Los Angeles-based SureSale is developing an independent certification service for used cars

Donny Hall, the chief executive and co-founder of the used car certification service, SureSale, knows used cars. The serial entrepreneur built and sold a previous business, CarSure, which was an insurance plan for vehicle repairs.

After selling that business in 2017 to Innovative Aftermarket Systems, Hall decided that his next venture would be to take on the used car industry’s dominant source for historical information about a vehicle — Carfax.

His Santa Monica, Calif.-based SureSale has raised $7 million in financing from the LA-based investment firm Upfront Ventures to create a national used car certification service that dealers and car shoppers around the country can turn to for an unbiased assessment of a vehicle and its problems, according to Hall.

“66 percent of consumer want to buy cars that are certified and only 7 percent do,” says Hall. “Independents don’t have any national [certification] program and dealers don’t have national programs.”

The company integrates background checks, insurance, and provides a limited warranty and five-day exchange options for vehicles assessed through its program.

To launch the business, Hall partnered with Jeffrey Schwartz, the co-founder of the used car marketplace and review platform, Autobytel.

The company currently counts 75 dealerships as users of its service in states across the country including North Carolina, Illinois, and California.

Used car dealerships are hurting in the ecommerce age just like other traditional retailers. SureSale is betting that its value-added services and better reporting standards can give dealers a competitive advantages versus online services like Carmax.

Dealerships pay for the service, but in return their customers get a full inspection, a title and a background check alongside the five month warranty.

“Even though there have been a number of recent startups that have seen massive exits in this category like Carvana ($13BN market cap) and Carmax ($16BN market cap), given that each company has less than 2% market share, any market this large is always ripe for continued efficiency gains,” wrote UpFront Ventures partner and SureSale director, Kobie Fuller, in a blog post.