4 ms·

> 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 fi

> 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.

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.