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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

#201

Post by ElevenLathe »

robertlagrant wrote: post #198
Apocryphon wrote: post #188

Earlier quoted context omitted.

> Free market types aren't against private investors throwing private money They're free to do so, but isn't it cheating when it undercuts competitors while propping up unsustainable businesses in the long run? Subsidies that support predatory pricing don't sound fair.

Cheating at what? If you sell me your house for $1 then have you "cheated" all the other house sellers? What have you accomplished by this "cheating"?

Libertarianism treats the market as a game when it suits (i.e. when other people are "cheating") and as a natural law the rest of the time (i.e. when other people want to change the already-artificial rules of the game via politics).

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

#202

Post by ghaff »

Karrot_Kream wrote: post #179
ghaff wrote: post #154

Earlier quoted context omitted.

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,…

That's still a lot of work. If I have cash for MSRP why do I have to deal with "minimal haggle"? Can I not just buy the asset? There is definitely an audience of people who know what they want and how much they want to spend and Carvana is able to meet it. I think there's definitely more demand for effortless purchases than just CarMax. I bought an electric car recently and only put up with the minimal haggle of an M…

>If I have cash for MSRP why do I have to deal with "minimal haggle"?

Because I want to save money? It literally took about 5 minutes to ask them to add the ~$1500 price of some factory-installed options to my trade-in price and they had a deal.

It wasn't completely frictionless but far and away the main hassle was just car availability. Had I been willing to take a similar vehicle they had on the lot it would have been quicker.

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

#203

Post by tristor »

phphphphp wrote: post #76
hn_throwaway_99 wrote: post #55

I bought a used car from Carvana before the pandemic, and this is pretty sad news to me because after that purchase I vowed that all my future cars would come from Carvana. The buying experience was simply excellent for me, and I couldn't be happier with the car I bought. I figured I probably could have gotten a comparable deal slightly cheaper somewhere else, but I would have wasted a ton of time, and still would ha…

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…

I think you could generalize much further and just say this is what happens to companies that don’t understand the basic principle of CAC to LTV ratio. If it’s negative, when the funny money stops, it’s gonna be a rough ride.

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

#204

Post by BeFlatXIII »

phphphphp wrote: post #76
hn_throwaway_99 wrote: post #55

I bought a used car from Carvana before the pandemic, and this is pretty sad news to me because after that purchase I vowed that all my future cars would come from Carvana. The buying experience was simply excellent for me, and I couldn't be happier with the car I bought. I figured I probably could have gotten a comparable deal slightly cheaper somewhere else, but I would have wasted a ton of time, and still would ha…

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…

I wonder what we can do as consumers to convince investors to make stupid decisions to subsidize unprofitable industries so we can enjoy cheap prices.

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

#205

Post by CobaltFire »

hajile wrote: post #160
tptacek wrote: post #88

Earlier quoted context omitted.

For what it's worth, I felt the same way about Carmax, last year. Bought online, they drove the car out to me, and when a better trim of the same car popped up on their site 2 weeks later, I just traded it sticker-for-sticker no questions asked. I'm sure I didn't get close to the best price, but I got better than dealership sticker for the make/model/year, and I lost zero time to the transaction.

Just one car auction company (a subsidiary of Cox) controls 80-90% of the market. If a dealer avoids junk, ungraded cars, then the quality is very standardized. As a result of a completely centralized pseudo-monopoly, actual acquisition cost is set to an extreme degree (car auction price ranges are so tight that top and bottom bids are usually within a hundred dollars of each other from very cheap to very expensive v…

Coincidentally this arrange to bid is exactly the process most military moving to Japan use with local mom and pops. Works excellently.

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

#206

Post by theGnuMe »

faddypaddy34 wrote: post #140
tptacek wrote: post #88

Earlier quoted context omitted.

For what it's worth, I felt the same way about Carmax, last year. Bought online, they drove the car out to me, and when a better trim of the same car popped up on their site 2 weeks later, I just traded it sticker-for-sticker no questions asked. I'm sure I didn't get close to the best price, but I got better than dealership sticker for the make/model/year, and I lost zero time to the transaction.

I have bought almost all of my cars from CarMax in the last decade. Even going into their dealerships in person is not a typical experience. There is no negotiation on price and the only "upsell" was their extended warranty. They are also hemorrhaging money currently and hopefully don't go the way of carvana.

I bought through carmax and I call it dealership lite. They tried to finance me even though I already had financing (and I said no) and pushed the extended warranty pretty hard. It is like $5k for 150k miles. I've heard you should buy it if you go for a BMW, jaguar or other higher maintenance car.

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

#207

Post by FireBeyond »

allthecybers wrote: post #119
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…

> 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,…

> 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.

Did you get to inspect the vehicle before you signed the papers? Have heard numerous stories about that, where people either don't get a chance to do so, or when they do find concerns, are pressured by the delivery associate to accept it, "and we'll fix things at the Service Center".

Similarly, my Audi dealer has never tried to run the numbers on trading my car in when I've been in for a service visit, and the only vehicles they've tried to put me in is a loaner vehicle if the service time will be 2 hours or more (and unlike Tesla, they -always- have a loaner for you, even if it's one from the lot).

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

#208

Post by FireBeyond »

cameronh90 wrote: post #109
Booktrope wrote: post #62

Earlier quoted context omitted.

Yeah, bankruptcy basically does not let anyone off the hook who owes the bankrupt company or person a debt. But collection is overseen by a court which definitely can mean that efforts to collect debt owed to the bankrupt party can intensify and are unlikely to end until money is collected.

Over a decade ago, when I first left home, I bought a bunch of home appliances on finance. They never collected any payments, and a few years later, they went bankrupt. Nobody ever came after me and nothing ever appeared on my credit report. It doesn't happen often, but it does happen.

Same here, although it was bedroom furniture and bed/mattress etc., to the tune of a couple of thousand dollars. Even set up autopay.

Never once charged. Two years later, company was shutdown. Ten years ago now.

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

#209

Post by FireBeyond »

godzillabrennus wrote: post #3

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...

My girlfriend had a -similar- issue with Shift. She was their first sale in Washington when they expanded up here, and for whatever reason, titling and registration was screwed up repeatedly.

What was interesting was that when the temporary tabs expired, rather than extending them, they put her -in a rental- for two -months- and paid those two months payments, -and- gave her $300 for her trouble.

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

#210

Post by generj »

FireBeyond wrote: post #209
godzillabrennus wrote: post #3

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...

My girlfriend had a -similar- issue with Shift. She was their first sale in Washington when they expanded up here, and for whatever reason, titling and registration was screwed up repeatedly. What was interesting was that when the temporary tabs expired, rather than extending them, they put her -in a rental- for two -months- and paid those two months payments, -and- gave her $300 for her trouble.

I imagine anyone expanding into a new state expects title issues and budgets for goodwill for the first few customers.
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