The first-ever mobile application making automobile transactions possible at the touch of a screen, Blinker eliminates the role of the middleman in the car buying, selling and financing process.
How Blinker Works
Blinker‘s focus is on facilitating a hassle-free experience for all stakeholders involved in an auto purchasing transaction. Blinker uses a lot of dealer tools used to execute trades, but it has leveraged technology to enhance the experience and create a solution that is executable online without any middlemen driving fees. This allows users to buy and sell cars for free on the platform.
The downloadable app simplifies the process of getting approved for credit, and all the user has to do is upload a picture of his driver’s license. Documents are signed with Docusign. The user posts a picture of the car she is selling and the fund transfer is done online, which eliminates the need for any physical interaction as the entire transaction takes place on users’ smartphones.
All transactions start with one picture of the car and, in less than three seconds, the company can find out all the details about the car from the year to the make, model, approximate value, and the number of miles it has been driven. The company has partnered with Carfax and Blackbook for these reports.
Blinker has its own patented technology. Out of 17 patents filed with the U.S. Patent Office, 13 have been issued.
The Blinker Team and Platform
The Blinker platform has the same credit requirements for auto finance as any other bank. It gives instant pre-approvals with a picture of a driver’s license and, upon authorization, for a soft credit pull. The idea is to have the customer approved first followed by the car. Customers have access to unique offers on each vehicle based on credit score, income, and their ability to pay. The platform does not see the seller, the buyer, or the car.
Currently operating in four states, Blinker’s model is able to generate great auto finance deals for its users. Blinker took its own equity to create a loan portfolio to prove the viability of the model. The business caters to a full spectrum of borrowers having FICO scores between 560 and 800. The loan-to-value (LTV) ratio is usually 20% less than the average dealer offer. The portfolio has faced no delinquencies, highlighting the success of the company’s lending algorithms.
The company has raised a total of $51 million in funding and onboarded 65 professionals in its Denver office, out of which 30 are engineers on the lending side. The company’s president was in senior management at Americredit, a giant in auto finance solutions. All of the above has given birth to a company that is rapidly capturing market share and mind share in the auto industry.
Blinker is now entering into a relationship with Allied Bank and talks are going on with other customers and member groups to expand its reach. Its foundation is to be a fee-based company. It wants to follow an asset light model with no inventory or loans on its books.
Blinker’s Selling Process
The car prices and terms of sale are displayed in the mobile app for full transparency. Car shoppers can set a filter for distance/location, and more, as they search for the perfect vehicle. The average price of cars available on the app is $14,000, but it is not restricted to any particular segment and has even sold a $105,000 Ferrari. Blinker has also partnered with Manheim Auctions, the largest car auctions company in the world, to sell its inventory directly to individuals. The company is extending into selling rental cars and partnering with OEMs to sell cars not picked by dealers.
On average, a Blinker seller gets $2,500 more on a trade than they do through a dealership. Buyers save an average of $2,000 as compared to buying from a dealer. Refinancing from Blinker helps the average customer save $130/ month.
The app has been able to garner a lot of support in a short time since launch. There have been over 175,000 downloads, and Blinker has been successful in generating $44 million in sales. That includes about 3,500 vehicles, 8,000 listings, and the funding of about 650 to 700 loans.
The Changing Auto Industry
Although there are a lot of companies in the market like Shift, Carmax, and Carvana, they are hampered by a model that charges 8%-10% of the sale price, serves only metros and/or focuses only on one part of the trade. There are no players in the market, like Blinker, that facilitate the entire transaction from listing and pricing to car finance. Blinker is able to execute transactions anywhere and anytime. All that is required is access to an internet connection and Blinker will be able to complete a car trade.
Currently, the company is completely operational in Colorado, Texas, Florida, and California. Six more states are ramping up for service. It is looking to expand across the U.S. soon and, by the end of 2018, Blinker hopes to be in all 50 states. The platform will ensure that it is free for buyer and seller. Its model is to generate fees via loans originated.
Target Customers and the Blinker Roadmap
When Blinker entered the marketplace, it had expected that the majority of its clients would be millennials. However, it realized that clients are of all ages and are buying and selling all types of cars. But to ensure optimum portfolio for its loan partners, Blinker does not finance cars below $8,000 in value or over 10 years old.
Blinker is on a mission to empower dealers and customers to transact through their smartphones. It is getting a lot of attention from national strategic partners that love the technology. Its main focus is on acquiring customers as its technology is completely built out. It will tie up with strategic partners to provide complete end-to-end transactions for members and provide revenue share opportunities to make it a win-win proposition. The aim is to become the pre-eminent platform for buying and selling used cars in the U.S.
Rod Buscher founded the company in 2013. He was into the brick-and-mortar auto space, operating in the industry since 1973. As cofounder of the John Elway dealership, partnering the legendary quarterback until selling the dealership in 2013 to launch Blinker, he has inside knowledge of how dealerships operate and cars are sold.
With deep domain expertise in the space, Buscher realized that people usually do not like what they get for their car trades through the dealer and are not satisfied with the financing experience. Using Craigslist for selling cars is not secure, and selling cars with liens is another headache. Blinker was born to solve this gap in service and provide an app which would “put people in control of buying, selling and financing cars.”
Buscher is out to revolutionize the car selling industry. He’s off to a good start.
Written by Heena Dhir.