This trio will make you stop laughing at used car salesman jokes

Gozoomo co-founders Arnav Kumar, Himangshu Jyoti Hazarika, and Aniket Behera.

Research firm Frost & Sullivan says one used car was sold in India last year for every new car purchased. In the US, the ratio is three used cars to one new car sold.

This seems counter-intuitive. After all, India is the more price conscious market, where most people prefer the affordable Xiaomi to the pricey iPhone. So, why don’t they see value in used cars, considering that new ones depreciate by 30-40 percent within a year or two? And these are hi-tech cars which keep up their quality for 8-10 years.

There’s one word to explain it: trust. Or the lack of it, to be precise.

Used car dealers in India fit every stereotype. Disorganized, fragmented, unreliable. They will do up a broken-down car and sell it to you at six times its worth if they can. The old joke goes, “What’s the difference between a used car salesman and a software salesman? The used car salesman knows when he’s lying.” It still rings true in India.

Not that Indian used car dealers fall morally short of their counterparts elsewhere in the world. It’s just that dealerships are far more regulated in developed markets. And insurance processes keep a paper or digital trail of every repair job, unlike in India where you have no way of knowing what a car’s been through except by looking under the hood and making an educated guess.

So Gozoomo, a six-month-old startup based in Bangalore, sends expert technicians to look under the hood for you. And today it announced followup funding of US$5 million from SAIF Partners.

Disrupting the used car market

When Gozoomo started out as a used car marketplace, it offered inspections as an add-on service. I first met its co-founder and CEO Arnav Kumar in Bangalore three months ago. Then it had two inspectors available to verify the quality of a car, for a fee. Today, there are 25 inspectors in Bangalore, and five in Mumbai, where Gozoomo launched last month. Every car listed on the platform is now pre-inspected – against a 150-point checklist – and there’s no fee for the inspection report.

“We saw that 90 percent of the people who took our paid inspection closed the sale through us. That told us it’s something people really want,” Kumar explains.

Gozoomo built a mobile app to help the inspectors take pictures and fill in all the required details at the inspection site itself, so that the car’s listing goes live as soon as it’s done. This also means the inspectors can check many more cars in a day.

US-based Carfax has been providing vehicle history reports in the American and Canadian markets, but in India Gozoomo had to come up with an inspection model because of scant records.