Rod Buscher, CEO, Blinker
After decades in the brick-and-mortar world as an auto dealer, Rod Buscher's career took a seemingly unexpected turn.
He wanted to create a platform through which private sellers could sell a car for a lump sum or a monthly installment safely and securely, without having to interact with a bank or dealership.
"I knew that there's two things customers don't like when they come to a dealership: They don't like how much they get for their trade, and they don't like the finance experience," Buscher said. "For those people who don't want to come to a dealership, I wanted to be able to empower those private sellers to have the same tools that a dealer has."
Buscher bought his first dealership, a Jeep store, in 1987. He knew he wanted to buy another dealership, but he lacked the money.
That's when an acquaintance introduced him to Patrick Bowlen, owner of the NFL's Denver Broncos, who later folded then-Broncos quarterback John Elway into the plan.
In 1989, the three became partners in the Jeep store.
After buying a Mazda store in 1990, Elway and Buscher bought three more dealerships a year later in a deal that ultimately allowed them to buy out Bowlen.
At the time, the deal was the largest automotive acquisition in Colorado history, Automotive News reported in 1991.
For the next seven years, Elway and Buscher ran the dealerships together, until they decided to sell the group to AutoNation in 1998.
The group retained Elway's name for the next five years. It was renamed GoAuto in 2003.
Buscher helped launch a separate dealership group, Summit Automotive Partners, in 2007. He sold his interest to his partner in 2012.
Blinker's birth
The following year, Blinker Inc. was born.
"I'm not a technology person so I had to make sure that I could find quality management that understood technology, understood lending and all the compliance issues to make this work," Buscher said. "The idea was there, but we had to put all the pieces together."
The result was Blinker — a mobile app for customers looking to buy, sell or refinance used vehicles without visiting a dealership. The app launched in 2016.
"Throughout my whole career I've always been thinking about how to be more transparent and more customer friendly, and this was just really an extension of that," Buscher said.
Still, Buscher said Blinker is not anti-dealer — it's "pro-consumer and pro-transparency," he said.
"We actually have a plan to help the customer and the dealer relationship where they can do everything over the phone, like we do privately" to reduce customers' time in the finance office, Buscher said.
Although the app is available for download nationwide, buying and selling through the app is permitted only in Colorado, Texas, California and Florida.
The company chose those states for "efficiency," Buscher said. Together, those states account for 30 percent of total U.S. new-vehicle registrations, according to data from the National Automobile Dealers Association.
Buscher said the company is finalizing an agreement with Ally that would allow it to purchase Blinker's finance contracts.
"That'll allow us to expand more quickly throughout the country, because they've got a 50-state lending license," Buscher said.
It starts with a photo.
With the app's image recognition technology, users can stand six feet behind a car and snap a photo to receive details such as the year, make, model, approximate mileage, estimated value and most of the equipment on the vehicle.
After taking a photo of the car, users must upload a photo of their driver's license, which authorizes Blinker to do a soft credit pull to preapprove the user for financing.
Blinker also performs a fraud check to ensure the car has never been stolen and that it does not have a branded title.
"If you buy a car off Craigslist, typically the seller has to take the car to the bank or the credit union of the buyer so they can see the collateral," Buscher said.
"It's a difficult transaction. There's no verifications of the people or the car, so I wanted to bring all [of] that into one app."
Once the user comes up with a price — with the help of Blinker's pricing guidelines — the vehicle can be listed on the Blinker marketplace. "We push it out at no charge to other marketplaces like Craigslist, CarGurus, Autotrader, Cars.com, several of those places that we have relationships with," Buscher said. "Frankly, Blinker isn't well-known enough yet to drive a lot of traffic so the whole important thing for us is that we present your car to give it the best chance for it to sell."
When the seller decides on a price, Blinker immediately converts it into a monthly payment.
If a buyer chooses to pay in monthly installments, the seller still receives the payment in full through the platform's finance entity, Blinker Direct. Based on historical sales data and Black Book, Buscher said on a $14,000 car, sellers on average can make $2,900 more than if they were to trade it in at a dealership, while buyers are saving around $2,200.
Fees for loans
If a buyer opts for a loan, the company receives a fixed fee that amounts to about 2 percent on the loan value, Buscher said, but if the buyer doesn't need a loan, the transaction is free.
"We'll make some money on the loan, we'll make money on the service contract, even though we'll sell our service contracts for 30 percent less than I would've at the dealership," Buscher said.
Blinker also generates money through guaranteed asset protection, Buscher said, and the company r ecently signed a contract to sell car insurance through online insurance comparison agency CoverHound.
In February, Blinker joined forces with Ally to add the lender's vehicle protection coverage to the app, including Ally Guaranteed Asset Protection and Ally Premier Protection vehicle service contracts.
"We don't own any cars, we don't own any real estate, no trucks," Buscher said. "We're a fee-based company."
Refinancing also makes up half of Blinker's business, and down the road the company also hopes to sell parts and recommend service centers, Buscher said.
"The whole vision of Blinker is to have one app on your phone that handles everything in your automotive world."