F&I and Showroom, October 2015

14 F I and Showroom October 2015 Industry Spotlight tire and wheel and theft protection And really the theft protection and service contract are an extension of what comes with every vehicle that leaves our facility which is a year of roadside assistance and 90 days of bumper to bumper coverage F I There are tools out there that allow consumers to complete the entire vehicle transaction online My understanding is results have been spotty at best I take it thats not been the case for Vroom Chesrown Thats correct In fact a significant amount of our business involves customers we never physically meet Currently we have to facilitate those deals with paperwork that we FedEx to the customer Some of it we can sign electronically but retail installment contracts are not one of them But like I said that will change in the next month or so For most dealers theres this mentality that youre giving up that back end profitability if you cant get the customer in the store that you have a lesser chance of selling F I products What theyre doing is ignoring the fact that consumers still dont want to go into that environment and feel pressured especially these younger generations The other aspect is consumers nowadays especially if theyre used to shopping on sites like Amazon they want an easy process So its one thing to build the tools and spend all this capital to build a great big website but if you dont focus on the experience its not going to work Walmart has proven that They have the best prices but it is not a great experience compared to Amazon F I So how does the finance portion of the process work Chesrown Our process is fairly similar to what youd find in most dealerships The customer fills out an online credit application we send it out to whichever lenders might fit the profile and then we get our approvals back The big difference is we dont let a consumer drive off in a car without a full approval on that vehicle And when we place a contract with a lender thats who gets the deal We dont change anything and we dont start battling for rate after the fact We let the banks serve up their best offers and let the consumer make the choice F I I noticed your site really emphasizes that Vroom also buys cars from consumers Is that your main inventory source Chesrown For us especially as were growing we have to find any avenue we can to acquire vehicles The very first thing we did when Allon and Elie came on board was we built a product that allows a consumer to use their smartphone to scan their VIN take a couple photos of their vehicle and get an actual cash offer And by the way well beat CarMax offers all day long and you dont have to physically drive to a location to sell your car We will pick it up Worst case scenario is youll have a seven day offer thats as good as cash in your pocket And you can use that offer to make sure you get the most out of your trade if you decide to visit a new car dealership So that was kind of the first step of our pro consumer piece But we are a used car retailer and for us to carry the inventory we carry we have a team that spends all day sourcing cars We carry about 38 makes on our website And because we cover a broad range of customers we have to carry everything from Maseratis and Aston Martins to Nissan Altimas and Honda Accords F I Some of the major public and nonpublic dealer groups are introducing their own version of the online buying experience What are your thoughts Chesrown I think everyone is trying to make a big impact when it comes to digital You can spend a lot of money building sites but we didnt have to We brought on our own great team and they are really focused on how customers want to go through the process So we control the experience the development and the speed of it We dont have to hire a firm for millions of dollars to execute this We have great people who do that for us internally Former Wix com co CEO Allon Bloch brought tech experience when he joined Vroom last November Vroom carries about 38 makes all sourced by the firms team of inventory buyers and from car buyers who take advantage of Vrooms car selling app Vehicles are then sent to Vrooms 22 acre reconditioning facility in Grand Prairie Texas where they are prepared for sale And each vehicle comes with a seven day money back guarantee a no questions asked return policy a 90 day bumper to bumper warranty and free nationwide shipping