Vroom is a car dealership that purchases and sells vehicles completely online. Cars are delivered directly to the customer’s doorstep.
The company, which is headquartered in New York City, was founded in 2013 by Kevin Westfall, Marshall Chesrown, and Scott Chesrown.
As a result, both buyers and sellers interacting with Vroom can skip the process of actually visiting a dealership in person.
If you decide to sell your car, you simply add key information such as the license plate or VIN, mileage, and condition. Sellers are then given an instant price that is valid for seven days (or 250 additional miles). If you accept, Vroom picks up the car directly from your home.
Those same cars are then being made available for purchase on Vroom’s platform (after proper inspections and overhauls). Consequently, after either paying in cash or applying for financing, the vehicle is being delivered to the buyer’s doorstep. It can then be tested for seven days or 250 miles.
On top of that, Vroom provides customers with a 90-day limited warranty (to cover unexpected costs) and one-year roadside assistance. Additional coverage is available via VroomProtect.
However, it hasn’t always been smooth sailing for the firm. In March 2018, it had to lay off 30 percent of its workforce and shut down its dealership in Dallas. For now, the firm only operates one in Houston, Texas.
Additionally, Vroom went through various leadership changes throughout its existence. Founder and CEO Westfall was already replaced in 2014. In May 2022, long-time CEO Paul Hennessy stepped down from his role as part of a business realignment plan.
Vroom, in spite of those setbacks, has managed to grow into one of the biggest car dealerships in the nation. In 2021, the firm sold close to 75,000 cars and generated $2.4 billion in revenue (up 167 percent from the year prior). It, furthermore, made a profit of $164.7 million.
Close to 2,000 people are employed by Vroom, which has sold over 2.2 million cars since it has been founded in 2013. Vroom had previously raised $1.3 billion in venture funding and another $537 million when it went public in June 2020.
The methodology with which competitors of Vroom are ranked is based on a variety of data points. Information such as revenue, visitor numbers, cars sold, dealer partnerships, and anything else in between will be considered.
In order to ensure comparability, we only look at competitors that are either car listing sites or purchase send sell vehicles themselves.
As a result, physical car dealerships that mostly operate offline will be excluded. Additionally, car manufacturers and rental companies that sell directly to consumers will not be taken into account either.
Lastly, since Vroom solely operates in the United States, only competitors from that country will be considered.
It has to be noted that this analysis should not be seen as a purchase recommendation. It is merely a summary of the competition that Vroom faces as of today.
So, without further ado, let’s take a closer look at the top 15 competitors of Vroom.
1. Carvana
Headquarters: Tempe, Arizona Founder(s): Ernie Garcia III, Ryan Keeton Year Founded: 2013
Carvana was spun out of DriveTime, one of the nation’s largest car retailers that is helmed by Ernest Garcia II, the father of Ernie Garcia III. In those early days, DriveTime actually purchased the vehicles on behalf of Carvana, which became its own, separate company in 2014.
Carvana has since made a name for itself by not only offering customers similar convenience to Vroom but also due to its shiny car vending machines. The 33 vending machines that are currently in operation are often placed in strategic locations such as highway intersections.
Customers who decide to pick up their purchased car from said vending machines will be given an oversized coin (similar to a traditional vending machine), which then picks up the car they previously ordered.
The Apple-like presentation of its available cars has certainly struck a chord with customers. In 2021, Carvana sold more than 425,000 cars via its platform. This translated to $12.8 billion in revenue for the year.
Carvana already went public back in April 2017, which provided the firm with $225 million in proceeds. Previously, Carvana had raised $1.6 billion during its life as a startup. Over 7,000 people are currently employed by the company.
Source: Carvana, Crunchbase
2. CarMax
Headquarters: Richmond, Virginia Founder(s): Austin Ligon, Mark F. O'Neil, Martin Mindling, Richard Sharp Year Founded: 1993
CarMax was created by employees from electronics chain Circuit City, which funded the initial launch of its first physical store called CarMax: The Auto Superstore. The physical outlet would display over 500 different used car models, which all had a fixed and non-negotiable price attached to them.
The superstore was, furthermore, accompanied by tons of computer-aided information that helped prospective buyers. This, in turn, removed the need for hiring dozens of salespeople and created a less adversarial atmosphere.
In the first few years, those stores were operating at a relatively heavy loss. However, once CarMax reached a sufficient size, scale economies kicked in and allowed it to soon turn a profit. In 1996, the firm purchased its first-ever new car franchise, a Chrysler-Plymouth-Jeep store situated in Atlanta, Georgia.
Almost a decade after its founding, CarMax finally spun off from Circuit City and became a publicly-traded company not long after (2002). Today, CarMax operates 235 stores across the nation that are managed by the 25,000+ associates it employs.
