This Company Wants to Change How We Buy and Sell Used Cars

Dealerships handle the vast majority of vehicle sales in the United States. That in mind, private-party purchases are an important part of the American car market, despite the lack of many security and financial services that come with dealer transactions. Caramel is striving to change that with a new e-commerce platform aimed at improving the private-party sale process by providing dealer-like services to individual buyers and sellers.

Disclaimer: Roads & Tracks‘s parent company, Hearst, has invested in Caramel.

Ask Americans how they feel about car dealerships, and there won’t be many positive responses. But financing a private-party purchase isn’t easy, and there aren’t any warranty packages available. Add to that the hassle of titling and registering a vehicle on a bill of sale, and the whole process can be daunting compared to a dealership trip. Dealers invest in software to ease the process for customers as well, while there’s been no help for private-party buyers. Ed Brojerdi, co-CEO and founder of Caramel, is aiming to bring those e-commerce tools to those adrift non-businesses who are selling (or buying) cars.

caramel ecommerce app for private party purchases

Caramel

“It’s one of the largest retail markets in the United States. The irony is that most of the attention, innovation, technology and software that’s been coming out the last handful of years has been directed towards new car transactions,” Brojerdi told R&T. “You know, providing software and digital tools for dealerships and things of that nature. But when you look at private parties, it’s been largely ignored from a technology innovation perspective. When you go to do a private-party transaction, you feel like you’ve been transported to the Eighties.”

Caramel aims for its software to be used alongside traditional online vehicle marketplaces in an attempt to improve the current private-party shopping experience. Among its features are enhanced safety functions that allow buyers and sellers to upload scans of their driver’s licenses. From there, each party can use the app’s biometric selfie feature to verify their identity, which is then matched against existing DMV data. This aims to ensure a buyer isn’t laden with toll fees or citations that may be attached to the seller’s title. The system also checks that the person selling the car has legal ownership of the vehicle. Price negotiations and general vehicle conversations are contained within the Caramel app or website, an effort to limit the need for any sort of uncomfortable face-to-face interactions. All of the paperwork can be handled through Caramel too, thanks to their integration with DMV and DocuSign services. Brojerdi claims the service can even apply for registration discounts for military service members and others who qualify.

caramel ecommerce app for private party purchases

Caramel

Once the seller and buyer have agreed to a price in the Caramel system, the seller receives an overnight parcel for the vehicle’s title. Once that title has reached Caramel’s offices, the buyer’s funds that have been transferred through Plaid are released from Escrow and passed to the seller.

Caramel can also help in choosing shipping options for the acquired vehicle if it’s inconveniently located—from city to city or state to state.

During the buying process, users have the opportunity to utilize a number of features previously available only from dealers. This includes filing for financing from verified lenders like Ally Financial (including loans for exotics and classics). Caramel also allows customers to compare rates and enroll in insurance for their new car in real-time. Caramel claims to ease reliability concerns by way of purchased vehicle service packages from Zurich. The company even worked with partners to develop unique service packages for EVs and exotic cars.

caramel ecommerce app for private party purchases

Caramel

“We work with a partner who has built a custom EV program and an exotic warranty program. If you buy that 911 Turbo from Bring a Trailer, very few folks can get that car covered if the transmission goes out for example,” Brojerdi said. “We provide some coverage plans for that as well on the vehicle service contract. We tried to think through what real current enthusiasts are, but also the mass-market car people need in the private-party sector.”

In an effort to further assist enthusiast buyers, Caramel has also integrated an optional digital inspection tool. Sellers will be tasked with taking 13 photos of the car, which are then fed into a machine-learning program. The software will then analyze the images and produce their take on a condition grade report, similar to what you might find at an in-person auction. If a buyer is unsatisfied with the results of this inspection, they can cancel their purchase without penalty.

caramel ecommerce app for private party purchases

Caramel

As Caramel tries to build trust with the automotive community, the service doesn’t currently cost users anything. While you don’t see Caramel organically integrated into the popular vehicle marketplaces yet, for now, a Caramel link can be added to online listings. Brojerdi hopes that Caramel will be likened to the CPO dealer process.

“My crude analogy would be like when certified pre-owned cars were launched a few decades ago,” Brojerdi told R&T. “People suddenly were like ‘I’d rather have a CPO car versus a normal used car.’ In a way, we’re sort of thinking if there’s that little Caramel link in a post, I as a buyer know that this person is willing to go through security validation. They’re willing to make sure that my money and the title are handled digitally and professionally.”

All of this has the potential to change how we currently use vehicle marketplaces online. And change would be a very good thing.


Born and raised in Metro Detroit, associate editor Lucas Bell has spent his entire life surrounded by the automotive industry.

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