As Carvana crashes, used car dealers, not buyers, stand to win big
181–190 of 229 posts
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#182[dead]
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#183Earlier 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…
[deleted]
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#184[dead]
There's porn sites that use all kinds of random keywords. This isn't a new thing, and it'd be appreciated if you could clearly mark links like this one as NSFW.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#185Earlier quoted context omitted.
I don't actually think buying cars sight unseen is the main obstacle here, because what you're describing (folks taking advantage of the system) represents a tiny percentage of transactions. I think the biggest issue is that you've taken a business which has notoriously low margins (used cars) and you're operating on the lowest margin end on both sides. On the sell side you're buying cars that would otherwise be sold…
The problem is that like with OpenDoor, asymmetrical information favors the seller. If I know I can get a better deal, I’m not going to use Carvana or OpenDoor. If I know there is something wrong with my car/house I’m going with Carvana/OpenDoor.
But everyone knows they can get a better deal than Carvana/Carmax/etc. - they're selling to Carvana because it's convenient.
In theory, Akerlof's lemon theory could lead to a situation in which Carvana has to underpay to account for all the lemons they're buying to the point that sellers aren't willing to take the hit. In practice, I think this just isn't a big deal - they aren't buying enough lemons to move their offer prices much, and the convenience factor is worth quite a lot of money to sellers. If this was truly a major issue I think we'd see it with CarMax who are wildly successful.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#186Earlier quoted context omitted.
Go through car buying services then report the dealership to the car buying service when you encounter a bait cars and scams.
Do car buying services do anything about these reports? It seems like pretty much every dealer bait-and-switches.
Car buying services will eventually drop them from their list of dealerships if they get enough complaints.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#187I 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 buying experience was simply excellent for me
No doubt, because a company that operates at a loss on VC money and passes the savings on to the consumer, can easily provide a great experience/price.
Take advante of those companies while they exist, but be clear that they can't continue for very long. Either VC money runs out and they disappear or they go public and must start making a profit by increasing prices and slashing service.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#188Earlier quoted context omitted.
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,…
"It's ironic that free market types are completely for subsidies when the private industry does it, although public and private subsidies both have issues." This analogy is strange. Free market types aren't against private investors throwing private money at bad investments nor would they want any regulations against it. "At least government subsidies have a benevolent intent usually." Government subsidies aren't kno…
> 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.
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#189Earlier quoted context omitted.
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
when you skew the incentives in the economy such that people focus on developing skills that are based on artificially juiced things that aren't actually that valuable (see Axie Infinity) it's bad for folks' livelihoods long term
Re: As Carvana crashes, used car dealers, not buyers, stand to win big
#190Earlier 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…
> Enter your bank account number and social security.
Really? That would be a 100% show-stopper for me. They absolutely don't need to know such highly private information.
I'll stick with cragislist and paying cash, which is how I've bought every car I've bought in the last ~16 years.