Carlypso Could Change Everything About How We Buy And Sell Used Cars

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Let’s say you’ve got a used car that you’d like to get rid of. You’ve basically got two options: Sell it to a used car dealer, or sell it yourself. The potential perils of getting ripped off by taking the first route have been well-documented with decades of “used car salesman” jokes. But selling a car by owner is no walk in the park either.

First you’ve got to figure out how much to list the car for. Then you’ve got to craft an attention-grabbing “for sale” post on forums such as Craigslist and Cars.com. Then the real fun (aka torture) begins: dealing with the wide world of used car buyers. You’re likely to get contacted by a lot of used car dealers trying to convince you to work with them anyway. And when it comes to dealing with the general public, “I don’t have $5,000, but I do have a rusty speedboat/collection of 1980s comic books/old riding lawnmower” are not unusual bartering offers to receive. It can be a weeks- or months-long process, and a major headache.

Enter Carlypso

A new startup called Carlypso is offering another option. Essentially a concierge service for selling cars by owner, Carlypso is a service that takes care of all the above issues that come with selling a personal used car, and much more.

Carlypso, which has raised $1.2 million in seed funding and is in the current Y Combinator Summer 2014 class, purports to provide the ease of trading in your car to a dealer, with the financial rewards that come with selling the car yourself.

How It Works

Carlypso works like this: A seller enter details the car’s details on Carlypso’s website, and the company advises the seller with a ballpark figure of how much money it could fetch using its own pricing algorithm that takes into account local data from dealerships and successful listings (an extra large pickup truck will fetch a higher price in Texas than in Manhattan, for instance.) Carlypso then sends an inspector from its nationwide network of certified mechanics to inspect the car, take photos, and attach a “Carlypso device” that tracks the vehicle for when potential buyers come for test drives. Carlypso also formats a “for sale by owner” listing, and helps post it across a number of outlets.

From there, the seller continues to use the car as usual. When it’s not in use, the seller parks it in a driveway, or a local parking lot, or down the block, so that interested buyers can check it out or take it for a spin. Carlypso filters through all of the inbound offers, and contacts the seller only when there is one that is deemed reasonable. The seller never needs to meet the person who buys the car. If the car is sold, Carlypso collects a 5 percent “listing fee” that’s capped at $1,500.

Right now, the service is available throughout California, with a nationwide launch currently in beta.

Carlypso, which was founded in 2013, has helped facilitate more than 125 by-owner car sales to date. Co-founders Nicholas Hinrichsen and Chris Coleman, who started Carlypso as a money-making hobby while students at Stanford business school, tell me that each transaction is profitable for the company. Carlypso currently has five full-time staffers.

From here, Hinrichsen and Coleman say they can scale Carlypso’s reach significantly with its existing staff and technology infrastructure. Since the company is not a dealership, Carlypso has no inventory, car lot, or salespeople. Future hires will be in adding more engineers to perfect the platform, as well as customer service representatives to communicate with buyers and sellers as necessary.

Using Tech To Clarify An Opaque Process

It’s a brilliant concept that has the potential to be really huge. Even as talk of self-driving cars is taking over the tech sphere, personal vehicles are a large and growing market: This past year was the biggest year in history for car sales, with more than 82 million vehicles sold globally. Used car sales is a $400 billion industry in the U.S., and $290 billion worth of those cars are traded in to a dealer each year.

While some used car dealerships will likely always exist — there will always be a market of people selling cars who need cash right away, and don’t have time to wait out the sale process — Carlypso is poised to make a huge dent in how things are done. Carlypso is a perfect example of the kind of much-needed change that technology can help bring to a historically opaque and inefficient process. I’m looking forward to seeing how the concept and service develops in the months ahead.

Here’s a video of Hinrichsen and Coleman discussing how Carlypso works: