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Local fintechs shift gears to service online car sales

Vancouver technology companies believe COVID-19 is transforming consumer habits
A car is loaded for delivery in the lot of online car dealership Canada Drives | Chung Chow

Like a driver following a route on a road map, Cody Green always had a destination in mind for his financial technology firm.

The pandemic just pushed the founder and co-CEO of Canada Drives Ltd. to hit the accelerator sooner than expected.

The Vancouver fintech founded in 2010 is best known for its online platform that helps secure financing for vehicles.

Late last year it shifted lanes and began offering B.C. customers the option of buying used cars through its platform.

“E-commerce and online shopping has been fast-forwarded multiple years, and I think vehicles are definitely a big part of that,” said Green, whose company offers a one-week return policy on vehicles it sources from private buyers, reconditions and stores on a lot in Richmond.

There’s no room for any haggling on the platform, but once purchased, Canada Drives delivers the vehicle in a trailer within a day of sale.

While a test drive seems like a must for a large purchase, COVID-19 has been keeping British Columbians at home amid restrictions and health concerns.

“A lot of people have in their head that a test drive needs to happen or [they] need to go in person. But as long as you’re pairing our service with a guarantee that if you don’t like that vehicle [then] you can return it, I think it’s satisfying,” Green said. “Getting a 15-minute test drive with the salesperson isn’t going to tell you as much as spending a week with a vehicle.”

The co-CEO said he’s been learning a lot about British Columbians’ buying habits since the soft launch last fall, such as demand for certain vehicles exceeding expectations based on the region. He noted that physical dealerships might not be flush with BMW sports utility vehicles in Prince George, but Canada Drives has been able to deliver them to drivers in about a day.

Canada Drives is not the only Vancouver tech firm tapping into the growing market for online car sales.

Autozen Technology Ltd. revealed in January the close of a $4.2 million funding round ahead of launching a new online marketplace for vehicles later this month.

“Trading is relatively easy but you’ve got to buy a new car and you don’t always get the best price when you trade it in because there’s no competition,” CEO Olivier Vincent said. “You get only one offer.”

Users looking to sell can plug in the make, model and year of their vehicle and Autozen will respond with a range of prices for how much the automobile will likely fetch.

The platform is free for consumers, while Autozen charges a commission to dealers for every vehicle sold.

Potential buyers can compete against each other before Autozen delivers a firm offer to the seller.

If the seller accepts the offer, Autozen will pick up the car in about a day, and payment is deposited into the seller’s bank account.

“The automobile industry is pretty low tech. You can see the quality of the online sites that are there,” said Vincent, the former CEO of Canpages Inc., adding that he does not believe there is another comparable marketplace out there.

He also thinks COVID-19 has increased the need for the industry to go digital as more people stay home.

Green said Canada Drives rolled out its new service in about six months, and he expects to expand beyond B.C. shortly to service about 80% of Canadians by the end of 2021.

The Autozen marketplace is initially being offered to Metro Vancouver buyers and sellers, but the company will eventually expand throughout Canada.

“To build a marketplace is not trivial,” Vincent said. “Not only the technology but also the marketing and commercial efforts to get it going. It does take several million dollars to do that properly.” •