• Company transforms repair garages into seller leads
  • Both garages and CarAmigo earn commission on sale
  • Active in Belgium, with European expansion likely

Can repairs and retail be combined to deliver a more effective shopping experience in used cars? That’s the idea behind CarAmigo, a newly launched project in Belgium that hopes to use repair garages as agents for car sales.

Launched in March, the service (not to be confused with Carmigo.io, a wholesale car retailer in the U.S.) is modelled on the real estate agent business — CarAmigo allows garages to act as intermediaries between the seller and the buyer, with the “agent” receiving a commission on each sale.

From repairs to retail

Genuinely innovative retailing models are hard to come by in the automotive sector, but Alex Gaschard may have created the world’s first retailing toolkit aimed specifically at repair garages. An automotive entrepreneur, Gaschard founded one of Belgium’s first peer-to-peer car rental services, Sharonomy, and is now looking to disrupt the used car business.

“Our primary aim is to become a partner for garages wishing to set up a structured used car sales business,” Gaschard told the AIM Group.

Here’s how it works:

  • A repair garage signs up for the service on the CarAmigo app. Customers repairing their vehicles at the garage are offered to sell their car, with the garage becoming an intermediary between the seller and the buyer. Private individuals living close to the garage and wishing to sell their car are also obvious targets.
  • The garage will carry out a quality inspection covering around 40 checkpoints, in addition to the mandatory checkpoints required to sell any used car in Belgium (around 152 checkpoints). If the car passes the inspection, it will be issued with a six-month, post-sale warranty by European warranty provider Real Garant. The proposed sales price will be automatically generated, although the seller has the option to negotiate.
  • The garage takes photos of the car and CarAmigo automatically lists the vehicle on local auto marketplaces — the horizontal 2EmeMain.be / 2DeHands.be and GoCar.be in Belgium (not AutoScout24.be, the No. 1 auto vertical, due to its higher listing fees).
  • When a sale is agreed, money is held in an escrow account until the buyer collects the car from the repair shop. The release of funds then triggers payment to the seller, the commission to the repair shop, and the warranty premium to Real Garant.
  • The fee charged by the garage is around €800 per vehicle and includes warranty. CarAmigo retains €100 from that total as commission. As a bonus, the buyer receives a €50 voucher to use at the garage.

What’s in it for the garages? “Selling used cars normally implies having a large parking lot or showroom, being financially sound enough to buy cars before reselling them, and all the administrative management of this stock,” Gaschard told us. “With CarAmigo, everything comes together in one easy-to-use app.”

Garages don’t need to finance stock, invest in IT, pay franchise fees, or possess parking and showroom spaces since the car stays at the sellers’ location until the transaction is finalized. The company handles most of the retailing logistics and the sales processes. Documentation is digitized, so the physical paperwork trail is minimal.

A unique concept globally?

With garages typically seeing large volumes of used vehicles, they’re potentially highly effective retailing hotspots. And with the surge in electric vehicles (EVs) downsizing the repairs business (since EVs have fewer moving parts), the additional revenue is likely to be welcomed by the garages.

The concept of repair garages selling and buying vehicles is not new, but CarAmigo’s idea of creating digital retailing toolkits for garages is novel. We couldn’t find any similar services globally, and Gaschard believes it’s the first of its kind in the world.

Eventually, garages will probably fluctuate their fee based on the vehicle sale price, but Gaschard told us that CarAmigo’s fee will likely remain at the €100 level. “We want the final price to be closer to a c-to-c price than to a b-to-c price,” he told us.

Gaschard believes the potential market is huge, referencing 400,000 workshops across Europe, of which 30% are independent.

Deal with Mobivia Group

CarAmigo is focused primarily on small garages, mostly independent, but the company has penned an agreement with auto repairs giant Mobivia Group that could take its service across Europe.

Through its Auto5 garage repair brand in Belgium, France-based Mobivia Group is in the process of launching the CarAmigo service under the name Garantie Buy & Drive Auto5. If the launch goes well in Belgium, the model could be expanded across Europe, where Mobivia operates around 2,000 repair shops. CarAmigo has the same revenue agreement with Movibia — €100 commission fee per vehicle sold.

Gaschard also has plans to rollout the CarAmigo brand across the region.

“We can replicate the business in any of the European Union countries and the U.K. because we have a licence as an electronic money intermediary in all these countries,” he told us. “The deal we have with Real Garant is European so we can activate it in any country.”

The company is also hoping to enable garages to earn supplementary incomes by adding on comprehensive insurance, financing and road-side assistance services via third-party providers. CarAmigo hopes to have these service agreements in place by the end of this year.

Can the model succeed and be replicated across Europe? Automotive journalist Richard Dredge believes a service that allows people to buy and sell cars more cheaply and with greater peace of mind is welcome in the U.K. market.

“CarAmigo’s combination of pre-sale checks, warranty and escrow payment could allow buyers and sellers to deal with each other with more confidence,” he told the AIM Group. “The terms of the warranty are very important, because as we all know, some warranties are much better than others.”

Ian Ferguson, founder of U.K.-based automotive resolution and dispute service Reject My Car, likes the localized concept.

“I’m a big fan of independent garages, operating locally and trusted by people using them,” he told the AIM Group. “They fulfil an important function that’s sadly lacking in the mainstream motor industry. And because they are experts on the mechanical side, it would be easier for them to transition into the retail side.”

Adoption and marketing key

However, Ferguson is also cautious on the potential liability challenges.

“There’s an awful lot of things the [repair garage] needs to be aware of to make sure they’re protected legally,” he told us. “So they’re not being exposed to something that could ultimately be very costly, especially the more litigious the consumer gets.”

Other obstacles for the business include the speed of service adoption by garages, how well people understand the concept of “car agents,” recruitment and training of CarAmigo sellers that market the cars, and which marketplaces to use for car listings.

CarAmigo is fully self-funded, with Gaschard stating that the company will acquire capital “in an intelligent way” to grow.

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