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Carvana puts a ridiculous mark-up on used cars - I'm talking several thousand more then the same car brand NEW in some cases. Further their inspection process l

Carvana puts a ridiculous mark-up on used cars - I'm talking several thousand more then the same car brand NEW in some cases. Further their inspection process leaves a lot to be desired, and best practice is to take the car for inspection after receiving it for how often they "miss" things. It just does not make sense to throw thousands of dollars away to save a couple hours at a dealership.

xfitm3 5y ago
Used car prices are skyrocketing. It's a function of the market. Compare apples to apples - used prices are higher on other sites, too.
- tmp_anon_22 5y ago
  > Used car prices are skyrocketing Yup, any car buying right now is going to cost extra - but even in that context Carvana overcharges (and offers laughable financing). IMO - I spent the past 3 months researching this topic for my own purchase, limited mostly to sedans and cross-overs.
  - onlyrealcuzzo 5y ago
    I don't get it. People in the market for used cars are presumably price sensitive - at least more so than new car buyers - who are already quite price sensitive. Who are the used car buyers that are paying 20% more and getting bad financing terms? Are they selling a lot of cars to subprime buyers?
    - rootsudo 5y ago
      They are also falling for the User Experience, much similar to what car max started with "no haggle" pricing, no needing to wait fir F&I from the dealer, etc. That's it - same old processes, but they have the UX to make it "nice." And people are paying a premium for that.
      - jjeaff 5y ago
        It's an amazingly high premium. I just looked up the same car I just bought last week from a used car dealer for $13.5k. Same model, year, trim and pretty close mileage are on Caravana, listed at $19k and $21k. So a 50% premium.
        rootsudo 5y ago
        They're using the same idealogy of overpricing stuff and listing it in Amazon, so they have the first exposure, even if most expensive, it's most convinient. I, value 50% of the car's price and don't mind spending 3-6 hours to save $10,000~ but many people, simply have an old car, the mechanic says it needs a new engine, they have a shift working minimum wage-esque and go with the first option of visibility thinking it's a good deal. Financially poor, financially ignorant and time poor. The perfect American customer.
        jjeaff 5y ago
        I think it is more likely they are targeting budget conscious people that are busy with a high paying white collar job and who don't have the time to visit dealers and haggle and want the luxury of just coming home and having the car delivered.
        anchpop 5y ago
        I agree with all that except financially poor. Most sellers I imagine would prefer their clients be wealthy (because wealthy people on average value a marginal dollar less)
      - subpixel 5y ago
        The Carvana UX is smart and coercive. You get a (possibly artificial) time block to buy the car, which I’m sure drives conversions.
    - jdavis703 5y ago
      People are starting to take out 6 and 7 year auto loans. Some people only look at the monthly payment to figure out if they can afford the car. Because of this, some “budget conscious” buyers are effectively price insensitive.
      - baldeagle 5y ago
        Convincing a buyer to be a ‘payment’ buyer is an old trick in the car market. Don’t fall for it - always buy on price and then let the payments work out. With all the online calculators and soft pull applications (no credit hit, but accurate prices) it should be strait forward to figure out roughly what you can afford. If it seems like magic, it likely is.
    - throwaway0a5e 5y ago
      A huge fraction of the used car market is not price sensitive. They are the same old idiots who finance a boat at 20%. The reason they're in the used car market is because they've been told their whole lives that depreciation is for suckers and therefore they should buy a used car. They aren't price sensitive, they're just doing what they think they're supposed to be doing.
  - flurben 5y ago
    I bought from carvana 2 years ago because they had: A. Lower interest rates than the local credit union or the banks, and B. Better prices on the vehicle I wanted than anyone else in the area.
    - milesdyson_phd 5y ago
      I had the same experience. Granted, the market is completely different today than it was even a year ago.
throwawayboise 5y ago
Best to avoid dealerships altogether. They all have their markups. Have cash in hand and shop private sellers on local CL or Facebook. An exception might be if you live in a rust belt area where they salt the roads in the winter. Then you might need to go to a dealer who sources southern cars.
- jcims 5y ago
  Private sellers around here are even more optimistic about what their used stuff is worth. It's bad with cars and trucks, even worse with off road vehicles.
  - User23 5y ago
    That's because people are getting those prices, if they're even willing to sell at all. The used truck and tractor market is extremely hot. In fact, older tractors can be worth even more than new ones in the same class, because they are much less expensive to maintain and repair. Probably the best way to get used trucks, if you are an astute buyer, is to go to estate auctions, but that's obviously much less convenient than FB marketplace or what have you.
rootsudo 5y ago
Yep, they do value add on and make it "zero" fees and then want you to use their financing option so they can sell your financing among others in a contract very similar to a CDO that has an expected depreciation curve (with high APR)
jseliger 5y ago
Six months ago, I was considering buying a car from Carvana or similar, and their prices didn't seem outrageous: the market was also much more liquid than any other I was aware of. The difference wasn't just a "couple hours" at a dealership—it was all in time and attention. I wound up with a new Tesla, partially because used car prices were so high. The amount of time and attention buying cars still commands, in most cases, is ridiculous, and the efforts of Carvana to lower both, however imperfect, is commendable.
- Grazester 5y ago
  I was searching Carnava also a month ago for a Crossover and their prices were better than the used car lots in my area. The price difference was about $3000 cheaper for lower mileage of the same year vehicle.
ineedasername 5y ago
That's not necessarily Carvana. Near me dealerships are calling up people halfway through their lease asking to buy them out at a profit to the leasee, and are then selling those cars at a higher price than new cars-- because the have almost no new cars to sell. That's just the market we're in right now. I recently sold my car on a trade-in for 2x the price it was worth 2 years ago when I've looked at things.
jonnycomputer 5y ago
Where I am, If I want to buy an EV then either I'm going to have to make a long trip, or I'll buy from Carvana. Other options?
- hans-moleman 5y ago
  Most dealerships will deliver a car if you ask.

