You are looking to buy a new car and you know what your budget is. You are not sure what the options are – whether a premium hatchback or a compact sedan, since the price-points of the two overlap. And, you have only the week-end to visit car dealers, test drive cars and decide on the car you want to buy. This means your car buying process will stretch over a month or two.
But what if there is someone who can help you narrow down your choice and even bring the cars to your house, one after the other on any preferred day for you and your family to drive it on the roads you normally use. That is what Chennai-based start-up CarPal offers new car buyers in the city. Ten months into the business, CarPal has sold 82 cars through its website and is looking to start operations in either Hyderabad or Bengaluru.
The brainchild of 25-year-old Vignesh Ramakrishnan, a mechanical engineering graduate and a blogger on cars, CarPal gives car buyers a price that it says is lower than what the dealers offer. Besides, it helps customers get finance and has tied up with insurance companies. The portal gets its income from dealers – it now has two slabs and it charges the dealers either of the two slabs depending on the price of the car, from the banks through which it arranges finance for the customers and the insurance companies.
A passionate blogger
Vignesh says he has been blogging about new cars after test driving them and was surprised at the number and kind of enquiries he used to get on car buying. On graduating in mechanical engineering, he worked for a year in the research centre of an automobile manufacturer before starting his own venture.
He first launched a mobile app, CarMatch, in August 2015 that would answer questions from potential car buyers and help them narrow down their options.
CarMatch had an algorithm that would perform the task of finding the right car based on a set of questions that customers would have to answer. This would then be passed on to dealers as a lead, for which CarMatch would get paid.
Vignesh says while there were portals offering services for used cars, accessories and the like, there was none to facilitate new car buying and offering end-to-end service to those buying new ones. A pilot project convinced him there was a good business opportunity and that is how he launched CarPal in April-May 2016. He has tied up with at least one dealer for all the car manufacturers in Chennai. The smallest car he has sold is a Hyundai i10 and the biggest, a Ford Endeavour.
According to him, he doesn’t charge customers anything now, but there have been a few customers who have voluntarily given money, roughly 7 per cent of the savings they got in their car purchase, to CarPal. For those customers wanting to sell their old car, CarPal helps them by getting the best possible quote from used car dealers it has tied up with.
Why would a dealer want to go through him? For the dealer, says Vignesh, this is one more avenue to sell cars and in the highly competitive market, any channel to sell vehicles and meet targets is more than welcome. CarPal, he says, gets an assured price from the dealer, lower than what a customer would get if he or she were to visit the dealership, that is displayed on CarPal’s site.
Looks to raise funds
CarPal is bootstrapped and Vignesh is looking to raise about ₹80 lakh that will help him recruit staff improve the product and also expand to one other city in the next few months.
He would also like to merge the mobile app with the portal, bringing the capabilities of CarMatch to CarPal. This will help it expand to more cities. “It is a win-win-win business,” he says. A win for the customer, a win for the dealer and a win for CarPal.
(The article first appeared in The Hindu BusinssLine.)