Novel App Links Car Shoppers With Lenders, Dealers

AutoGravity says its digital platform is revolutionary and will forever change how consumers buy, finance and lease vehicles.

But the startup tech firm’s leaders emphasize they’re collaborating with dealers and lenders, not looking to bypass them, as some recent third-party digital ventures seemingly try to do, despite their claims to the contrary.

“We didn’t build this at the expense of dealers and lenders,” Serge Varanov, AutoGravity’s chief marketing officer, tells WardsAuto. “We are saying they play an important role. We don’t want to cut them out. We’re innovators, not disrupters.”

He adds: “To truly empower car buyers with access to every possible vehicle, dealer and finance choice, the AutoGravity platform must be an attractive place for lenders and dealers to do business.”

Translation: You want those two groups on your side.  Otherwise, expect big-time push back. 

Varanov and his colleagues based in Irvine, CA, say they are on a mission to transform car financing by harnessing the power of the smartphone with a first-of-its-kind app.

With little but organic marketing at this point, AutoGravity in the U.S. has surpassed 200,000 downloads of its native iOS and Android smartphone apps. About half its users are Millennials.

The platform allows car shoppers in 46 states to obtain up to four finance offers on any make, model and trim of new or used vehicle.

For smartphone users, it’s a 4-step process:

First they pick a vehicle.

Then they select any dealership from AutoGravity’s proprietary national database. The platform shows the closest dealers selling the vehicle.

Next they search for financing for the selected car. They can dial financing terms such as loan length up and down and can scan their driver’s license to pre-fill a finance application.

Then they receive up to four finance offers within minutes. They select what suits them best, and head to the dealership to complete the purchase.

“It bakes in dealer reserve,” Varanov says, referring to the practice of a percentage point added to a loan’s “buy rate” as compensation for the dealer acting as a middleman on retail financing through the dealership.

"We're not disrupters," Varanov says.

Responding to a suggestion that dealers don’t seem to do much to earn dealer reserve through AutoGravity’s setup, Varanov says, “They do a lot, and they still have to sell the car.” They also can sell F&I products once the consumer visits the store.

When a deal is booked, participating lenders compensate AutoGravity. So do participating dealers who also get a website overlay. A dealership need not partner with AutoGravity for it to appear on the app as a place that has a vehicle a customer expresses an interest in.

AutoGravity has partnerships with leading banks, car companies’ captive financing units and major dealership groups.

“AutoGravity has brought car finance into the digital age,” says Andy Hinrichs, the firm’s founder and CEO. His automotive-financing career includes a stint as vice president-marketing for Mercedes-Benz Financial Services USA.

Many lenders, especially ones representing major financial institutions, admit they’re conservative by nature.

Accordingly, it took a while for AutoGravity to recruit big lenders, less time for smaller ones. “Lenders can move slowly, but once you gain their trust, they’re very loyal,” Varanov says, adding, “We’ve spent more than a year integrating lenders and dealers into the platform.”

The firm soon will step up marketing efforts, which so far have been relatively modest. “Daimler Financial has invested in us, and they expect us to market ourselves,” Varanov says. “For now, we’re trying to ride out the organic wave.”

App brings car financing into digital age, Hinrichs says.

Judging from the education part of their resumes, AutoGravity’s leadership team members were at the head of their class.

For instance, Varanov and Chief Financial Officer Lukas Wickart both hold MBAs from Harvard Business School. Varanov also holds undergraduate degrees in business administration and Japanese from the University of California – Berkley.

Chief Technology Officer Martin Prescher has a PhD in machine learning and a master’s degree in astrophysics from German universities.

The firm had four people when it was founded in October of 2015 with an initial $50 million in seed money. Today, it has 60.   

“Now, we’re ready for customers across the country to start shopping and financing, making AutoGravity a game-changer in the auto-finance industry,” Varanov says.

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