5 ms·

Carvana, which bought my car for more than I paid new, has lost 98% of its value

30 points by Amorymeltzer 4y ago

kotaKat 4y ago
I wonder if this will have any impact to the other arms of the DriveTime conglomerate (yes, as much as Carvana is a spinoff, they still rely on Bridgecrest for a lot of loan underwriting and DriveTime processing facilities).
bityard 4y ago
Good. When I was shopping for a used car a couple years ago, I found virtually no good candidates from private sellers because Carvana had completely gutted the second-hand car market where I live. Their business model is to basically corner the market by buying _all_ the available newer used cars (often above book value) from private sellers and dealerships and then advertise the crap out of them on all the usual car listing websites with the goal of being the _only_ option that most people have for buying a used car. I don't have a problem in principle with "no-haggle" dealers in general. Plenty of people don't mind paying more than they have to for a car, just to avoid talking to a stranger. But the way Carvana operates is just begging for some kind of regulation.
- audiometry 4y ago
  >just begging for some kind of regulation. Seems like the market has regulated them quite nicely indeed.
avgDev 4y ago
The way carvana buys cars is INSANE and the return policy is pretty crazy too. I don't see carvana ever being a successful business model as it stands now. No proper inspection at pick-up. Dealers often send people who know their stuff to auctions and they use things like paint meters to check for body work. I worked for a dealer and also painted cars. I could spot repainted panels without tools, and if I could not spot them it was a professional job. Not all accidents are reported and on things like carfax, this is all carvana cares about. The delivery and moving cars across states is not cheap. Returns must be really expensive for carvana.
- MivLives 4y ago
  You're not the first person I've heard that can spot repaints. Is there something obvious that gives them away or is it a more subtle distinction from the rest of the panels?
  - avgDev 4y ago
    As below poster said bright sunlight is required. Some paints are really hard to match, therefore, when you repaint the door you would also father the paint onto fender and quarter panel. Additionally, there is something called "orange peel". Most cars have it, it is extremely difficult to match the original orange peel pattern. Often the new clear coat is wet sanded and then buffed which can completely remove the orange peel. It is quite easy to spot these things by a trained eye, and generally if a one cannot spot repainted panels it is most likely a job well done.
  - Grazester 4y ago
    Something tells me it's down to mostly the quality of the paint work really.
  - rasz 4y ago
    Bright sunlight helps a ton.
- rasz 4y ago
  > I don't see carvana ever being a successful business It is enormously successful at what it was made to do- - scam investors https://seekingalpha.com/instablog/767332-clastic/5659699-carvana-ponzi-collapsing https://seekingalpha.com/instablog/767332-clastic/5659699-ca...
adamredwoods 4y ago
I looked at Carvana before deciding on buying a used car from CarMax. The big problem was that I can not test drive the car from Carvana before committing. The return fee if I didn't buy the car made it too risky. At CarMax, I could see, drive, and smell (darn smokers!), the used car. The "no-haggle" experience at CarMax still turned into a haggle for upgrades, just not the base price.
- midnitewarrior 4y ago
  Carvana lets you test drive your car for 7 days and return it for no fee. What other dealer does that? Yes, you do all the paperwork before you get possession of the car, but you have 7 days to return it for any reason, they even provided a credit towards taking the car to your own mechanic for an inspection if you wanted. I bought from them because they took all the risk out of car buying.
toomuchtodo 4y ago
Carvana was created to enrich its management at shareholder expense. Think a less over the top WeWork. https://www.thedailybeast.com/used-car-billionaire-ernest-garcia-ii-pockets-dollar36b-from-sons-company-carvana https://www.thedailybeast.com/used-car-billionaire-ernest-ga...
derwiki 4y ago
I’m a big fan of autolist.com for purchasing second hand vehicles
aliswe 4y ago
98% of its valuation, I guess. Also prices were crazy during early pandemic times..
boeingUH60 4y ago
The CEO’s dad (also a co-founder) sold shares worth $3.6 billion, so he’s smiling to the bank anyways https://www.wsj.com/articles/ceos-dad-gets-a-3-6-billion-stock-windfall-at-carvana-11631791801 https://www.wsj.com/articles/ceos-dad-gets-a-3-6-billion-sto...

