Tred Looking to Shake Up New Car Shopping Experience With Test Drive Platform

For anyone looking to buy a new or used car, the process is usually the same. Research online, get advice from friends and family, and test drive cars at dealerships before deciding on a final vehicle. Seattle-based Tred is looking to shake up the way people buy cars with its new at-home test driving platform, launching first in Seattle and then in cities across the U.S.  The company was part of the TechStars Seattle startup accelerator program this summer, and is gearing up for a public launch in the next few months.

Founder Grant Feek has a background working at BMW dealerships, and says he founded Tred to make new car shopping more convenient for consumers, and to give dealerships a new way to sell cars without taking staff off the sales floor. “We try to think of it not that there’s a problem with the existing shopping experience per se, but just that the really fun part of it is test driving, and that’s what we want to make a lot easier to do,” he said. “There’s an element of logistical ease to this, and there’s also an element of  people not wanting to feel the pressure of the showroom.”

The company is targeting families and young professionals who want an easier way to test drive new cars and purchase them from the comfort of their own home. Tred eliminates the need to go to a dealership, working with dealers to let consumers pick out the models they’d like to test drive, adding any specifications on features they definitely want or don’t want, and specifying a window of time they’re available. Tred reps deliver the requested cars from local dealerships to the consumer’s home or office during that time, confirming two hours before so drivers know they definitely have that model in stock, and drivers can then compare vehicles side-by-side and drive in their own neighborhood.

If a consumer isn’t ready to decide after the appointment they can schedule another test drive, and Feek said they’re currently building a ratings app to help people keep track of their thoughts and feedback on each vehicle after a test drive, rating everything from comfort to features. Once a consumer is ready to purchase or lease a vehicle, they can find out how much they would get for a trade-in if they want to trade their currentl vehicle, and get a set price from the dealership. Then they would agree to the price of the new vehicle, a Tred rep would come pick up their old car and drop off the new one, and they would finalize paperwork (including financing options, which can’t be processed via Tred) at the dealership, or at home if the forms can be sent online.

In terms of how Tred’s pricing works and how it works with dealerships, Feek said the company works with dealers on bulk pricing arrangements by pushing volume to dealers, so they are able to give shoppers a better price than they would get on their own. Shoppers who are scheduling test drives won’t see an exact price when they sign up for a test drive, rather they’ll see an average price for that family of models, then just prior to their test drive they’ll see a sticker price showing a price spectrum based on all the features they’ve requested and the manufacturer’s suggested retail price (MSRP). They finally see the exact price for that model when they’re finishing up their test drive, and Feek said the price will always be below the average transacted price in the buyer’s area (with no room for haggling a better deal, unlike dealerships). Not giving an upfront price might be a turnoff for shoppers whose first concern is cost.

“All of the people we’ve been talking to about pricing generally will say the same thing. They say ‘I just don’t want to get screwed,’ and we’re very clear that you’re not going to get screwed, in fact you’re going to get a better price than you could negotiate on your own through our system because we have bulk pricing,” he said.

The company is targeting the new car market exclusively right now, but there’s likely a big opportunity to get into the used car market, since Americans bought three used cars for every one new car in 2011. Feek said the marketplace supports any cars sold from a dealership, but when they get into used cars it presents problems in terms of availability, since if someone requests a car on Monday for a Saturday test drive, the vehicle could be sold by then.

Feek said every dealership they’ve approached in Seattle has agreed to sell their cars through Tred, and currently brands like Audi, Mercedes, Honda and Toyota are the most requested vehicles. Tred’s model brings up the question of why dealerships even need to be part of the equation, since they could conceivably work with manufacturers directly. But Feek said they’re not trying to cut dealerships out of the equation, rather make the new car shopping experience better. “We effectively are pre-qualifying shoppers for them,” he said. “We are all about making dealers better, and allowing them to bring customer service to the next level,” he said.

Whether consumers are willing to sacrifice price transparency up front for the comfort of test driving in their own driveway remains to be seen, but if early dealer interest is any indication, it’s a model that is taking off with dealerships looking to get more customers without people driving into their lots.

 

Erin Bury

Erin Bury

Erin has covered startups and technology for over three years in publications including Sprouter Weekly, The Globe and Mail, Business Insider, Mashable, and VentureBeat. She also writes a regular startup column for the Financial Post, and is a technology expert on CTV News Channel. Before BetaKit Erin worked as Director of Content & Communications at Sprouter from its launch in 2009 until its acquisition by Postmedia Network Inc. She was recently named one of Marketing Magazine's 30 Under 30 in 2012.

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