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Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

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Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#41

Post by wilsonnb3 »

gbronner wrote: post #30

The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this. As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation. That is an insane move on a durable asset.

The concept is great but I never really saw the point of Carvana when CarMax already exists.

Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#42

Post by reaperducer »

avgDev wrote: post #21
twblalock wrote: post #18

Earlier quoted context omitted.

If that was the case, why isn't the same thing happening to Carmax and Vroom and the other Carvana-style used-car dealers? Used car prices are falling and I assume it would hurt all of them, but it seems to be hurting Carvana more than the others.

Not sure about Vroom, but carmax actually performs proper car inspections before purchase. They are not moving fast and breaking things.

Not sure about Vroom, but carmax actually performs proper car inspections before purchase.

Those CarMax inspections are so valuable that vultures patrol the parking lot, and if you leave without selling your car, they'll follow you home and make an offer on your car.

It happened to me. CarMax said the car was worth $8,500. I wanted to bring in my other car for an evaluation to decide which one to sell. A guy followed me to the grocery store across the street, approached me in the parking lot and started his pitch with, "I'll give you a thousand dollars more than whatever CarMax offered you."

I asked him if he wanted to look under the hood and take it for a test drive or anything, and he said he didn't need to, because CarMax had already done the hard work for him.

(My life situation changed shortly thereafter and I didn't end up selling either car.)

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#43

Post by QuarterReptile »

eddsh1994 wrote: post #37
davewritescode wrote: post #25

Earlier quoted context omitted.

This is completely anecdotal but there's been a couple of times during COVID when I was stuck at a light next to a Caravana truck on it's way to drop off a car and I noticed what appeared to be non-trivial issues underneath the car. I just don't get how people can buy a used car without seeing it or sending over a professional to look at it first.

I bought a Nissan Rogue two months ago with Carvana - it had a 7 day no questions refund, free repairs for a year, and we got to test drive for 30 mins before they signed it over to us. Overall I felt very comfortable with this purchase, much more than a small local dealership or even worse a stranger on some FB group.

I buy older cars than Carvana seems to deal in, but I love the Craigslist and FB cars.

I get to the meetup point early (better if it's at their house where I can make judgments from that), and then I watch them drive up. Talk to them for a while, see if they're knowledgeable, etc. Then inevitably you get a name over the course of messaging/texting/email, and you can get more insight about their background. You get to talk to them for a while and find out why they're getting rid of it. If you've gotten to the point of trusting them (otherwise, you're long gone), ask specific questions about car history, and you can have reasonable hopes that they'll tell the truth.

Anyway, the car's been great, and he told me some problems that I would have taken 6 months to discover on my own.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#44

Post by gunapologist99 »

wilsonnb3 wrote: post #41
gbronner wrote: post #30

The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this. As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation. That is an insane move on a durable asset.

The concept is great but I never really saw the point of Carvana when CarMax already exists. Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.

Carvana did deliveries to your home (apparently), while CarMax would deliver to their nearest lot, which might be a long way away.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#45

Post by bagels »

gbronner wrote: post #30

The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this. As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation. That is an insane move on a durable asset.

Very similar experience selling my car to Carvana last fall. I wish I put the obvious pieces together sooner about how they can't keep overpaying for cars and stay solvent.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#46

Post by bagels »

wilsonnb3 wrote: post #41
gbronner wrote: post #30

The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this. As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation. That is an insane move on a durable asset.

The concept is great but I never really saw the point of Carvana when CarMax already exists. Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.

Carvana came to my house and picked up the car I was selling. It was all done in a few minutes. I didn't have to take any pictures, just describe it on the web form, and sign some papers when they showed up.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#47

Post by SoftTalker »

avgDev wrote: post #21
twblalock wrote: post #18

Earlier quoted context omitted.

If that was the case, why isn't the same thing happening to Carmax and Vroom and the other Carvana-style used-car dealers? Used car prices are falling and I assume it would hurt all of them, but it seems to be hurting Carvana more than the others.

Not sure about Vroom, but carmax actually performs proper car inspections before purchase. They are not moving fast and breaking things.

Is there any evidence of this? I assumed they buy cars at wholesale auctions, maybe wash/clean them, and put them on sale, like any used car dealer does.

I have asked a couple of used car dealers (not CarMax specificially as there isn't one near here) if they do anything to these cars to prepare them for sale. They just laugh. The margins are not there to repair any problems, so what is the point of inspecting them?

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#48

Post by sumtechguy »

thatguy0900 wrote: post #14
sys_64738 wrote: post #10

Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.

The engineers make a fuss when you ask them to clean and appraise cars and make the website at the same time

Rather detail a car sometimes than deal with Jira.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#49

Post by zachshefska »

Carvana is destined for acquisition or bankruptcy. They have WAY too much inventory that they overpaid for. Consumer demand has plummeted and new car supply is bouncing back (up 78% year over year). They have too much debt on their books to make the model work. Good thing the CEOs dad cashed out when he did.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#50

Post by plgonzalezrx8 »

sys_64738 wrote: post #10

Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.

Bro, are you kidding me? How the cars get to the dealers? How is the inventory managed? Delivered? Purchased? Service Centers? Customer Service? Legal? Etc etc etc.... Its not "Just a website" and your incredible oversimplification is atrocious.
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