Enthusiast car auction site Cars & Bids, founded by Doug DeMuro, is currently facing headwinds, as evidenced by recent workforce reductions. This week saw substantial layoffs impacting various departments, including moderators, the business development team, accountants, and human resources. While numerous online car auction platforms have emerged in recent years, Cars & Bids distinguished itself by gaining significant traction and establishing a stable presence in the market. This raises the question: what factors are contributing to these changes? While the complete picture remains internal to Cars & Bids, analyzing publicly available information suggests a combination of factors, including recent investment, a cooling enthusiast car market, and potentially decreased revenue.
Alt text: Cars and Bids website interface showcasing various car auction listings.
The current market adjustments appear to trace back to January 2023, when Cars & Bids secured a $37 million investment from private equity firm The Chernin Group. While investments can fuel growth and reward founders, they can also introduce pressure for rapid returns, potentially leading to a less patient approach. Simultaneously, the collector car market began its shift from the highs of 2021 and 2022 towards a more normalized state, although the decline was still underway.
Around the time of the investment, Cars & Bids was completing approximately 25 auctions daily. While the fees generated from this volume could sustain a smaller operation during peak market valuations, increasing this number became crucial for business expansion. Approximately 14 months later, by early March, Cars & Bids had marginally increased daily auctions, nearing but not consistently reaching 30. Concurrently, the automotive industry observed a rise in vehicles failing to meet reserve prices. Given Cars & Bids’ revenue model, which relies on buyer’s fees, this shift likely prompted the recent restructuring.
In March 2024, Alanis King, a Cars & Bids alumnus and contributor to The Autopian, confirmed content team reductions in an Instagram comment. This restructuring extended beyond the content team, encompassing CEO Rogelio Choy’s departure from the company in March of the previous year.
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Fast forward to February 2025, and Cars & Bids’ daily auction closings seem to have slightly decreased compared to two years prior, with many days in February falling below the 25-auction mark. Furthermore, the market frenzy of early 2023, coinciding with the capital infusion, has subsided. The era of quickly flipping new Rivians for profit is over, as early adopters are hesitant to sell at a loss, and current owners are more inclined to retain their vehicles.
Doug DeMuro addressed these market dynamics in a recent episode of the Iced Coffee Hour podcast:
“End of ’21 was the absolute peak of the craziness… COVID shutdowns had really stopped production of new cars, or heavily diminished production… used cars had gotten incredibly valuable, and at the same time, money was cheap… used cars were becoming more valuable, new cars were not available, people were getting incredibly low-interest loans, it was Thunderdome. We couldn’t put reserves on cars high enough. People would come in, ask for crazy reserves, we’d give it a shot, it would sell every single time, it was just crazy. Things are different now. The supply and demand in the market has certainly caught up for most automakers… new cars are cheaper now, capital is more expensive — getting loans is harder, more expensive to finance cars — and so that has made new cars cheaper, which in turn has pushed used car prices back down, and the market is considerably different now.”
This market correction has led to more reasonably priced vehicles being sold on Cars & Bids. While beneficial for buyers, this trend means fewer cars reach the $4,500 cap on the 4.5 percent buyer’s fee, potentially impacting Cars & Bids’ revenue.
For example, on February 11th, Cars & Bids facilitated approximately $380,625 in car sales, generating an estimated $17,128.13 in buyer’s fees. In contrast, on February 10, 2023, the site moved roughly $627,742 worth of vehicles, resulting in approximately $28,248.39 in buyer’s fees. While market seasonality makes direct date comparisons challenging, this significant difference during a typically slower sales period suggests that broader market decline could be a key factor behind the recent layoffs. While ambitions for growth likely contribute, reduced revenue is also a plausible concern for Cars & Bids.
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When contacted for comment regarding the layoffs, Doug DeMuro provided the following official statement:
“Cars & Bids is making changes to our organization to better support our buyers and sellers. Sometimes those are difficult decisions, and they never come easy — but we’re confident that the best is yet to come from Cars & Bids.”
Currently, our thoughts are with the impacted employees. Working within the enthusiast car community often stems from genuine passion, and the loss of a fulfilling career in this field is undoubtedly disheartening.
(Lead photo credit: Cars & Bids)
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