By grouping consumers into “Buckets” based on the car brand they want to buy, CarBuckets gets dealers to compete to win the group’s business.
By Nancy Dahlberg
CarBuckets CEO Alexandra Esteve set out to remove what many car buyers hate about the purchase process — the dealership experience, the endless negotiating and dealing with incomplete online prices.
Car sales is in her blood — Esteve is a fourth-generation car dealer who came up with the concept for CarBuckets while she was studying for her MBA. A few years later, she said “I’ll just do this because I know what buyers want and I know what car dealers want.”
CarBuckets, a Miami-based startup, is one of the first companies to bring the idea of “buying in bulk” to retail car buying. The company selects the dealerships allowed on the platform. By grouping consumers into “Buckets,” based on the car brand they want to buy, CarBuckets gets dealers to compete to win the group’s business. The dealer with the lowest overall out-the-door price wins (including all taxes and fees), and consumers in the bucket will be matched with the dealer if they choose. “There’s no need for the back and forth — technology is here to fix that,” Esteve said.
So far, the service has been offered only in South Florida, but now it is expanding nationally.
“By leveraging economies of scale, we are able to give our car buyers lower prices than they can get negotiating on their own and we also bring to dealers the volume they need to qualify for manufacturer bonuses to make up that money, so to speak,” said Esteve, who was born in Puerto Rico and moved to Miami when she was 5.
Users are seeing a 42% greater discount on average when they buy with CarBuckets vs. negotiating a price on their own, Esteve said. “Our biggest discount to date was a user who got a $17,885 discount on a pickup. Needless to say, he was very happy.”
Dealers on the platform are happy too because none have dropped their participation, she said.
Esteve came up with the original concept while in grad school at IE Business School in Madrid. After returning to Miami, she put the idea on hold and rejoined her family’s business, Headquarter Automotive Group, where she had already been in charge of Internet sales and would be overseeing a dealership as well.
After a couple of years, Esteve registered CarBuckets and began doing some R&D and tech work. About two years ago, she left the family business and went all-in on building the startup. Headquarter Automotive Group provided seed funding for her concept.
CarBuckets launched its service about a year ago in South Florida but took a couple of pivots. After making adjustments on both the consumer and dealer side of the business model, the team found the formula that works and started using that in January.
This year, CarBuckets has connected 541 car buyers to dealers with the winning bids, Esteve said. “Our user count is more than doubling every month with the same marketing budget. There has been a lot of word of mouth.”
Beginning this week, CarBuckets will also now group buyers around the U.S. by the brand of car they want and place them in a national “Bucket,” with the potential for bigger consumer savings because of the increased dealer competition.
Cars purchased this way will be delivered for a fee, which will be calculated into the price.
CarBuckets is now a team of eight, including Claudia Pou, COO; Chase Vecchio, CTO; and Judy Serra, CFO, said Esteve. She points out that 3 out of 4 of her management team are women, in an industry that is notoriously male dominated.
The platform has 35 dealers locally and CarBuckets has just begun to sign up dealers across the country. They pay a subscription to be part of the platform, and the service is free to consumers.
The company is generating revenue and also is fund-raising, Esteve said.
“Now we are excited to go out there and travel around the country telling our story and signing dealers up.”
Follow @ndahlberg on Twitter or email her at firstname.lastname@example.org
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