The CarLotz braintrust (from left): Aaron Montgomery, Will Boland and Michael Bor
Used-car consignment business CarLotz wants to pull into the space between auto dealerships and the "for-sale-by-owner" market.
Michael Bor, a former automotive and transportation investment banker, teamed with fellow Harvard Business School alums Aaron Montgomery and Will Boland to start the company, which opened its first 70-space lot at 11944 Midlothian Turnpike in June.
Bor, CarLotz's co-founder and CEO, lives in the West End near Libbie and Grove and would pass St. Giles Presbyterian Church on his way to work every day. "There are always four or five cars parked outside with ‘For Sale' signs on the back windows," Bor recalls. "It occurred to me that there should be a place where you can drop off your car and really outsource the prep work, the negotiations, the uncomfortable interactions with strangers, but still achieve the private-market value for your car."
The light bulb went off at an opportune time for Bor. High gasoline prices are increasing demand for both new and used small cars, according to the National Automobile Dealers Association (NADA). The ongoing economic crisis has also ratcheted up the used-car market. "With used-car values increasing this year, consumers are really in the driver's seat if they're planning to sell a vehicle on their own or get more for their trade-in," says Chuck Cyrill, NADA's director of public relations.
For $199, CarLotz will get your car inspected and fixed by a mechanic, professionally clean and photograph the vehicle and list it on major automotive websites such as Autotrader, Cars.com and Craigslist, as well as its own site. The company will also deal with buyer interest, including test drives, and file DMV paperwork. If the car sells, CarLotz deducts $599 from the proceeds.
"For the seller, we take away all the hassle," Bor says. "We get their car sold quickly and at a great price. For the buyer, they're kind of going to a dealership and getting all the benefits of the dealership — selection, a warranty, financing help and all of that, but they're not dealing with the feel of a dealership."