171–180 of 229 posts
Until 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.
Doesn’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...
I’m really surprised to have had to have scrolled down this far to see their registration hijinks mentioned…
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I think you can generalize even further and say that this story applies to most companies flooded with investor capital. Take Uber for example. The VC subsidies convinced a significant portion of people to upend their lifestyles and attempt to make money in an ecosystem where prices were artificially juiced by VC money. It's ironic that free market types are completely for subsidies when the private industry does it,…
There really should be a law against this. It's jarring to the economy to confuse people with artificial prices when your sole goal is to snap a customer base into some long term reliability on a platform or product that isn't necessarily any different after the subsidy runs dry and it needs to become self-sustainable.
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One of Carvanas major problems is titleing and registering cars doesn't scale. It is in most stares a manual, paperwork driven process. Example, Ohio has 88 County Clerks of Courts Title. Source, family member who worked there.
Easy to blame that it's a manual paperwork driven process, but I'm glad that transferring a legal title isn't a one click process. These are not software EULAs and title related fraud is still a big risk even with all the safeguards. National chains like CarMax handle this paperwork just fine and Carvana should've invested more in the back office staff rather than overpaying for used Jettas, you know to move fast and…
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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 COVI…
Carvana has done the same thing, 20 years later.
Car dealerships, for the most part, have not evolved at all or even tried. The experience is still a huge pain in the ass, and they know it.
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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…
> The only winning move seems to be stay private and accept there's a near-term cap on your revenue growth, after which you will grow much more slowly (at the natural supply expansion rate). Or go multi-brand, and introduce cheaper brands for the lower quality properties, to maintain the goodwill for the higher quality brands. Many hotels do this with many different brands under the same organization that segment the…
But hey, if you feel that attached to a Hampton Inn as opposed to a Home2 or a Hilton Garden Inn I guess it makes sense. It's all the same to me though and seems like just a waste of paperwork and administrative tasks to continue the facade of three brands in the same building.
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There really should be a law against this. It's jarring to the economy to confuse people with artificial prices when your sole goal is to snap a customer base into some long term reliability on a platform or product that isn't necessarily any different after the subsidy runs dry and it needs to become self-sustainable.
Why should there be a law? People benefited with cheaper taxis and VCs lost their money
Or maybe this is better actually, since it’s much clearer for investors: With Zillow, as an investor maybe I didn’t want to be in the home buying business at all. And now Zillow is burning my money by getting into it. If I had wanted to get into the home buying/flipping business I could have just bought Homevana stock. Carvana is clearly doing one thing. And if you want to do that thing you buy their stock.
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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…
And going into a dealer with cash and buying a car at list price and taking the offer for a trade-in--all with minimal haggle--really isn't a terrible experience in general. I bought a new car over the summer which wasn't immediately available but otherwise was a pretty straightforward transaction. The pain is that people get pulled into negotiations that mix in a bunch of different things (purchase price, trade-in,…
I bought an electric car recently and only put up with the minimal haggle of an MSRP cash deal because I was on a sabbatical and had more time than usual. But my partner and I were ready to go for Carvana before my sabbatical or if we couldn't find a dealer willing to stay low-bullshit with us. I ended up calling 6 dealerships and asking my partner to clear her evening just for the one dealership that offered us a low-bullshit deal.
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> The VC subsidies convinced a significant portion of people to upend their lifestyles and attempt to make money in an ecosystem where prices were artificially juiced by VC money. People didn't seriously upend their lives to drive for Uber until they retire. The people who were hurt by Uber were people who bought taxi medallions and suddenly found themselves competing with unlicensed taxis. But on that point, as much…
It's the same price as taxis nowadays.