Denting the Market : CarFaire Gives Owners a Chance to Showcase Their Used Cars


When Warren O'Neill decided to sell his car, he didn't want his wife, who works at night, to be disturbed by early morning callers responding to a classified newspaper ad.

And when he heard about a recent incident in Los Angeles where a man was assaulted and his car stolen during a test drive with a stranger, he disliked the idea of running such an ad even more.

So O'Neill decided instead to take his 1967 Porche 912 to CarFaire, a for-sale-by-owner used auto marketplace open since August on weekends at Irvine Valley College.

"I had planned to leave the car there all day," he said. "But I sold it in about six minutes. The buyer saw me drive in, and I had exactly what he was looking for. I sold it for $3,750."

O'Neill is just one of hundreds of county residents who have found a new way to sell their used cars. At CarFaire, the owners can showcase their used car without the expense of advertising and haggling with new-car dealers.

Here's how CarFaire works: Sellers bring their vehicle to Irvine Valley College, where Dave Anderson and Bill Hutchings, co-owners of the company, have leased space in the parking lot on weekends. Sellers pay $15 to display the car on the lot for one day or $25 for two days.

A balloon is tied to the car, and signs are taped to the windshield listing the vehicle's vital statistics: year, make, mileage, price and seller's phone number. The same information is taped to the car on a sheet of perforated tags that buyers can tear off and take with them. Sellers can stay or go home and wait for calls from buyers, who are admitted free.

About 600 to 800 buyers drop by the lot each day, "depending on the weather or the football game," Hutchings said.

There is usually a selection of 50 to 80 vehicles. CarFaire also maintains a book in which buyers can list a specific type of vehicle they are seeking to buy. The format was recently expanded to include boats.

Many of the cars are sold in deals made right on the lot, Anderson said, "but it's impossible to know how many cars have been sold through CarFaire, because we can't keep track of sales that happen when a buyer just takes a tag and phones the seller later on."

While CarFaire is the first for-sale-by-owner marketplace for used cars in Orange County, it is not a unique business concept.

"There are at least two or three others operating elsewhere in the country, including one in Santa Rosa, where I bought a car," Anderson said. "That's how I got the idea to start one here."

After operating San Vista Investments, a real estate investment firm, in Irvine for 10 years, Anderson and Hutchings were looking to open a business that would allow them to slow down, maybe work just a few days a week while dabbling in real estate and computer programming on the side. With the help of two other investors, they decided in January to form CarFaire.

"It hasn't been as simple as we thought it would be," Hutching said. "We had to insure the location for $1 million in liability. We're not making very much money, but we never expected to earn a full-time living doing this. But it's the most fun I've ever had working. I really enjoy the people."

There are future plans to expand CarFaire to other locations. But Anderson and Hutchings now have their hands full, even with four part-time employees helping out.

They are pleased with their good location in the college parking lot that is generally not used on weekends. Fortunately for them, the college had been looking for a way to make a profit on the unused space.

Don Rickner, director of development at Irvine Valley College, said state law requires the school to make the facility available to the public when it is not in use.

"Our first commitment is to nonprofit groups," Rickner said, "but under the law this can also include commercial operation. We decided to contract with them instead of allowing a weekend swap meet to operate on campus. CarFaire has a much lower profile. The money we make goes towards the school's development fund."

But after CarFaire opened a second location in October at Fullerton College, the Fullerton City Council denied it permission to continue; local car dealers complained that it competed unfairly, even though the company receives no profit from car sales or financing.

Jim Miller of the Fullerton Dealer Group, which represents some local used car dealers, said: "We understand free enterprise. But it just seems that they are doing almost the same thing we're doing without buying land and investing in buildings and signage."

Miller said CarFaire's for-sale-by-owner format allows it to circumvent costly regulations and standards required of auto dealers.

"The law requires us to inspect all the used cars we sell to make sure that the smog equipment is intact, that the brakes, lights and safety equipment are all working," he said. "If other defects are found, we have to sell the car on an as-is basis and offer a warranty for repairs. It costs us quite a bit of money to do all this."

But Hutchings said CarFaire simply creates a forum for buyer and seller to meet. "In that regard, we provide the same service as the classified ads," he said. "But we're renting space in a parking lot instead of a newspaper."

CarFaire has already won many converts. David Lloyd visited CarFaire's Fullerton location before it was shut down, hoping to find a good used car for their neighbor. Lloyd is a salesman at a nearby Toyota dealership; his wife, Laura, also sold Toyotas for three years.

"I think this is a great idea," Laura Lloyd said. "Lots of dealers don't want to be bothered with cars that are older or have lots of mileage on them. They end up selling them to auctioners."

For O'Neill, who sold his car so quickly, CarFaire was not only effective but enjoyable as well: "I knew there had to be people out there who wanted that car. And selling it at CarFaire was fun. I enjoyed trying something new," he said.

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