Company Business Model Overview
DrivenMotos is a licensed and bonded South Carolina Department of Motor Vehicle retail car dealer. We own our building in Lancaster, South Carolina and 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.
Moto-Finder Program Concept
Why use the Moto-Finder™ program? We have been testing this concept with family and friends helping them save $$$ in this tough economy. It has provided our friends and family with access to the major national auctions (e.g., Manheim, Adesa, Copart) to acquire their personal vehicles for anywhere in the US thus enjoying a $2,000 – $8,000.00 savings from classical retail dealers
Given our proven financial expertise, we understand the risk of carrying too much inventory along with the velocity of inventory turnover and inherent risks associated with matching inventory to a future sale and unidentified buyer. Some inventory will move more quickly and some will languish awaiting that unique buyer.
In the spirit of mitigating inventory risks we’ve designed our new Moto-Finder™ program which accomplishes a win-win scenario for both us and our customer (significant after-tax $$$ 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 Moto-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 25-35% savings over the traditional retail car lot model. For example, that same $10,000.00 auction priced vehicle would now cost you $11,080.00 v. $12,500 – $13,500 or a savings of $1,420.00-$2,420.00) and the higher value cars ($35-45,000 auction costs) can generate up to $8,000 in savings.
- In addition your retail car dealer will add easily $400-500.00 in various documentation fees that’s already included in our $1,199.00 Moto-Finder™ program.
- A $20,000 auction cost vehicle would save $2,840.00 – $4,840.00 over the traditional retail dealer markup….since our Moto-Finder™$1,199.00 fee is the “same” no matter what the final cost of the vehicle.
- Dell Model – Our Moto-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 Moto-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 included used car dealerships or private sellers).
So how does the DrivenMotos Moto-Finder™ Program work?
- You give us specifically the car and options that you are looking for:
- Color, Year and Make
- Options in vehicle
- Leather, sunroof, navigation, heated seats, etc.
- Give DrivenMotos your vehicle requirements and the “Quality of vehicle” and we’ll match it to the grading scale at our national wholesale car auctions (most auctions rank on a 1.0-5.0 scale).
- DrivenMotos would not recommend purchasing a vehicle with less than a 3.5 on 5.0 scales. This ranking system has been perfected to insure you get the greatest value for your dollar spent against the quality scale format.
- 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.
- $199.00 to start your Moto-Finder™ search and we take either MasterCard or Visa credit or debit cards.
- 25% of the “expected” winning bid PRIOR to DrivenMotos bidding in behalf of our Moto-Finder™ client(s).
- For example, if this same vehicle with identical options has been selling for $10,000.00 over the last 10 plus auctions then before we can place a “live” bid we need to have a prepayment of $2,500.00. Why? The 25% of the expected winning bid is designed to cover our risk of winning the bid and our Moto-Finder™ customer chooses not to proceed with the transaction. Thus, DrivenMotos is then forced to purchase the vehicle (all auction sales are final) and put into our inventory to resale and recapture our unplanned investment…..
- We will hold that car in a failed Moto-Finder™ customer transaction for 14 days. We think this an equitable time frame that allows the Moto-Finder™ customer to complete the transaction of the vehicle they requested DrivenMotos to contractually purchase on their behalf.
- After 14 days, “in the spirit of fairness” we will attempt to sell the vehicle to recapture DrivenMotos original auction purchase price and any and all administrative and selling costs.
- The balance of the final auction purchase price is due the day of the winning auction bid either in cash or either a pre-approved loan to pay the balance.
- Buyers are welcome to join us in live bidding to determine their spending limits on the vehicle that they desire.
- All documentation DMV fees are included in DrivenMotos $1,199.00 fee (minus the initial $199.00 search fee) which will be added to the final winning invoice from the auction (Manheim, Adesa, etc.). Again, another savings since most retail dealers charge $350-500.00 for doc fees.