Issue is lemons and adverse selection. New cars have probabilistic risk of defects. Used cars, not so much. Leasing depends (mathematically) on correct and reliable modeling of residual values. Once you get a starting pool of unknown risk [1], somebody is playing a fools game. Just a couple things to think about. https://en.wikipedia.org/wiki/Lemon_law https://en.wikipedia.org/wiki/Adverse_selection Edit: [1] State l…
Modeling failure of a used car doesn't seem that different to me than a new car. There is a distribution, probably more expensive for slightly used cars. It can be modeled and incorporated into price.
Re: Startup Idea: Used Car Leasing
#19I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. With current interest rates a lease would probably end up bringing in less revenue than a sale, new cars move at low prices because dealerships get volume bonuses. Those same bonuses don't apply to used cars so you're eating away at your bonuses if people are now tempted to lease a 2012 for less than a ne…
>I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships.
No, they're not. New car trades are liquidated at auction houses.
Source: I work in the automotive industry.
Re: Startup Idea: Used Car Leasing
#20Caas car as a service would be better directly from the manufacturer.