SAN FRANCISCO -

Instamotor co-founder and former car salesman Val Gui had just about every job imaginable during his dealership days.

“I sold cars on the floor, I did financing, I opened up new stores for the company, (business) development, and basically every job,”  Gui said.

After his work with Victory Automotive Group, one of the biggest takeaways for Gui was just how “capital-intensive” running a dealership can be: inventory costs, facilities, employees and so on.

So, when he co-founded his own company, the goal was to serve a different segment — private-party buyers and sellers — and find a way to do so in a less capital-heavy manner.

The result was Instamotor, a peer-to-peer car marketplace app based out of San Francisco that recently completed its beta launch. The company has since expanded into its first market outside of California, bringing its services to the Houston and Dallas-Fort Worth areas.

And Instamotor has continued expansion on its radar for 2016, Gui said. There are currently about 1,000 cars per month sold in California on the platform, and Gui pinpoints the annual gross merchandise volume at $150 million.

With its foot (boot?) in the Lonestar State, Instamotor has its eyes on continuing growth in Texas and the Midwest, Gui said.

“There’s large markets that are still open, and we believe that we can come in and help clean up what’s going on in private-party transactions, and really try to add that trust and safety and some value to both buyers and sellers,” he said.

What makes Instamotor different?

The increasing presence of direct-to-consumer or peer-to-peer services like Instamotor and their recent expansions have become a common theme in the used-car space, particularly as the industry mainstays are ramping up their digital operations, as well.

But Instamotor sees itself as somewhat different than similar platforms, Gui said.

“We see ourselves as more of a pure marketplace than a lot of other players out there. We really see ourselves as being similar to something like Craigslist, except that we focus on trust and safety within the marketplace,” he said.

It doesn't offer shared services like some of its peers do, Gui said, but there are no transaction fees for buyers or sellers.

Again, Instamotor also focuses on the private-party sector, instead of the crowd that would typically go to the dealership to buy vehicles.

“There’s really two types of consumers. On one side are the consumers that are a little bit more convenience-sensitive. These are the consumers that are willing to go to the dealership … they want to have that variety there, they want to have that physical help with the financing and the test drive, and to walk them through it,” Gui said. “And that’s what the other players are targeting.”

Instamotor, meanwhile, hones in on the consumers who know they want to go the private-party route, he said. Part of why the company does not charge transaction fees, Gui said, is because many choose the private-party route for the financial benefit.  

In essence, the company targets the private-party buyers and sellers since, “we feel like that market has been underserved substantially in the past,” Gui said.

Financing

Auto Remarketing also asked Gui about the financing options Instamotor has available. 

“That’s actually what our business model is based off of. We know that there’s going to be a portion of consumers that will need financing to purchase a vehicle. And we’ve partnered with other people to help with that financing aspect of it,” he said. “And we try to make it fast and easy on the app so that they can get that application and be ready with a financing offer that they can make a purchase with. That’s actually how we bring in our revenue.”

The company works with a vendor that has partnerships with banks and credit unions, Gui said.

Working with traditional players

Many of Instamotor’s peers have partnerships with companies that would be considered some of the more traditional automotive players. Instamotor is no different in that regard. For instance, the company’s vehicle listings include vehicle history information from Experian AutoCheck. And there may be more collaboration with industry mainstays to come.

“I think that the traditional players still have a role in what’s going on,” Gui said. “I can’t get into specifics, but we are in talks with some very traditional players around some partnerships that’s going to help both of us. And we believe that there is value there for everyone. So that’s something that we’re very bullish on.”