We sold my wife's old Versa for more than she paid new to Carvana about 2 years ago. I wasn't upset but definitely didn't seem sustainable??
As Carvana crashes, used car dealers, not buyers, stand to win big
31–40 of 229 posts
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#32I think it should be very apparent to just about anyone that there aren’t enough programmers in the world to develop enough capable algorithms to buy and sell used cars or homes efficiently or profitably.
There are way too many nuances involved in such transactions that used car dealerships and the traditional real estate transaction model is never going away.
If there were any indication of it going the other way, used car dealerships would have gone out of business long ago. After all, you have been able to buy a used car privately through tons of websites or listing services without a middle man taking a profit for years. But the risk of doing so is too great.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#33The problem is with buying cars site unseen. I follow some car groups that revolve around tuning BMW engines for lots of power. It became a meme to post before and after pictures of heavily modified, drag strip/race prepped cars and then on the back of Carvana trucks some months later. I feel really sorry for people who bought some of those 340s and M3s. It’s just too easy to unload junk cars on companies like Carvan…
Even dealers weren't digging deeply during peak shortages. I probably overpaid for the new car I had to wait for last summer. (Minimal negotiating leverage.) But I got what seemed like a surprisingly high trade in as well.
But part of that was there was probably a period where you had buyers who were desperate for vehicles, any vehicle, that would get them to work or the store.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#34The header image there with the tall rack of cars certainly makes "Carvana crashes hard" and "has come crashing down" more vigorous and vicious. Props to the author.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#35But buying a car from a dealer remains horrible
Have you tried carmax? They don't allow sales people out on the lot. All the cars are unlocked, so you can get inside, and you can get all the info about the car from their app. I bought my last 2 cars from carmax, and was a totally painless experience.
You pay a non insignificant amount more for this experience. Not that it isn't worth it to some people, you don't get a horrible price you're just guaranteed not a low price. True about the entire haggle free market though.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#36We sold my wife's old Versa for more than she paid new to Carvana about 2 years ago. I wasn't upset but definitely didn't seem sustainable??
Yes, the unprecedented macroeconomic calamity that caused market-wide car prices to appreciate was not sustainable and is no longer happening.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#37Earlier quoted context omitted.
Can you explain the nature of the fraud and how it benefited each company?
Drivetime is a privately held subprime used dealer group that lists their inventory on Carvana, which is a public spinoff of Drivetime. The CEO of Carvana is the son of the Drivetime owner. Plenty of room to launder profits via wholesale prices.
This seems like wild speculation.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#38The car vending machines are such a monument to failure, at least here in the Chicago area where all the ones I see are totally empty.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#39The 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…
ZIRP gonna ZIRP
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#40I'm not surprised. I've heard multiple stories from multiple people about Carvana just forgot to collect money from them. They bought a used car, the car showed up, and Carvana just never took the money from them beyond the deposit. This is not only bad for Carvana and their cash flow, but bad for the buyer too, who just has to keep the money sitting there forever in case Carvana fixes the glitch and tries to transfe…
> I guess at least if they go bankrupt they can finally assume no one is coming for the cash...
My expectation would be that the liquidator is immediately going to start chasing those people, hard. Carvana may not be competent to organise collecting monies owed, but the folks managing bankruptcy? Hell no.