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As Carvana crashes, used car dealers, not buyers, stand to win big

businessinsider.com

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Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#41

Post by MuffinFlavored »

altacc wrote: post #4

The 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 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.

How did a bunch of paid professionals in their leadership not see this coming/account for this happening?

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#42

Post by bigtex »

nyc640 wrote: post #28
donw wrote: post #26

Earlier quoted context omitted.

Why'd you go for the Taco over a Tundra?

Not GP, but the Tundra is enormous compared to a Tacoma for someone coming from a car and not used to a full-size. I was also considering a Tundra since the model refresh, but even compared to our current truck (Land Cruiser) the Tundra felt noticeably larger and less maneuverable.

Is the Tundra Hybrid even available yet? I love my 2007 but that thirsty V8 gets awful gas mileage.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#43

Post by stevesearer »

cjoelrun wrote: post #35
subroutine wrote: post #24

Earlier quoted context omitted.

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.

Also a fan of Carmax.

I likely don’t have the skills / patience necessary to get a better deal from a dealership anyway so just buying a car in my price range without the games works pretty well.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#45

Post by arealaccount »

Bummer, buying from a dealer always feels bad. Would be great if a company could figure out a digital off the shelf shopping experience.

The last car buying experience I had the brick and mortar dealerships listed so many bait cars that online shopping was scammy/pointless.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#46

Post by version_five »

donw wrote: post #26
kodah wrote: post #6

Earlier quoted context omitted.

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.

Why'd you go for the Taco over a Tundra?

A lot of people want a pickup but don't need a full size truck. Tacoma fills this niche - probably more people that have big pickups would have all their needs met with a tacoma sized one. Though it feels like all trucks have scaled up massively over the past 20 years and a 2020 tacoma is probably as big as a 2000 F150.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#47

Post by Waterluvian »

rodgerd wrote: post #40
jedberg wrote: post #25

I'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.

Bankruptcy companies are like Star Wars backwater scrapyards. Might not seem sexy or high profile but man do they know how to strip a company down quickly and effectively.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#48

Post by ghaff »

ape4 wrote: post #13

But buying a car from a dealer remains horrible

In a way, the hard to negotiate market makes things easier. It took me about 6 weeks to get a car that was "in transit" which actually meant it was "in the manufacturing pipeline." But, other than that, I spent maybe a few hours at the dealer on a couple visits, negotiated down some factory installed options by getting them added to a trade-in, mostly fended off some upsells... No it's not just click and buy on a website but for a big purchase, hard to call it horrible.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#49

Post by rodgerd »

paulpauper wrote: post #5

A car vending machine . This is why investing in gimmicks/fads is generally not a good idea.

There's a lot of appeal to a car vending machine if done right. Like, if I could plug in that I want a Prius Alpha dropped off at my door for no more than X dollars, and someone would hook me up with a well-vetted second-hand Alpha, I would totally be very happy with that instead of guessing and wrangling.

The problem is that involves a lot of stuff that self-styled hyperscalers are garbage at: quality checks, human interaction, and such.

Re: As Carvana crashes, used car dealers, not buyers, stand to win big

#50

Post by ketzo »

arealaccount wrote: post #45

Bummer, buying from a dealer always feels bad. Would be great if a company could figure out a digital off the shelf shopping experience. The last car buying experience I had the brick and mortar dealerships listed so many bait cars that online shopping was scammy/pointless.

Yeah, there's a lot of people here mocking Carvana, but the user experience is fucking phenomenal. (Yes, aside from the "user experience" of selling your car for more than it's worth).

Buying from dealerships is not something I ever want to do again.

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