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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

#191

Post by jjav »

Skates1616 wrote: post #162
bombcar wrote: post #120

Earlier quoted context omitted.

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.

You will need a title to the car if you ever want to get rid of it, it’s even needed at a junk yard. You won’t get a title without making the payments…

You don't necessarily always need a title, just write a Bill of Sale to the buyer. This is fairly common particularly with older cars or cars that have been converted to racecars (but still quite street-legal).

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

#192

Post by gmd63 »

hgdfhgdfhgf wrote: post #170
gmd63 wrote: post #142

Earlier 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…

Whether an VC firm engages in subsidies for its clients or whether a government engages in subsidies for its electorate, money is being spent to distort market prices and that adds friction to accurate market pricing. It's weird to identify issues with the tactic and then arbitrarily say one entity doing it is bad when its OK if the other one does it.

If the government damages the economy with subsidies, those responsible might have more difficulty getting elected. If a VC firm dumps a juiced bag on S&P index fund buyers while causing a bunch of trouble for taxi companies and first time homebuyers, are any of their clients going to be pissed? My guess is they'll probably congratulate them on a job well done.

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

#193

Post by yurishimo »

projektfu wrote: post #127
TrueSlacker0 wrote: post #69

Earlier quoted context omitted.

I have an old (2006) taco at the moment and have had it over a decade now. It's been perfect. I don't want a larger tundra, I have no need for it. In fact I wish Toyota made a smaller truck. I still need all 4 doors and 5 seats but less width and less length. Perhaps the width of a rav 4, and a even shorter 4ft bed (instead of 5 on taco and 6 on tundra). Essentially like the very old 1990s Ford rangers were, but made…

I wonder how the Fiat Strada would do in the US.

The Hyundai Santa Cruz is pretty similar to a Strada. From what I can remember, they aren't selling particularly well, but it's been a while since I looked. The Ford Maverick on the other hand is going like hotcakes. A bit bigger, but not outrageously so.

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

#194

Post by fragmede »

jjav wrote: post #190
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…

> 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.

Don't worry, they don't really need your SSN to pull your credit report anymore.

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

#195

Post by bsagdiyev »

KennyBlanken wrote: post #72
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.

...and this translated into very poor quality vehicles because they couldn't afford proper inspections and repairs (don't have to fix what you don't find! Let the customer sort it out! And be incredibly annoying to contact, so they maybe just go away...ie the Google model of customer service!) and their on-the-road staff were horribly trained. There are multiple videos out there of Carvana staff dropping people's "ne…

Not sure why you were downvoted. They got their Raleigh (Wake County) license revoked for a while for selling cars with Virginia, South Carolina and Georgia titles IN North Carolina. Cars weren't passing basic safety inspection and sometimes they didn't even provide the title after months!

Transferring an out of state title in NC hits you with a road tax up to a defined upper limit ($400 I believe is the absolute highest) based on car value and state you transfer from, so they likely did this to avoid paying that sales tax themselves before selling the car. It's shady as hell.

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

#196

Post by dsfyu404ed »

version_five wrote: post #46
donw wrote: post #26

Earlier quoted context omitted.

Why'd you go for the Taco over a Tundra?

A lot of people want a pickup but don't need a full size truck. Tacoma fills this niche - probably more people that have big pickups would have all their needs met with a tacoma sized one. Though it feels like all trucks have scaled up massively over the past 20 years and a 2020 tacoma is probably as big as a 2000 F150.

>Tacoma fills this niche

...at roughly the same price as a full size truck which is pretty much a non-starter for anyone who cares.

The Colorado actually fills that niche at an acceptable price poiont.

The Tacoma costs what a fullsize truck does and you buy one if you don't want a half ton for image reasons but also won't buy domestic because that's what upper middle class people have been trained not to do.

>probably more people that have big pickups would have all their needs met with a tacoma sized one.

People buy full size trucks because if they did their "once a month max usage" routine with a smaller truck you would be chastising them for "being unsafe" instead.

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

#197

Post by phphphphp »

hn_throwaway_99 wrote: post #153
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…

I'm not really sure I agree with your argument. It seems quite clear that what has really contributed to Carvana tanking over the past year was they vastly mispriced their product. What happened to Carvana is essentially exactly what happened to other companies that misjudged the effect of the pandemic, e.g. Zillow with their bad experiment with house flipping (paid too much for houses) and Bright Health (vastly unde…

Depending on exactly when you bought your car from Carvana, Carvana likely lost between $2,000 and $5,000 on your purchase. Carvana has never made money on selling cars. If you're willing to pay $5,000 more for a used car because you'd like good service, then there are a great deal of options available to you. The simplest option is to go to a reputable dealership that focuses on customer service (which have existed and continue to exist!) or you could find a legacy player that is moving into the space. Elsewhere in this thread, someone mentioned that they recently had a great experience with CarMax.

At its core, my argument is that there is a sweet spot in which you can get great service from these "boring industry + technology + money" companies but that's because they're actively pursuing good customer service at any cost with no consideration for making money. As soon as the company (or its investors) realise this behaviour is unsustainable, they forget all about their narrative and go all in on making money -- which is when the quality of the service slips.

The amount you pay to Carvana (more or less than you'd pay elsewhere) doesn't have a relationship to the quality of service you will receive, because it's not a "normal" business.

There can be positive consumer outcomes from companies that approach business like Carvana: in the short term, customers get investor-subsidised products, and in the long term, other players in the industry get to learn from consumer reception (e.g: CarMax probably learned about demand for higher quality service from what Carvana demonstrated early on) but Carvana specifically is doomed to failure because it isn't a sustainable company that made a bad decision during the pandemic... it's been unsustainable its entire life.

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

#198

Post by robertlagrant »

Apocryphon wrote: post #188
hgdfhgdfhgf wrote: post #170

Earlier quoted context omitted.

"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.

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"?

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

#199

Post by geeB »

My experiences were so different from

> as Carvana was able to undercut its brick-and-mortar competition with vehicle prices.

that I’m not sure how to make sense of it.

Right before Covid I was shopping for a used car, and I remember their prices being outrageously higher than dealerships. I’m talking saving a few thousands dollars just by taking the dealer’s initial price without negotiating.

Similar scenario just a couple of months ago, I was looking to sell and again reading how well they pay I got a quote… and it was less than half of the first number a dealer threw out (this was a really old and cheap car tbf, I don’t expect it to be that bad for more expensive ones).

Either way, I always wondered how they possibly stayed in business, since it seemed weird that so many people would pay so much for the privilege of being ripped off a lot by some far away corporation, instead of having a person in front of you ripping you off a little.

I deeply hate the dealership experience, but the bad feeling/buyer’s remorse wears off in a couple of days and I’d rather enjoy the extra money in my pocket.

It’s very illuminating to me seeing the comments in this thread shedding some light into what people liked about Carvana and how they were being too generous with returns and losing money at scale. That makes some sense at least. But whenever articles talk about their good prices, it feels like a buried ad.

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

#200

Post by scarface74 »

whakim wrote: post #185
scarface74 wrote: post #80

Earlier quoted context omitted.

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 o…

Carmax does a thorough enough inspection at their shop with trained mechanics beforehand.
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