Beepi brings Uber-like ease to used-car shopping

Marco della Cava | USA TODAY

Show Caption Hide Caption Beepi aims to take the hassle out of used car experience The San Francisco based startup, which now rolls into Arizona, combines pricing algorithms and staff inspectors to make buying and selling used cars nearly a one-click endeavor.

Editor's Note: This story has been updated to include a quote from CarMax.

DANVILLE, Calif. — Eve Vojvoda has just purchased a used car, shelling out $30,200 for a black 2011 Lexus RX350 with 53,000 miles.

But she's never kicked the proverbial tires. Never test-driven it. Never even seen it.

As Vojvoda waits impatiently on her front lawn in this leafy San Francisco suburb for her Lexus to appear, she laughs at the bold nature of her purchase.

"It's the nicest car we've ever owned, so it felt strange to buy it online," she says. "Before I clicked yes, I thought to myself, 'Am I really doing this?' "

What Vojvoda has done is use Beepi.com, a Bay Area company that hopes to bring Uber-like ease to the long-maligned used-car buying and selling process.

After a modest start last spring, Beepi channeled $79 million in venture capital — extended by the likes of Redpoint Ventures, Foundation Capital and SherpaVentures — into expanding operations to Sacramento, San Diego and Los Angeles. On Wednesday, Beepi opens offices in Phoenix, part of its mission to go national.

Given that cars traditionally are the second-largest household expense after a home, it's no wonder that the number of players in the $1.1 trillion-a-year auto purchasing market is growing.

Companies such as TrueCar.com and Carvana.com are among those leveraging pricing algorithms and negotiation-free sales as a route to overhauling an experience that has long been associated with distrust.

Beepi's premise and promise is simple. Sellers of vehicles up to six years old with reasonable miles can upload basic information and a few photos to Beepi's site, then wait for a visit from a staff mechanic.

If your vehicle passes a 185-point inspection, Beepi agrees not only to sell the car for you but to buy the car outright at an agreed price if it doesn't move within 30 days. While Beepi markets the car, you're free to drive it until a representative swings by to pick up the car upon its sale.

Prospective buyers can peruse Beepi's myriad car profiles online, which include detailed photos of any imperfections. Once a car is purchased, free delivery via a Beepi-branded flatbed truck is initiated. There's a 10-day return policy should you not like the car, as well as a three-month limited warranty.

Beepi's growth is anchored to the modest profit margin that lies between offering both sellers and buyers attractive prices, a model that's aided by not having to store vehicles in pricey warehouses.

"Car buying hasn't really changed since the age of the Model T," says Beepi co-founder Owen Savir, 34. "We thought, in the age of Uber and Amazon, why can't the process be both fast and fun?"

Savir, an Israeli entrepreneur who partnered on Beepi with Argentine e-commerce veteran Alejandro Resnik, 33, says investors initially told him no one would buy a car without a test drive. But in the age of eBay Motors, which is powered by just such anonymous dealmaking, that sort of thinking quickly vanished.

"People really do want no-haggle pricing, and the truth of many places such as CarMax is that they say one thing but often there actually is haggling," he says.

(After this story published, CarMax executive vice president Cliff Wood contacted USA Today to say, "There is no haggling in CarMax's transparent customer experience. The price people see on our window stickers and at CarMax.com is the price they will pay.")

Phoenix-based Carvana, which considers Beepi more a peer-to-peer play compared to its business-to-consumer approach, buys quality cars outright, which it warehouses and then ships out. Caravana currently operates mainly in the Southeast, and keeps its fleet near Atlanta.

"We also offer our own financing," where Beepi offers only financing advice, says Carvana co-founder Ryan Keeton. "We want to own the process from start to finish, and consider CarMax (dealerships) our biggest competitor."

Walter Andrews, who lives south of San Francisco in Beepi's hometown of Los Altos, says he has bought and sold more than 60 cars in his life and enjoys the process. But he was intrigued by Beepi after the price he was quoted by dealers for his leased 2014 Lexus CT200h was thousands below what he still owed on the car.

"I sent Beepi information through their website, and their inspector came to where I play tennis and checked out the car while I played," says Andrews, who says Beepi offered him nearly $30,000 for his car, about $4,000 more than a dealer offered.

"Life can be stressful enough," he says. "If someone can help with selling a car at a fair price, I'm all for it."

As the black Lexus finally rolls down the Danville street, its new owner hops up and down and claps. On the hood of the car is a gold bow.

When the flatbed stops, two Beepi employees lower the vehicle to a parking space marked off by Beepi-branded blue cones.

For the next hour, Vojvoda is talked through the various features of the car. Her husband, Richard, a pilot for American Airlines, stands nearby grinning. "The kids will want to drive this car exclusively, and we'll just have to say no," he says.

The Beepi team drives off with a wave, leaving Vojvoda with two Beepi mugs. These small gifts may seem like nothing in comparison to a $30,000 purchase, but clearly they and other such gestures have had their desired effect.

"This whole experience has been amazing," says Vojvoda, noting that almost immediately after she purchased the Lexus online a package showed up with Beepi-logoed M&Ms and other thank-you trinkets. "I like to shop at Nordstrom and on Zappos, and I'm used to great customer service. So why shouldn't I expect it when I buy a car?"