151–160 of 229 posts
Earlier quoted context omitted.
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.
Did they restructure or liquidate?
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…
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…
But I want to emphasize, I would have gone to Carvana even if it were considerably more. The trusted, online-only buying experience is just something I'm totally willing to pay for, especially given how extremely awful the normal used-car buying experience is.
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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…
The pain is that people get pulled into negotiations that mix in a bunch of different things (purchase price, trade-in, financing, add-ons) and it's all a bit more than they can comfortably afford.
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Not going to defend Carvana... but most people trust used car dealers about as far as they can throw a full size pickup. Most of the problems with Carvana are the same problems you get at any used car dealer, just magnified by scale. All of the title/registration problems. Financing. Availability. Communication. No better or worse than any random dealer. My first car ever (25+ years ago) I received the wrong plate fr…
That’s a relatively minor one compared to what I’ve heard tell of - imagine buying a new car to only realize they gave you one that didn’t match VINs with all your paperwork - because they had two on the lot and you don’t notice u til you go to sel it years later.
But months pass and they don’t pay it off..
Then, after escalating, they pull a fresh payoff amount directly from your bank and pay that.
Leaving the buyer with either:
a) late payment marks on their credit from the old loan not being kept current with monthly payments, or
b) several months of lost monthly payments towards the loan for a vehicle that is no longer in the buyers possession
Good riddance. Their shady, shady, practices took full advantage of the trust customers need to have in a full service used car dealer. The execs should face legal penalties
Not going to defend Carvana... but most people trust used car dealers about as far as they can throw a full size pickup. Most of the problems with Carvana are the same problems you get at any used car dealer, just magnified by scale. All of the title/registration problems. Financing. Availability. Communication. No better or worse than any random dealer. My first car ever (25+ years ago) I received the wrong plate fr…
They send you into a revolving door of phone associates.
Like comcast, but for cars
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…
I sold two cars to Carvana in the last year and in both cases the offers from Carvana (which included them picking up the car from my driveway) were multiple thousands of dollars better than Carmax or dealerships. Could I have made more selling privately? I don't know, but I can tell you that Carvana paid very handsomely to do all the work involved with buying your car.
Carmax never loses money. Carvana has never earned a profit. It's sort of a big difference!
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Carvana definitely lost money when I sold to them. The car had a lot of minor problems that needed to be addressed if they ever wanted to sell it. When it came to reporting the quality, there were only 3 options. I chose the middle option even though it needed thousands of dollars worth of repairs. The person who picked up my car basically told me that they have no incentive to care so long as if you're obviously bei…
Maybe there is a role for humans in the used car business for the foreseeable future, just because any automated method for assessing used car value runs into the "winner's curse" problem? (Essentially the only people who sell their cars to the automated system are the ones where the automated system offers them the best price, because there's a problem with the car that the automated system isn't picking up on.)
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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…
not the parent, but they probably meant "compared to typical vc-funded startup expected margins". most faangs don't need to ship tons of steel to anybody and their margins are around 25%. can you disrupt used cars given all the logistics of the physical world? maybe, I don't know, but people here report both carmax and carvana having severe business issues, why?
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…
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.
Places like Carmax buy a car, mark it up $2k, and sell it making most of their money on financing and warranty/service stuff. They mark vehicles down something like $500 each month for two months then put it right back on the auction if it doesn't sell (so you'll generally get better deals from vehicles that have been on-lot a while). This is why they refuse to negotiate price.
You may get a slightly better price than the dealership, but not by much when you consider every single factor.
If you want the best possible deal, know the car you're looking for and offer a fixed finder's fee to a mom and pop used dealership to buy it for you. A lot of these smaller dealers will give you a good, fixed rate because it's guaranteed money to them without that normal overhead. It may not be strictly allowed (due to NDAs and such), but some may even allow you to help pick out the vehicle to bid on.