Thus far, the platform has sold over 9 million cars and appraised another 33 million. In 2021, CarMax generated $31.9 billion in revenue and sold over 343,000 cars. CarMax claims to have the nation’s largest inventory of used cars. In fact, its share of the nationwide age 0–10-year-old used vehicle market is equal to four percent as of today.
Source: CarMax, Investor Relations
3. AutoNation
Headquarters: Fort Lauderdale, Florida Founder(s): Wayne Huizenga Year Founded: 1996
AutoNation is one of America’s biggest automotive retailers with over 300 locations nationwide. Those physical dealerships not only offer cars for sale but also handle repairs and other types of maintenance tasks. Its service team repairs more than 4.3 million vehicles each year.
Founder Wayne Huizenga had been responsible for the creation of some of America’s most successful franchises before starting AutoNation. More precisely, he co-founded both Blockbuster Video as well as Waste Management.
He had launched AutoNation all while purchasing another company dubbed National Car Rental for $600 million in stock. The two companies eventually merged and were rebranded as AutoNation in 1998.
A year later, in 1999, it launched its first website dubbed AutoNationDirect.com alongside hundreds of dedicated sites for each dealership it operated. Today, AutoNation operates a diverse set of businesses that include new and used car sales, financing, express buying, and more.
Over 50 percent of the firm’s revenue, which totaled $25.8 billion in 2021, is generated via its website. Close to 30,000 people are now employed by the company.
Source: AutoNation
4. CarGurus
Headquarters: Cambridge, Massachusetts Founder(s): Langley Steinert Year Founded: 2006
CarGurus claims to be the leading vehicle listing site in the United States, boasting over 38 million monthly unique visitors. Apart from purchasing or listing a car, users can also get prequalified to find out what models they can afford.
The firm actually started out as a review site on which users could rate various car models and dealerships. This isn’t particularly surprising given that co-founder and long-time CEO Langley Steinert also co-founded travel review site TripAdvisor.
What is surprising is the fact that Steinert has managed to grow the business despite having raised less than $2 million in venture funding. In October 2017, he took the firm public, adding $150 million to its balance sheet.
CarGurus has since expanded to launch dedicated sites in Canada and the United Kingdom. With over five million listings and 30,000 paying dealers, it is certainly a force to be reckoned with. CarGurus, furthermore, generated $951.4 million in revenue for 2021.
Source: CarGurus, Crunchbase
5. Shift
Headquarters: San Francisco, California Founder(s): Christian Ohler, George Arison, Joel Washington, Minnie Ingersoll, Morgan Knutson Year Founded: 2013
Shift, much like Carvana and Vroom, directly purchases and sells vehicles to customers across the United States. Its technicians have a checklist of 150 items to cross off before a sale is approved, ensuring that the vehicle is in a proper condition. That also means that Shift, after taking your car, has 48 hours to reject it if it finds any value-altering issues.
And just like those other platforms, Shift gives customers seven days (or 200 miles) to test drive any vehicle they order.
Many of Shift’s founders had previously started Taxi Magic (now known as Curb), the first on-demand mobile transportation booking technology platform. Co-founder and co-CEO Arison had the idea to start Shift after banks told him to go to a dealership to get a loan for a car he was trying to buy.
The founders have used their reputation and over $500 million in funding to get the company off the ground. In June 2020, Shift went public on the Nasdaq stock exchange by merging with a special purpose acquisition company (SPAC) called Insurance Acquisition Corporation. The firm generated $637 million in revenue during the fiscal year 2021.
Source: Crunchbase, Shift
6. Autotrader
Headquarters: Atlanta, Georgia Founder(s): Chip Perry, David Lilly Year Founded: 1998
Autotrader is one of the pioneers in the new and used vehicle segment. In 1999, a year after the classifieds site launched, it already managed to attract over 1.2 million users to its website each month.
Interestingly, Autotrader also offers instant cash offers for sellers. In December 2015, it launched the feature in cooperation with Kelley Blue Book (KBB). The two firms go back all the way to Autotrader’s launch when the car value estimates on its site were powered by KBB. With regards to the cash offers, these are provided by car dealerships that partner with Autotrader and KBB.
Autotrader itself was acquired by media holding company Cox Enterprises back in January 2014. Two years later, Autotrader even managed to expand into Australia but later (2020) sold the business to eBay.
Its U.S. website currently lists over three million new and used vehicles from 250,000 individuals and 40,000 dealerships. Autotrader’s website is accessed by more than 14 million unique visitors every month.
Source: Autotrader, ConsumerAffairs
7. TrueCar
Headquarters: Santa Monica, California Founder(s): Bernie Brenner, Jim Nguyen, Oded Noy, Scott Painter, Tom Taira Year Founded: 2005
TrueCar partners with dealerships to provide consumers with car prices without any form of negotiation. The platform works together with 13,000+ certified dealers across the United States (equal to 35 percent of all franchised dealers).
