Despite Americans’ love affair with cars, many rank car buying right up there with getting a root canal as one of their least favorite things to do.
Seattle startup Tred aims to ease the pain by bringing cars to customers’ homes or offices for test drives, possibly saving them time and money.
Tred, whose backers include former General Motors Chairman and Chief Executive Rick Wagoner, makes its debut Wednesday after several months of local testing.
Shoppers begin by browsing Tred’s website for new cars from the likes of Audi, Chevrolet, Ford, Honda, Lexus, Subaru and Toyota.
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Shoppers select one or two cars they want to test drive at a time and place of their choosing, and Tred employees show up with their picks for a 15-mile spin in each.
Tred then presents what it calls the dealer’s lowest price possible, but there’s no obligation to buy, and purchases are made at the dealership, not Tred. Instead, Tred makes its money by charging dealers and shoppers a fee per test drive. (Shoppers pay $19, and the dealer fee is undisclosed.)
Thilo Koslowski, lead automotive-industry analyst at Gartner, said Tred is catering to tech-savvy customers who’d like to try out a car before stepping foot in a showroom, while also giving dealers a new way to reach them. But whether Tred can “scale up” to fully meet that demand remains to be seen, he said.
“The devil lies in the details. If more and more consumers want to use this service, the company has to make sure it has enough cars on hand,” said Koslowski, who knows of no direct competitors to Tred. “People aren’t going to want to schedule test drives weeks in advance.”
A 2011 survey by Kelly Blue Book found that 56 percent of consumers definitely would schedule a test drive if a car could be delivered to them. What’s more, 70 percent preferred to test-drive a car alone or with someone other than a car dealer.
Tred founder and Chief Executive Grant Feek said Tred is available only in King County, and only for new cars, but it could expand to other areas and product categories, such as boats and RVs.
Working with more than 20 local dealerships, Tred employs several so-called auto experts to deliver cars and accompany shoppers on test drives. The employees are college-educated, with clean driving records and some industry experience, Feek said.
“They’re very good at presenting cars in an informative way, not a sales-y way,” he said, noting that bonuses hinge on positive customer reviews. “They don’t make any more or less money if they sell a car.”
Feek, 32, grew up in Seattle and spent summers working at the local BMW dealership.
He earned a bachelor’s in business from the University of Southern California and a Harvard MBA, then worked for private-equity firms in Los Angeles and New York before striking out on his own last year to create Tred.
He secured $1.7 million in January from automotive-investment firm Fraser McCombs Capital, as well as Seattle venture-capital firm Maveron and Wagoner, among others.
“We’re looking for businesses that can solve acute consumer pain points, and there’s no more acute pain point than going into a dealer and buying a car,” said Maveron partner Jason Stoffer.
While Tred is “operationally difficult to scale,” he said, “it can be a game changer in terms of how people buy a car.”
Erik Paulson, general manager at Michael’s Toyota of Bellevue, said he’s all for making test drives more convenient for customers. His only concern, he said, is that Tred employees remain impartial. Or as he put it, “The only fear you’d have is what vehicle does that employee from Tred drive? “
Paulson said the dealership sold a Toyota Rav4 this past spring after a Tred test drive. “Yes, we might lose some control,” he said. “But we might have never gotten that business because it wasn’t convenient for that person to come in for a visit.”
Patty Foley, 44, of Seattle, recently bought a new Subaru XV Crosstrek for about $24,000 after using Tred to set up a test drive through her Georgetown neighborhood.
She had been invited to try out Tred as part of the company’s test phase, and although her 15-year-old Saturn sedan had been “running fine,” she figured, “Why not?“
“I didn’t think I was at a point where I wanted to buy a car,” she said. “But after I test-drove a couple of cars, I was ready. It was fun to be in a new car!”
Amy Martinez: 206-464-2923 or email@example.com. On Twitter: @amyemartinez