DrivenMotos Car-Finder™ Program
Company Business Model Overview : DrivenMotos is a licensed and bonded South Carolina Department of Motor Vehicle retail car dealer. Additionally, we own an 8 bay full service garage and our original car dealership building in Lancaster, South Carolina. We have historically been focused on purchasing inventory for our own resale to the general public. DrivenMotos is owned by a CPA and retired executive banker who has over 50 years of practical financial services background.
Car-Finder Program Concept : Why employ the Car-Finder™ program? We have been testing this concept with family and friends helping them save $$$ in this tough economy. It has provided our friends and family with access to the major national auctions (e.g., Manheim, Adesa, Copart) to acquire their personal vehicles for anywhere in the US thus enjoying a $2,000 – $3,000.00 savings from classical retail dealers
Given our proven financial expertise, we understand the risk of carrying too much inventory along with the velocity of inventory turnover and inherent risks associated with matching inventory to a future sale and unidentified buyer. Some inventory will move more quickly and some will languish awaiting that unique buyer
In the spirit of mitigating inventory risks we’ve designed our new Car-Finder™ program which accomplishes a win-win scenario for both us and our customer (significant after-tax $$$ saved).
–Customer Benefits – We project that either a new car or used car dealerships require marking up their vehicles 25-35% from cost of purchase (e.g., dealership purchases at auction for $10,000 and will retail @ $12,500-13,500.00 providing a $2500-3500.00 gross profit margin). This 25-35% gross profit margin is required to overhead like staff, building and more importantly holding and insuring the inventory thus drastically reducing their gross profit margin.
However, the public is not allowed to attend or bid at these auctions and must be done through a Department of Motor Vehicle licensed dealer. Thus is where our Car-Finder™ Program provides the leverage and savings to our customer. DrivenMotos will help you find the car that you’re looking for and thus secure it for the best cost (usually under loan value) and pass those savings to you.
-Customers Constrained – Given this requirement that only licensed dealers can purchase at the national auctions, the typical customer is unable to access these savings and thus forced into one channel to purchase their cars…..a retail car dealer.
–DrivenMotos Benefits – DrivenMotos has the opportunity to buy that same car for 25-35% less than what we ultimately sell it to our future and unknown customer….. ”However” we don’t have to “guess” on what the future buyer is looking for but rather have pre-sold that buyer exactly to their required needs and eliminate the risk of holding an automobile in inventory awaiting that unknown buyer.
- Inventory Risk – Profit Trade-off- While we could make a higher profit margin by selling to that future retail customer (25-35% gross profit margin per vehicle), the Car-Finder™ program allows us to already identify a qualified buyer for a 12-15% gross profit margin to cover our fixed costs to operate our dealership since now no inventory risk. With no inventory risk of holding the vehicle we pass the savings to the customer who enjoys the 13-20% savings over the traditional retail car lot model. For example, that same $10,000 auction priced vehicle would now cost you $11,200 – $11,500 v. $12,500 – $13,500 or a savings of $1300-2,000.00). A $20,000 auction cost vehicle would save $2,600 – $4,000.00 over the traditional retail dealer markup.
- Dell Model – Our Car-Finder™ program is modeled after many companies who mitigate inventory risks with their “just in time model”. For example, Dell historically (recently tried putting inventory into retail stores) never builds a computer until a customer gives his/her specifications and “pays” before it’s built. Why? Dell removes all of the risk of trying to assume which models will sell and the inherent risk of having built inventory that will not sell….thus forcing a sale under their costs to recover their sunk costs. Dell’s current inventory is the entry level machines (<$500) and not their high end computers ($>500). The more expensive computers are not built until an order is received and similar to our Car-Finder program.
Americans buy over 20 million used cars annually (and that’s just the number bought from new car franchised dealerships – It does not include used car dealerships or private sellers).
So how does the DrivenMotos Car-Finder™ Program work?
- You give us “very tight specifications” of the car and options that you are looking for:a. Color, Year and Make
b. Options in vehicle
i. Leather, sunroof, etc.
ii. Then, give DrivenMotos your desired “Quality of vehicle” (most auctions rank on a 1-5.0 scale (DrivenMotos would not recommend < 3.5) under this scale to insure you get the greatest value for your dollar. Additionally, we recommend that you search with cars that have at least 10,000 miles of the factory warranty still protecting the vehicle. This will provide some insurance against warranty items that may occur during your ownership.
- $249 to start your Car-Finder™ search
- 25% of the “expected” winning bid PRIOR to DrivenMotos bidding in behalf of our Car-Finder™ client(s).
- Balance of the final auction purchase price due the day of the winning auction bid either in cash or either a preapproved loan to pay the balance or have cash.a. Buyers are welcome to join us in live bidding to determine limits on this car
- All documentation DMV fees are included in DrivenMotos $1,199.00 fee (minus the initial $249 search fee) which will be added to the final winning invoice from the auction (Manheim, Adesa, etc.)