Daimler-backed AutoGravity startup aims to make car buying easier

A look through various
screens on AutoGravity’s mobile-based app.
AutoGravity

• AutoGravity is a California-based startup that aims to
  change the way consumers buy and lease cars. 
• AutoGravity has developed app-based technology that
  allows consumers the ability to
  pick out their desired vehicle at their desired
  price and prequalify for a
  loan before even stepping foot into a
  dealership. 
• “Our main goal, very simply, is to radically change the
  way people buy cars,” said AutoGravity’s Chief Technology
  Officer Jason Bonifay. 
• Since its national launch in June
  2017, more than $3 billion worth of vehicle financing loans
  have been requested. 

The California-based
company AutoGravity is trying to change the way people buy
cars. 

The company
has developed an app-based
technology that lets consumers pick out their desired vehicle at
their desired price and prequalify for a car loan before even
stepping foot into a dealership. 

The startup has already generated more than $3 billion
in vehicle financing since its national launch in June
2017. 

“Our main goal, very simply, is
to radically change the way people buy cars. When we do our job
right, you’ll be able to use our app, find the car you want, find
the financing, and walk into the dealership,” Jason Bonifay,
AutoGravity’s chief technology officer, told Business
Insider. 

The app is clean and basic, with
only five screens to click through. The “Home” screen lets
consumers browse cars by price, style, maker, or dealer. The
“Tools” screen lets consumers determine the price and terms of
the car, and comes equipped with an interactive pie chart to show
how much the down payment will affect monthly costs. The “Garage”
screen allows users to save and compare their choices. The
“Credit Apps” screen then searches for financing per the selected
terms and presents users with no less than four offers to choose
among. 

At
look at the “Browse” page on the AutoGravity
App
Brian Pascus/Business
Insider

Some have
suggested that AutoGravity could do for car-buying what the
website Expedia did for travel; that is, completely remove the
middleman and put the power of the transaction right in the hands
of online consumers. 

Through their app, Bonfiay said
AutoGravity seeks to, “help you get a virtual
handshake.”

According to AutoGravity it has more than 2,200 dealership
partners nationwide (that includes AutoNation and Fletcher Jones
Auto Group). It also has lending partnerships with banks
including U.S. Bank, TD Bank, and Santander. So far, more than
three million users have purchased or leased their car using
AutoGravity’s platform, the company said. 

Mike Ramsey, an automotive analyst and senior research director
at Gartner, told Business Insider that AutoGravity is appealing
to users because it helps address one of the worst parts of
buying a car.  

“The thing people hate the most is getting in the dealership and
losing control of the negotiation,” Ramsey said. “I think that as
more online platforms to sell vehicles come along, and as car
companies look to digital as a way to sell vehicles, anything
like this is likely to pick up speed.”

AutoGravity has big auto names backing it

AutoGravity’s two co-owners are Daimler and Volkswagen
Credit, who have each provided capital and opened doors into the
auto industry for the company. AutoGravity’s technology now
powers white-label financing platforms like the Volkswagen Credit app, Kia Motors financing
app, and Audi Financial Services. 

The company initially emerged as
an arm of Daimler and still has deep connections to the company:
Benedikt Schell, chief experience officer at Daimler Financial
Services AG,
is chairman of AutoGravity’s board of directors; CEO Mallmann
had worked at Mercedes-Benz in a variety of auto-finance
capacities since
1998.

A
look at the AutoGravity headquarters in Irvine,
California.
AutoGravity

“The potential for AutoGravity’s
growth is immense. We have very strong shareholders who believe
in what we are trying to do along with a talented pool of
employees dedicated to delivering a transparent car-shopping
experience with no surprises,” Alex Mallmann, AutoGravity’s
CEO, told Business Insider.

The company says it started with
only five employees in January 2016, but today has more than 130
professionals ranging across fields like product engineers,
technical operations, legal, and lender partner sales
division. 

Bonifay didn’t discuss the valuation of AutoGravity, but
said the company raised $80 million in capital investments to
date from Series B and Seed Round funding. When asked if they
plan to go public, Bonifay had no comment. 

One secret to the app’s growing
appeal is it never charges the consumer buying the car. Instead,
AutoGravity makes money one of two ways: either from lender
attribution fees, paid per funded loan; or by charging dealers a
subscription fee for the transactable deals the company sends
them. These fees range based on the value the app drives to each
dealership.

In return for the fee, lenders
are brought more clients and car manufacturers are provided
with a digital partner. Dealers who join AutoGravity’s network
gain an avenue to “sell cars more profitably,” according to
Bonifay.