CARCHEX in the News

Capital infusion and new senior executive fuel CARCHEX as leading provider of auto inspections and extended warranties

Baltimore executive founded company after Internet search for sports car

HUNT VALLEY, Md. (Oct. 9, 2006) – With a major infusion of new capital and the addition of seasoned executive to its leadership team, CARCHEX is now poised to further its steady growth as the nation's leading company offering both direct-to-consumer vehicle inspections and extended auto warranties. Created just two and half years ago after a Baltimore executive's national Internet search for a weekend sports car, CARCHEX has experienced rapid growth, forging impressive automotive partnerships and bolstering its national network of top-rated vehicle inspectors.

CARCHEX founder and CEO Jason Goldsmith today announced the appointment of GAR RICHLIN, former president and COO of Advertising.com and former COO and CFO of SITEL Corp., as chairman of the board.

The addition of Richlin coincides with a major infusion of capital from Baltimore-based private equity firm Atlantic Capital Group LLC, which now holds a minority interest in CARCHEX. Atlantic Capital brings both added investment and strategic automotive partnerships, key to continuing the rapid growth of CARCHEX.

"Adding veteran and talented executives like Gar to our management team is critical to building and managing the infrastructure needed to support our plans for continued rapid growth," Goldsmith said. "Our ability to attract top executives to the company at such an early stage in our growth is a clear indicator to us that we are on the right track. We are in a prime position to continue as the brand leader for consumer-based vehicle inspections and extended auto warranties."

Goldsmith said CARCHEX plans to grow to 1,500 inspectors and 120 office employees in the next two years. The company recently relocated its corporate headquarters to a 13,500-square-foot facility in Hunt Valley, Md., from its previous location in Baltimore's Tide Point.

With more used cars being sold than new each year (some 43 million in 2005, according to CNW Marketing Research), CARCHEX is capitalizing on the burgeoning market's uncertainty on product quality, reliability and unexpected repairs. It's a concern to which Goldsmith, himself, can relate.

Opportune founding, rapid growth

In early 2003, Goldsmith searched online for a 1996 V-12 Jaguar Convertible, eventually finding what seemed like the perfect car on the other side of the country at a dealership in Portland, Ore.

Goldsmith wanted to be an informed consumer for such a significant purchase, but living 3,000 miles from the seller made it a daunting task. He researched online and learned about a Portland company that specialized in vehicle inspections. This company sent a certified vehicle inspector to the dealership to investigate the quality of the Jaguar, which the inspector evaluated as being worth less than advertised.

This process continued five more times, and on each occasion the same Portland company, called CARCHEX, used its network of 75 vehicle inspectors to inform Goldsmith that the other Jaguars were also not worth the asking price or had undisclosed problems.

Although he never did buy his weekend toy, Goldsmith who had founded, built and sold TheLoanPage.com, did purchase Portland-based CARCHEX, believing he could apply his expertise in Internet lead generation to accelerate the growth of the auto services company.

A good brand name and business model – combined with the power of the Internet and strategic relationships with other companies in the automotive industry such as CARFAX, MileOne Automotive, Auction 123, Insurance.com, Netquote, eBizAutos (dealers.ebizautos.com), Dealer123 and CARad, an eBay Company providing vehicle listing services – have helped CARCHEX grow to more than 900 vehicle inspectors throughout the country and 50 employees based at its corporate office.

Unique extended auto warranty offering

CARCHEX expanded its offerings in 2004 by selling extended warranties for pre-owned vehicles. CARCHEX works as an independent broker, researching the best "A+ rated" warranty providers for nearly all new or pre-owned vehicles in the United States. CARCHEX customers are presented with competing price and coverage options and provided with a simple way to compare and choose the right extended warranty coverage. Additionally, the company provides its customers with the flexibility to choose their own repair location, as well as services such as 24-hour roadside assistance, rental benefits, towing and a 100 percent money back guarantee if their customers never have to make a claim.

This new portion of the company's business expects to benefit from a $10 billion-a-year industry that is highly fragmented, without a clear market leader. Accompanying the booming used car market, manufacturers' warranties are expiring faster than ever, due to longer commutes. The result, CARCHEX forecasts, is unprecedented demand for used car protection and assurance products.

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