As Carvana crashes, used car dealers, not buyers, stand to win big
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As Carvana crashes, used car dealers, not buyers, stand to win big
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Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#2Until recently, they've been able to keep expenses relatively low, but selling cars has always been low margin business.
Their sales is still pretty strong, so I hope they're able to restructure their debt with creditors.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#3Doesn’t help they seem to have played so fast and loose they lost the legal ability to register vehicles in the name of their buyers:
https://www.motor1.com/news/621947/carvana-title-registratio...
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#4The problem seems to be that they sold too many cars with a negative margin. I've heard stories of people selling their cars sight unseen to Carvana for above market value and it seems they were left holding too many cars as the second hand car market normalized and prices decreased. Like a lot of VC funded companies, they were blinded to market realities by the cash each funding round produced. If they'd had to purchase cars with profits of past sales and their stock as collateral, they might have seen the reality sooner.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#5A car vending machine . This is why investing in gimmicks/fads is generally not a good idea.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#6The problem seems to be that they sold too many cars with a negative margin. I've heard stories of people selling their cars sight unseen to Carvana for above market value and it seems they were left holding too many cars as the second hand car market normalized and prices decreased. Like a lot of VC funded companies, they were blinded to market realities by the cash each funding round produced. If they'd had to purc…
The new car market is also probably contributing. I just bought a house and sold my hybrid for a Tacoma. I walked into a dealership lot to buy a '20 with 40k miles on it. I left with a brand new Tacoma with zero miles and a better package for $10k less. I was able to do this because the dealership needs to move inventory to get new cars from Toyota and hybrids are very in demand.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#7Until recently, they've been able to keep expenses relatively low, but selling cars has always been low margin business. Their sales is still pretty strong, so I hope they're able to restructure their debt with creditors.
There was a whole lot of fraud going on between Carvana (public) and DriveTime (private). It'll come out in due course.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#8Until recently, they've been able to keep expenses relatively low, but selling cars has always been low margin business. Their sales is still pretty strong, so I hope they're able to restructure their debt with creditors.
There was a whole lot of fraud going on between Carvana (public) and DriveTime (private). It'll come out in due course.
Can you explain the nature of the fraud and how it benefited each company?
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#9A car vending machine . This is why investing in gimmicks/fads is generally not a good idea.
It's a super-competitive business.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#10A car vending machine . This is why investing in gimmicks/fads is generally not a good idea.
I wonder how well this rule holds. What’s a gimmick vs not?
Juicero yes, Paleton probably, electric scooter depends on infrastructure?