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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

#111

Post by PLenz »

lokar wrote: post #77
mr90210 wrote: post #61

Earlier quoted context omitted.

Look up Joshua Fluke on YouTube, on one of his last videos he talks in details about the legal issues that Carvana has had.

I’ve heard that before, and always wondered: how dealership owners are able to buy so much power in state capitals?

The GM streetcar conspiracy basically gave dealerships to already politically connected individuals in return for killing off streetcars - the payoff being that the busses that replaced (poorly, hence encouraging private car ownership) would be bought via the dealerships. Car dealership owners are often car dealership owners because of adjacency to power, not the reverse.

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

#112

Post by 015a »

rsj_hn wrote: post #105
015a wrote: post #100

Earlier quoted context omitted.

That's... not what anyone is saying. I bought an Audi from Carvana. It was more expensive than anyone else (~2-4% more). The price they paid for my trade-in wasn't as good as some competitors. I did not interact, in any way, with one of their vending machines. I'd still do it again. It was a totally hands off experience; I will pay extra to not be talked to by someone. The checkout wizard was nearly as easy as buying…

This is what I was saying before on here (and getting downvoted). Carvana's value add was selling used cars to people who don't like the experience of buying used cars. It's a good idea and someone else can take their place. The problem with Carvana was that by offering auto loans to buyers as well as taking out loans to buy cars from sellers, they became excessively levered in a time of rising interest rates and fal…

I can't speak for how Carvana operates today, but when I bought my car years ago the loan was subcontracted through some unrelated financial provider (Go Financial, now Bridgecrest). I remember being kind of annoyed at this; that I wasn't just signing in to Carvana's website to pay. But, its fine.

I think Carvana did make mistakes; but I also think the industry as a whole is very deeply suffering right now. And we only hear about Carvana because they're a VC SV darling.

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

#113

Post by 015a »

epa wrote: post #106
015a wrote: post #100

Earlier quoted context omitted.

That's... not what anyone is saying. I bought an Audi from Carvana. It was more expensive than anyone else (~2-4% more). The price they paid for my trade-in wasn't as good as some competitors. I did not interact, in any way, with one of their vending machines. I'd still do it again. It was a totally hands off experience; I will pay extra to not be talked to by someone. The checkout wizard was nearly as easy as buying…

Oh no, talking to someone

I love talking to people. I don't like being talked to.

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

#114

Post by ipython »

ethbr0 wrote: post #95
GekkePrutser wrote: post #90

Earlier quoted context omitted.

I wonder if it's possible for these concepts to really go big. The problem is, there's a lot more lemons on the market then there's great deals. Nobody wants the car that doesn't start twice a week or that's been in an accident and has its chassis skewed. These sites start out by promoting seller karma or something but even the best sellers have lemons to get rid of. At the start they probably just sell them elsewher…

Aka the AirBNB problem. In a nutshell, that you can't have a high quality growth company forever in an industry with a fixed supply of high quality items. Initially, you grow like crazy and with great user reviews, as you're able to pick and choose the highest quality items. Unfortunately, at some point you exhaust the supply at a given quality level, but your valuation mandates continued growth. So you lower your qu…

Uber is the same way. At first it was novel and driver pay was heavily subsidized so you had high quality drivers with nice cars. Over time the price for riders increased, driver pay decreased, and driver quality also decreased.

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

#115

Post by [deleted] »

freeopinion wrote: post #94
moralestapia wrote: post #66

Earlier quoted context omitted.

The problem with Carvana's valuation is that car dealerships run on thin margins. It's very hard to make billions out of that.

I have several issues with your comment. 1. What makes you think car dealerships run on thin margins? I don't know what typical margins are, but the owners seem to do pretty well. This may be despite low margins. But I'm reluctant to accept your claim without proof. 2. What qualifies as low margin? 1%? 10%? 3. It is entirely possible to make billions on low margins. A dealer that makes $1000 per car can make $1 billi…

[deleted]

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

#116

Post by dimmke »

avalys wrote: post #91
phphphphp wrote: post #76

Earlier quoted context omitted.

The good experience you had early on and the bad state of the company now are closely linked. The story is always the same with this type of company: take a mature industry that is profitable on a unit basis because it’s boring and unpleasant, then build a narrative around some strategy to make it exciting (giant vending machines!) and get buy-in to spend huge amounts of money in pursuit of the narrative but eventual…

Yeah, exactly. "I loved Carvana because I bought a great car from them at a better price than the legacy players!" and "I loved Carvana because they bought my used car at a really good price!" Guess what? Buying cars for too much money and selling them for too little money means they go out of business.

I loved Carvana because I bought a car from them for about the same price I’d pay at a dealership but it was all online and I didn’t have to feel like I was getting swindled at any point.

The experience of buying a car at a dealership is a fucking nightmare. It’s awful. It’s the worst customer experience you can have in the United States.

There’s been some serious issues with the used car market fluctuating over COVID but it’s very reductive to now say “oh they were bad the whole time just another unprofitable unicorn”

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

#117

Post by Finnucane »

xnx wrote: post #38

The 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.

I didn't even think those were real. I'd seen pictures, but I thought it was just for show. Like who would actually build that?

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

#118

Post by bombcar »

015a wrote: post #113
epa wrote: post #106

Earlier quoted context omitted.

Oh no, talking to someone

I love talking to people. I don't like being talked to.

Remember the bad old days of having to dodge hordes of salesmen just to try to buy some computer parts?

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

#119

Post by allthecybers »

015a wrote: post #100
avalys wrote: post #91

Earlier quoted context omitted.

Yeah, exactly. "I loved Carvana because I bought a great car from them at a better price than the legacy players!" and "I loved Carvana because they bought my used car at a really good price!" Guess what? Buying cars for too much money and selling them for too little money means they go out of business.

That's... not what anyone is saying. I bought an Audi from Carvana. It was more expensive than anyone else (~2-4% more). The price they paid for my trade-in wasn't as good as some competitors. I did not interact, in any way, with one of their vending machines. I'd still do it again. It was a totally hands off experience; I will pay extra to not be talked to by someone. The checkout wizard was nearly as easy as buying…

> I feel extremely, EXTREMELY, confident in saying that this attitude has sold Teslas to three people in my bubble. You can start the process to buy a Tesla with Apple Pay. Seriously. Their new delivery process involves ZERO people;

My Tesla was ordered online (Apple Pay) and dropped off at my driveway. The only human interaction was the friendly Tesla delivery associate that had a couple papers for me to sign.

Audi, Volvo and Mercedes all had people trying to sell us last years model, adding packages we didn’t want or completely out of inventory on the vehicle we did want.

It’d be great if the Carvana sales model could be adjusted to market pricing, so the customer experience is the same but would be a profitable business.

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

#120

Post by bombcar »

adrr wrote: post #93
rodgerd wrote: post #40

Earlier quoted context omitted.

> 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.

They could always get in writing that they don’t owe Carvana any money and it will be very hard to collect as a debt.

Even if you don’t get it in writing you can ALWAYS contest and demand proof from whoever the liquidator sold to - I personally would consider it pretty unethical to try to get out of a valid debt that you intentionally took on but it’s a tactic that is known to work and screw the usurers anyway.

Often the paperwork has been misplaced or lost.

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