Can one negotiate with Carvana?
No. https://www.carvana.com/help/carvana-inventory/are-carvanas-...
That's a bummer. Wonder how many cars are sitting unsold.
Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
61–70 of 94 posts
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#62Earlier quoted context omitted.
When I was shopping for a used car in late Summer 2020, Carvana was priced 10-20% above traditional dealerships in the area for same make/model/trim/year/mileage. The traditional dealership process sucks so some people will pay the premium for a better experience, but as everyone's financial calculus has changed recently it may be that the number of customers who want to pay for that experience is receding.
I hate traditional dealerships, I usually would take an entire day off work to do the silly price/trade-in/finance dance because without exception it takes the better part of a day. The cost of using a vacation day (for a SW person) is close to a wash with the overhead cost of Carvana, Vroom, etc. They have much more selection on colors, trims, mileage, etc. than any local dealership and decent used cars have been sc…
Just buy directly from a private seller. I've never haggled more than 10 minutes over the price of a car (hint, most of them don't like it any more than you do). Make a fair offer, hand over the cash, and drive home. It's the only way I do it now.
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#63Earlier quoted context omitted.
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?
Of course there is.
I detailed cars at a dealership and my friend detailed cars at carmax when we were young.
Used car dealers are bottom feeders in the car sales. They generally have crappier cars than big dealers. I'm sure there are exceptions. When I worked at one they did shady fixes and would never purchase car from one.
CarMax performs multi point inspection. They have their own detailers, paint and repair shops. CarMax knows exactly what they are doing and their business model is sustainable.
Purchasing cars ala carvana is insane. In the car groups people often talk about offloading cars with issues to carvana and them sending a tow truck to pick it up. Zero inspections.
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#64Earlier quoted context omitted.
There isn’t going to be a fire sale. Their margins per car are positive and have only contracted about 20%. The margin isn’t enough to sustain their business, but the cars are priced in line with the market. Worst case, they would restructure in chapter 11 and continue to operate retail as normal.
> There isn’t going to be a fire sale. That depends on the interest to carry a car in inventory. Contracting margins plus increasing "floorplan" (what dealers call the line of credit they use to buy inventory) rates can be devastating.
If they can’t carry their inventory, they’ll go to another retailer through wholesale auction or direct buy, and show up for sale elsewhere at market prices. Carvana even owns an auto auction chain, which they bought to secure access to inventory but now might use to preferentially liquidate.
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#65Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.
The webpage is the simplest part of the business. They need drivers to pick up and deliver cars from every address in the nation. They have a fleet of hundreds of custom car-hauling trucks to maintain. They inspect, appraise, repair, detail and take 3D photographs of half a million cars a year -- that's thousands of mechanics, detailers, photographers. They deal with vehicle registration, state inspections and titlin…
I'd be curious to see what amount of the staff is actually lost and from what divisions. I doubt it'll be anyone working on the actual vehicle side of the business.
Carvana is a DriveTime spinoff, and leverages their existing infrastructure for all used vehicle processing -- massive warehouse-style facilities designed to process those vehicles as rapidly as possible and stage them around.
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#66All of the iBuyer like companies are going bankrupt. Turns out there just no way to cut costs enough to make a profit in these low margin, capital and asset intensive industries. The idea that Carvana, OpenDoor, Redfin, Zillow, etc. were ever going to achieve something like a monopoly over their respective industry was laughable at best. Doomed from the moment they opened the doors.
Carmax is very successful, not sure what they have to do with these tech companies
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#67Earlier quoted context omitted.
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…
Haha. In Austin I hear radio ads from a chain dealer (Henna) where they promise to pay you $500 more than whatever Carmax appraised your car at.
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#68Had a pretty bad experience trying to sell a car to them so not surprising
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#69Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.
The webpage is the simplest part of the business. They need drivers to pick up and deliver cars from every address in the nation. They have a fleet of hundreds of custom car-hauling trucks to maintain. They inspect, appraise, repair, detail and take 3D photographs of half a million cars a year -- that's thousands of mechanics, detailers, photographers. They deal with vehicle registration, state inspections and titlin…
Not every address in the nation. No availability in Hawaii, at least not on the Big Island.
Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
#70Earlier quoted context omitted.
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…
It's been a while since I bought a car, but this approach has worked out very well for me as well with every vehicle I've bought from a private party. Meet the previous owner, talk enough to decide if you trust them (walk if you don't), and learn about what the car's gone through. I'm much more nervous to buy a car from a dealer who usually has no idea what the car's been like aside from the state in which they brought it in.
If there's a specific model or models I'm shopping for, I do some research (reviews and forums) to try to get to know their quirks and pitfalls so I can check for them when I go to see the car. I tend to over-research big decisions but with cars it's useful to know what I'm getting into and what to watch for in the future.