When selling one’s vehicle, TrueCar is providing the seller with an estimate that is based on the car’s information (such as brand, model, age, mileage, and so forth). Sellers can add additional value-altering characteristics such as the vehicle’s color or equipment.
Similarly, buyers can immediately purchase a car through the platform. However, it has to be noted that this offer isn’t always binding. Sometimes, a vehicle may be sold even though the two parties (buyer and dealer) had previously come to an agreement on TrueCar.
Its Price Report, furthermore, enables buyers to see what others have paid for similar vehicles in their area. TrueCar also purchases cars on behalf of more than 250 leading brands including American Express, Sam’s Club, and others.
The firm went public in May 2014 after previously raising $340 million in venture funding. In 2021, TrueCar, which has over 8.5 million unique monthly visitors, generated $231 million in revenue. 608,000 vehicles were sold via its platform that year.
TrueCar, in comparison to Carvana and Vroom, is more like a marketplace that connects car buyers and sellers (dealers). The company itself does not purchase cars, which significantly reduces operational cost and thus risk.
Source: Crunchbase, TrueCar
8. Cars.com
Headquarters: Chicago, Illinois Founder(s): Alex Vetter, Mitch Golub, William Swislow Year Founded: 1998
With 25 million monthly visitors, Cars.com is one of the biggest classifieds sites in the automotive segment. The firm now owns and runs a multitude of other brands including Auto.com, NewCars.com, and Pickuptrucks.com, among others.
Cars.com has gone through a variety of ownership changes throughout its history. In August 2014, media company Gannett acquired a controlling stake in the business for $2.5 billion. Three years later, Cars.com spun off from its parent company and began trading on the New York Stock Exchange.
Today, Cars.com, which is still being led by founder and CEO Alex Vetter, works together with close to 20,000 dealerships across the nation while employing over 2,000 people.
Those employees, among other tasks, are busy creating extensive reviews on almost any newly released car model, publishing news articles, or creating repair tutorials. In fact, Cars.com has one of the biggest editorial teams in the industry.
In 2021, the firm generated $623.7 million in revenue, up 14 percent from the year prior. Profit was equal to $7.7 million.
Source: Cars.com
9. CarsDirect
Headquarters: El Segundo, California Founder(s): Scott Painter Year Founded: 1998
CarsDirect.com became the first car listing site to sell vehicles online directly to consumers. Traditionally, listing sites and classified ads would only refer buyers to other dealerships. In exchange, they collect a fee (charged to the seller) for posting a listing.
The firm raised close to $300 million in funding during its heyday. However, due to the bursting of the tech bubble, it had to scrap plans to go public back in December 2000.
Five years later, CarsDirect’s parent company rebranded into Internet Brands, which now operates sites in a variety of segments such as automotive, healthcare, legal, and more. In the automotive sector, it owns sites such as MBWorld, AudiWorld, Club Lexus, and a few more.
Today, CarsDirect is primarily known for its extensive reviews of almost every model listed via its website. CarsDirect has, furthermore, developed a tool that allows interested buyers to compare the price and other characteristics of multiple vehicles.
Internet Brands and its associated websites were ultimately sold to private equity firm KKR for $1.1 billion back in June 2014. In recent times, KKR has contemplated selling the holding company again but hasn’t found a suitable buyer yet.
Source: Crunchbase, Internet Brands, Los Angeles Times
10. Kelley Blue Book
Headquarters: Los Angeles, California Founder(s): Leslie Kelley Year Founded: 1918
Kelley Blue Book started out as a car dealership in Los Angeles where its founder, Leslie Kelley, began selling Ford’s Model T. The dealership made a name for itself by becoming one of the first ones to sell colored vehicles (pink, in fact).
In 1926, eight years after the firm’s founding, Kelley published the company’s first Blue Book. The book, which eventually grew into a series and now includes a price evaluation tool that is accessed millions of times every month, propelled the firm into one of the most trusted sources in the automotive industry.
The KBB metric became so powerful that banks and dealers would repeatedly use it to value their cars. It was even utilized by the U.S. government during WWII to combat rising prices of used cars, which were in shortage as a result of the war.
By the 1960s, KBB finally pivoted the business from a car dealership towards solely being a publisher. The advent of the internet, furthermore, prompted the firm to launch its first website in 1995. Two years later, KBB already managed to become the world’s most popular automotive website.
Today, the firm claims that 84 percent of all used vehicle shoppers use its estimate to evaluate a car’s worth. Additionally, its value estimates are used in over 100 countries across the globe (KBB itself operates dedicated sites in Brazil, Canada, as well as the United States).