30 points by Amorymeltzer 4y ago

I wonder if this will have any impact to the other arms of the DriveTime conglomerate (yes, as much as Carvana is a spinoff, they still rely on Bridgecrest for a lot of loan underwriting and DriveTime processing facilities).

bityard 4y ago

Good. When I was shopping for a used car a couple years ago, I found virtually no good candidates from private sellers because Carvana had completely gutted the second-hand car market where I live. Their business model is to basically corner the market by buying _all_ the available newer used cars (often above book value) from private sellers and dealerships and then advertise the crap out of them on all the usual car listing websites with the goal of being the _only_ option that most people have for buying a used car. I don't have a problem in principle with "no-haggle" dealers in general. Plenty of people don't mind paying more than they have to for a car, just to avoid talking to a stranger. But the way Carvana operates is just begging for some kind of regulation.

audiometry 4y ago
>just begging for some kind of regulation. Seems like the market has regulated them quite nicely indeed.

avgDev 4y ago

The way carvana buys cars is INSANE and the return policy is pretty crazy too. I don't see carvana ever being a successful business model as it stands now. No proper inspection at pick-up. Dealers often send people who know their stuff to auctions and they use things like paint meters to check for body work. I worked for a dealer and also painted cars. I could spot repainted panels without tools, and if I could not spot them it was a professional job. Not all accidents are reported and on things like carfax, this is all carvana cares about. The delivery and moving cars across states is not cheap. Returns must be really expensive for carvana.

MivLives 4y ago
You're not the first person I've heard that can spot repaints. Is there something obvious that gives them away or is it a more subtle distinction from the rest of the panels?
- avgDev 4y ago
  As below poster said bright sunlight is required. Some paints are really hard to match, therefore, when you repaint the door you would also father the paint onto fender and quarter panel. Additionally, there is something called "orange peel". Most cars have it, it is extremely difficult to match the original orange peel pattern. Often the new clear coat is wet sanded and then buffed which can completely remove the orange peel. It is quite easy to spot these things by a trained eye, and generally if a one cannot spot repainted panels it is most likely a job well done.
- Grazester 4y ago
  Something tells me it's down to mostly the quality of the paint work really.
- rasz 4y ago
  Bright sunlight helps a ton.
rasz 4y ago
> I don't see carvana ever being a successful business It is enormously successful at what it was made to do- - scam investors https://seekingalpha.com/instablog/767332-clastic/5659699-carvana-ponzi-collapsing https://seekingalpha.com/instablog/767332-clastic/5659699-ca...

adamredwoods 4y ago

I looked at Carvana before deciding on buying a used car from CarMax. The big problem was that I can not test drive the car from Carvana before committing. The return fee if I didn't buy the car made it too risky. At CarMax, I could see, drive, and smell (darn smokers!), the used car. The "no-haggle" experience at CarMax still turned into a haggle for upgrades, just not the base price.

midnitewarrior 4y ago
Carvana lets you test drive your car for 7 days and return it for no fee. What other dealer does that? Yes, you do all the paperwork before you get possession of the car, but you have 7 days to return it for any reason, they even provided a credit towards taking the car to your own mechanic for an inspection if you wanted. I bought from them because they took all the risk out of car buying.

toomuchtodo 4y ago

Carvana was created to enrich its management at shareholder expense. Think a less over the top WeWork. https://www.thedailybeast.com/used-car-billionaire-ernest-garcia-ii-pockets-dollar36b-from-sons-company-carvana https://www.thedailybeast.com/used-car-billionaire-ernest-ga...

derwiki 4y ago

I’m a big fan of autolist.com for purchasing second hand vehicles

aliswe 4y ago

98% of its valuation, I guess. Also prices were crazy during early pandemic times..

boeingUH60 4y ago

The CEO’s dad (also a co-founder) sold shares worth $3.6 billion, so he’s smiling to the bank anyways https://www.wsj.com/articles/ceos-dad-gets-a-3-6-billion-stock-windfall-at-carvana-11631791801 https://www.wsj.com/articles/ceos-dad-gets-a-3-6-billion-sto...