HotSwap To Enter $370 billion Used Car Market

Used car sales are big business – at least $370 billion/year in the U.S., with $81 billion or so of that occurring online. New startup HotSwap wants to apply some of the more recent trends on the web to that market, and bring more buyers and sellers together. And while used car sales aren’t exactly sexy, HotSwap is a very cool site. Think YouTube, for used car sales.

The company, which is based in Berkeley, CA, allows anyone to list a used car for sale. In addition to basic information, people are asked to include a video of the vehicle, which is embedded in the listing. Videos, they say, are a much better way of showing off a car. And with the ubiquity of simple video cameras (most digital cameras also take video), just about everyone can easily create and upload a video. See the video at the end of the post for more details.

Listings by individuals are completely free. Dealers pay a small fee per listing and also pay for more advanced software to keep track of listings.

The site has fairly useful Ajax tools for refining search, allowing visitors to look for specific color, type of car, location, mileage and price. Offers can be made directly via the listing, or viewers can ask a question, etc. Listings will also be able to be embedded into other sites.

Listings are light since the site is pre-launch and no one has heard about it. But they’ve already inked a deal with Red McCombs Automotive, which has around $800 million/year in sales and will list every used car on HotSwap. The company says they are also in discussions with AutoNation, which has nearly $20 billion a year in revenue.

The site hasn’t officially launched yet. There are no credentials stopping people from visiting but much of the functionality hasn’t been finished and there are bugs. The company says they’ll officially launch in the next few days.

HotSwap raised “around” $1 million in funding from Kinsey Hills Group (who also funded Scribd) last month. They compete head on with eBay, of course, as well as sites like Vast and, to a lesser extent, Edgeio (which I co-founded).