xfitm3 5y ago

Used car prices are skyrocketing. It's a function of the market. Compare apples to apples - used prices are higher on other sites, too.

tmp_anon_22 5y ago
> Used car prices are skyrocketing Yup, any car buying right now is going to cost extra - but even in that context Carvana overcharges (and offers laughable financing). IMO - I spent the past 3 months researching this topic for my own purchase, limited mostly to sedans and cross-overs.
- onlyrealcuzzo 5y ago
  I don't get it. People in the market for used cars are presumably price sensitive - at least more so than new car buyers - who are already quite price sensitive. Who are the used car buyers that are paying 20% more and getting bad financing terms? Are they selling a lot of cars to subprime buyers?
  - rootsudo 5y ago
    They are also falling for the User Experience, much similar to what car max started with "no haggle" pricing, no needing to wait fir F&I from the dealer, etc. That's it - same old processes, but they have the UX to make it "nice." And people are paying a premium for that.
    - jjeaff 5y ago
      It's an amazingly high premium. I just looked up the same car I just bought last week from a used car dealer for $13.5k. Same model, year, trim and pretty close mileage are on Caravana, listed at $19k and $21k. So a 50% premium.
      - rootsudo 5y ago
        They're using the same idealogy of overpricing stuff and listing it in Amazon, so they have the first exposure, even if most expensive, it's most convinient. I, value 50% of the car's price and don't mind spending 3-6 hours to save $10,000~ but many people, simply have an old car, the mechanic says it needs a new engine, they have a shift working minimum wage-esque and go with the first option of visibility thinking it's a good deal. Financially poor, financially ignorant and time poor. The perfect American customer.
        jjeaff 5y ago
        I think it is more likely they are targeting budget conscious people that are busy with a high paying white collar job and who don't have the time to visit dealers and haggle and want the luxury of just coming home and having the car delivered.
        anchpop 5y ago
        I agree with all that except financially poor. Most sellers I imagine would prefer their clients be wealthy (because wealthy people on average value a marginal dollar less)
    - subpixel 5y ago
      The Carvana UX is smart and coercive. You get a (possibly artificial) time block to buy the car, which I’m sure drives conversions.
  - jdavis703 5y ago
    People are starting to take out 6 and 7 year auto loans. Some people only look at the monthly payment to figure out if they can afford the car. Because of this, some “budget conscious” buyers are effectively price insensitive.
    - baldeagle 5y ago
      Convincing a buyer to be a ‘payment’ buyer is an old trick in the car market. Don’t fall for it - always buy on price and then let the payments work out. With all the online calculators and soft pull applications (no credit hit, but accurate prices) it should be strait forward to figure out roughly what you can afford. If it seems like magic, it likely is.
  - throwaway0a5e 5y ago
    A huge fraction of the used car market is not price sensitive. They are the same old idiots who finance a boat at 20%. The reason they're in the used car market is because they've been told their whole lives that depreciation is for suckers and therefore they should buy a used car. They aren't price sensitive, they're just doing what they think they're supposed to be doing.
- flurben 5y ago
  I bought from carvana 2 years ago because they had: A. Lower interest rates than the local credit union or the banks, and B. Better prices on the vehicle I wanted than anyone else in the area.
  - milesdyson_phd 5y ago
    I had the same experience. Granted, the market is completely different today than it was even a year ago.

throwawayboise 5y ago

Best to avoid dealerships altogether. They all have their markups. Have cash in hand and shop private sellers on local CL or Facebook. An exception might be if you live in a rust belt area where they salt the roads in the winter. Then you might need to go to a dealer who sources southern cars.

jcims 5y ago
Private sellers around here are even more optimistic about what their used stuff is worth. It's bad with cars and trucks, even worse with off road vehicles.
- User23 5y ago
  That's because people are getting those prices, if they're even willing to sell at all. The used truck and tractor market is extremely hot. In fact, older tractors can be worth even more than new ones in the same class, because they are much less expensive to maintain and repair. Probably the best way to get used trucks, if you are an astute buyer, is to go to estate auctions, but that's obviously much less convenient than FB marketplace or what have you.

rootsudo 5y ago

Yep, they do value add on and make it "zero" fees and then want you to use their financing option so they can sell your financing among others in a contract very similar to a CDO that has an expected depreciation curve (with high APR)

jseliger 5y ago

Six months ago, I was considering buying a car from Carvana or similar, and their prices didn't seem outrageous: the market was also much more liquid than any other I was aware of. The difference wasn't just a "couple hours" at a dealership—it was all in time and attention. I wound up with a new Tesla, partially because used car prices were so high. The amount of time and attention buying cars still commands, in most cases, is ridiculous, and the efforts of Carvana to lower both, however imperfect, is commendable.

Grazester 5y ago
I was searching Carnava also a month ago for a Crossover and their prices were better than the used car lots in my area. The price difference was about $3000 cheaper for lower mileage of the same year vehicle.

ineedasername 5y ago

That's not necessarily Carvana. Near me dealerships are calling up people halfway through their lease asking to buy them out at a profit to the leasee, and are then selling those cars at a higher price than new cars-- because the have almost no new cars to sell. That's just the market we're in right now. I recently sold my car on a trade-in for 2x the price it was worth 2 years ago when I've looked at things.

jonnycomputer 5y ago

Where I am, If I want to buy an EV then either I'm going to have to make a long trip, or I'll buy from Carvana. Other options?

hans-moleman 5y ago
Most dealerships will deliver a car if you ask.