CarWoo Raises $6 Million To Spare You The Car Dealership Blues

Buying a car doesn’t have to be such a nightmare, after all.

That’s the promise of CarWoo, a startup that looks to take the stressful negotiation tactics and pushy salespeople out of the equation, allowing consumers to buy their car online with a relatively small amount of hassle. Today the company is announcing that it’s closed a new $6 million funding round led by Interwest Partners, Comcast Ventures, Blumberg Capital, and Raymond Tonsing. The company has now raised over $12 million in total, after a $6 million round last year (it was also part of the Y Combinator class of summer 2009).

In conjunction with the news, the company is announcing that it’s landed a new COO: Rudi Thun, who was previously the GM of AOL Autos, the fourth biggest online car site (Disclosure: TechCrunch is owned by AOL). This is a significant hire for the team, as the core team of founders didn’t actually have any experience with cars when they first started the company. They say that’s served them well up until now, but it was time to bring someone onboard with extensive experience in the space.

CarWoo streamlines the car buying process by flipping the traditional model on its head.  First, users head to the site, where they input the make, model, and trim of the vehicle they’re looking for. Dealers who have signed up with CarWoo can then compete against one another for that customer — naming their price (which the customer can counterbid on), and answering questions as well. So what about test drives? CarWoo CEO Tommy McClung says that a lot of people go to a local dealership to try a vehicle out, then head online when it’s time to actually buy the car.

McClung says that the company has managed to quadruple the number of dealers using the service in the last year alone — they’re now at around 11,000 dealers nationwide. And while the company doesn’t disclose how many vehicles it’s sold, he says that the site attracts a large enough userbase to make the site worthwhile for those 11,000 dealers. Another interesting trend: while price is obviously a factor as users decide which dealer they want to work with, McClung says that most of the time users wind up choosing a dealer who didn’t offer the absolute lowest price. This, he explains, is because there are other factors involved: customers prefer dealers who are more responsive, professional, and so on.

CarWoo makes money in a couple of ways. Consumers wishing to search for three or more car models at once pay $100 (there’s a new, free plan that just launched that lets them search for one car at a time). On the other side of the equation, dealers can list their vehicles and complete transactions for free. The site recently launched a premium ‘Dealer Plus’ option that lets them pay to receive advanced analytics — which are designed to help them compete on those aforementioned factors that can help decide who lands the customer.