Its continuous relevance prompted Autotrader to purchase the company, which currently employs over 400 people, in 2010. The purchase price was unfortunately not disclosed. More than 12 million unique users visit its website every month.
Source: KBB.com
11. eBay Motors
Headquarters: San Jose, California Founder(s): Simon Rothman Year Founded: 2000
On eBay Motors users can sell and purchase cars as well as parts for fixing, updating, or maintaining one’s vehicle. Within six years of launching, eBay Motors had already managed to facilitate two million vehicle sales.
That same year, eBay rolled out its buyer protection, which made shopping for vehicles substantially more secure. Previously, many buyers had suffered from fraud, which involved cars not being delivered or having unmentioned damages.
Its app also includes a section called My Garage on which users can include the specs of any given vehicle and find parts associated with that model.
Close to 7.5 million unique visitors access eBay Motors’ app and website every month. A total of 18,000 car listings (excluding parts) are active at any given time.
Source: eBay, eBay Selling Center
12. Autolist
Headquarters: San Francisco, California Founder(s): Corey Lydstone, John Kobs Year Founded: 2011
Over five million cars are listed on Autolist’s platform, making it one of the biggest databases of vehicles in the United States. It is able to gather that data by scraping the web and retrieving listings from hundreds of other platforms (many of whom are on this list).
The platform’s integration with Carfax enables users to check a vehicle’s ownership history. Additionally, Autolist is able to determine whether a given vehicle is listed for below, above, or right around its market price.
Its Listimate tool, furthermore, compares the price of one’s vehicle to similar listings across the market.
Autolist, after nine years in business, was acquired by CarGurus for an undisclosed amount in January 2020. Its mobile apps have been downloaded more than seven million times.
Source: Autolist
13. Edmunds
Headquarters: Santa Monica, California Founder(s): Ludwig Arons Year Founded: 1966
Edmunds was launched in the 1960s as a publisher of printed booklets that contained information on various vehicles. After 25 years in business, it embarked on the digital route by issuing CDs (while also releasing physical books such as Edmunds New Cars & Trucks Buyer’s Guide).
In June 1999, the firm officially rebranded into Edmunds (it was previously known as Edmunds Publications) while simultaneously unveiling its first-ever website. A year later, Edmunds released its True Market Value (TMV) estimate (similar to KBB’s metric), which depicts the current worth of a car. Millions of users flocked to its website as a result of that.
To this date, Edmunds continues to extensively review cars of all types. In fact, over 300 cars are analyzed by its editorial team every year. Reviewers drive more than half a million miles to test those cars.
Decades later, in April 2021, CarMax announced that it acquired the company for $404 million after it previously invested $50 million in exchange for a minority stake. The year prior, in 2020, Edmunds generated $140 million in revenue. CarMax does not disclose current revenue numbers.
14. Facebook Marketplace
Headquarters: Menlo Park, California Founder(s): Facebook Year Founded: 2016
In 2016, Facebook, which now calls itself Meta, introduced its Marketplace product, enabling everyone to purchase and sell a variety of different goods and services. Just like eBay, its classifieds section also includes vehicles as well as car parts.
Within five years of the launch (April 2021), Facebook’s Marketplace managed to reach its one-billionth user. There are, furthermore, one million+ registered shops on the platform. Given that the core Facebook platform has close to three billion users, this is certainly no surprise.
Consequently, Facebook works together with car dealerships via its Marketplace for Business offering, which is available in selected countries such as the United States, France, Germany, and Indonesia. Facebook claims that over one million people click on a vehicle listing every month.
However, the firm also had some issues with dealerships in the past. For example, in 2021, it removed bulk uploads as a feature, forcing business owners to upload their listings one by one. Facebook reasoned that this would create a higher quality of cars on its marketplace.
15. Cars & Bids
Headquarters: San Diego, California Founder(s): Blake Machado, Doug DeMuro Year Founded: 2020
Cars & Bids is an online vehicle auctioning site started by YouTube influencer Doug DeMuro. DeMuro himself has over four million followers on the video platform, which he cleverly leveraged to launch the site.
He, in order to get the site off the ground, partnered with Blake Machado whose software agency was behind the development of Cars & Bids.
The platform works just like any other auctioning site in that the highest bidder gets to keep the car. DeMuro certainly walks the walk when it comes to his site. The first car auctioned off via the platform was his 2012 Mercedes-Benz E 63 AMG Wagon. He continues to engage in various auctions and even offers some of his other cars for sale.
Cars & Bids claims it has completed over 7,000 auctions since it has been started in 2020. Those auctioned cars have a combined worth of $130+ million. Lastly, 240,000 members are currently registered on the platform.
Given the founder’s reach, it certainly wouldn’t be surprising if Cars & Bids continues to grow at the rapid pace it has.
Source: Cars & Bids, Doug DeMuro
