Auto tech startup MintList will launch its used-vehicle auction and trade-in platform in Ontario in mid-July, as the Vancouver-based company takes its first step outside Western Canada.
Chief Executive Officer Mike Wood said the online tool is not designed to disrupt the dealership model but to cut out the “ugly bits” of transactions for both consumers looking to sell or trade in their used vehicles and dealerships looking to buy them.
“It’s not that black-box algorithm anymore,” Wood said. “It’s complete transparency on what your car is worth.”
The platform, already operating in British Columbia and Alberta, lets consumers auction their vehicles to registered dealers without ever leaving their driveway.
The process begins with sellers taking a series of photos and answering a set of questions that show the condition of their vehicles, Wood said. MintList compiles this information, along with a Carfax vehicle-history report and factory data, and assigns the vehicle a grade from one to five.
“The whole idea is to vet the cars enough for the dealers that they can bid comfortably on that car, and they know roughly what their reconditioning [costs] are going to be,” Wood said.
Vehicles are then brought before dealers virtually. Currently, MintList runs 30-minute auctions with participating dealerships twice weekly in BC and once a week with dealerships in Alberta.
Dealers can see the stores they are competing against so they know they aren’t bidding blindly, and time is added to the clock as last-minute bids filter in, ending only when the auction “runs out of steam,” Wood said.
For dealerships, the short auctions save the time normally spent scouring for used inventory while also providing access to consumer vehicles that would otherwise end up on classified sites such as Craigslist or Kijiji. ca.
SELLER CAN WATCH THE BIDDING
“You sit at your desk. You didn’t have to drive across town to look at one car, then drive to the other end to look at another car” as you compete against “four other dealers who are doing the exact same thing,” Wood said.
For consumers — who can, and often do, watch the bids filter in over the 30-minute auction — it offers transparency and reassurance that dealers aren’t trying to undercut them.
“If they watch their car start at $10,200 and top out at $12,900 — maybe $13,100 — they get an understanding that that’s probably the value of their car,” Wood said.
Consumers have 24 hours to accept or reject the top bid.
Those who take it have the choice of simply selling the vehicle to the top-bidding dealership for cash, or trading in their car to any of the dealerships on MintList’s platform that has a vehicle they want.
Since buyers only pay harmonized sales tax on the price difference between their trade in and the new vehicle, there’s an extra incentive for the trade-in route, Wood said.
For trade-ins, MintList gives priority to the dealership making the sale, meaning even if it isn’t the top bidder for the consumer’s vehicle, it can purchase the car at the agreed-upon price. If the dealership doesn’t want the trade-in, it simply passes it on to the dealership that won at auction.
Consumers pay nothing for the service, while MintList charges dealerships a transaction fee of up to two per cent on the consumer vehicles they buy on the platform. Several subscription levels offer perks to dealerships, such as lower transaction fees, in exchange for a monthly charge.
MintList, which currently has 24 employees, has been running in BC for about a year and in Alberta for about six months. It’s currently selling about 100 used vehicles to registered dealers in the two provinces each month, and Wood expects volumes to continue picking up as MintList signs up a larger pool of dealerships.
In Ontario, the company will launch in the Greater Toronto Area. As of early June, MintList had signed up 26 dealerships and expects to add more in the coming weeks to create a critical mass of buyers to take part in the auctions.
A number of large dealership groups, including the Dilawri Group of Cos. and the Humberview Group, have signed on at least some of their stores.
Most dealerships see using the platform as a simple way to attract trade-in buyers and bolster used-vehicle inventories without making major new investments in personnel or time, Wood said.
“You’re not going to win 100 per cent of the cars,” he said, “but you’re going to win more cars, more efficiently, at a lower cost.”