10 ms·

Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

91 points by shaburn 4y ago

wcunning 4y ago
https://archive.ph/99DvI https://archive.ph/99DvI
wcunning 4y ago
This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun sports car since it'll be super affordable?
- shaburn 4y ago
  Yes.
- celestialcheese 4y ago
  Probably more like July. It's going to take a long time for these loans to get liquidated, and then processed through the repo markets. And likely the lenders will hold the repo'd asset longer if they can to not create a glut of vehicles. The way this really get's great for buying repo'd sports cars is if we get forced liquidations from the lenders. It's going to be a bloodbath.
  - nfriedly 4y ago
    According to some video I saw on YouTube, there's already a large number of repossessed vehicles that banks are being very slow to release to the market, because they want to keep the prices high.
    - davewritescode 4y ago
      That's something that works when repossessions are still relatively low. Right now, most people are still employed and car payments are pretty high on the list of must pay bills, right behind mortgages. It's the same thing hedge funds do when taking or exiting a big position, move slowly to avoid spooking the market. If someone like Carvana has to liquidate cars at a loss to keep the lights on, you're going to see a FLOOD of cars hit the market as you'll have a rapidly depreciating asset and nobody will want to hold.
- xnx 4y ago
  Any reason those cars wouldn't sell at the going (probably high) used car rate at the time? e.g. https://publish.manheim.com/content/dam/consulting/ManheimUsedVehicleValueIndex-LineGraph.png https://publish.manheim.com/content/dam/consulting/ManheimUs...
- twblalock 4y ago
  If that was the case, why isn't the same thing happening to Carmax and Vroom and the other Carvana-style used-car dealers? Used car prices are falling and I assume it would hurt all of them, but it seems to be hurting Carvana more than the others.
  - avgDev 4y ago
    Not sure about Vroom, but carmax actually performs proper car inspections before purchase. They are not moving fast and breaking things.
    - reaperducer 4y ago
      Not sure about Vroom, but carmax actually performs proper car inspections before purchase. Those CarMax inspections are so valuable that vultures patrol the parking lot, and if you leave without selling your car, they'll follow you home and make an offer on your car. It happened to me. CarMax said the car was worth $8,500. I wanted to bring in my other car for an evaluation to decide which one to sell. A guy followed me to the grocery store across the street, approached me in the parking lot and started his pitch with, "I'll give you a thousand dollars more than whatever CarMax offered you." I asked him if he wanted to look under the hood and take it for a test drive or anything, and he said he didn't need to, because CarMax had already done the hard work for him. (My life situation changed shortly thereafter and I didn't end up selling either car.)
      - SilasX 4y ago
        Haha. In Austin I hear radio ads from a chain dealer (Henna) where they promise to pay you $500 more than whatever Carmax appraised your car at.
    - SoftTalker 4y ago
      Is there any evidence of this? I assumed they buy cars at wholesale auctions, maybe wash/clean them, and put them on sale, like any used car dealer does. I have asked a couple of used car dealers (not CarMax specificially as there isn't one near here) if they do anything to these cars to prepare them for sale. They just laugh. The margins are not there to repair any problems, so what is the point of inspecting them?
- 1123581321 4y ago
  There isn’t going to be a fire sale. Their margins per car are positive and have only contracted about 20%. The margin isn’t enough to sustain their business, but the cars are priced in line with the market. Worst case, they would restructure in chapter 11 and continue to operate retail as normal.
  - indymike 4y ago
    > There isn’t going to be a fire sale. That depends on the interest to carry a car in inventory. Contracting margins plus increasing "floorplan" (what dealers call the line of credit they use to buy inventory) rates can be devastating.
    - 1123581321 4y ago
      If they can’t carry their inventory, they’ll go to another retailer through wholesale auction or direct buy, and show up for sale elsewhere at market prices. Carvana even owns an auto auction chain, which they bought to secure access to inventory but now might use to preferentially liquidate.
      - indymike 4y ago
        If Carvana isn't moving cars fast enough and is trying to liquidate inventory, just who is going to buy them?
        nradov 4y ago
        Every other used car dealer will buy them. The auto auction market is highly liquid. Buyers have money.
  - femto113 4y ago
    The value of their inventory is plummeting and those margins will continue to contract for however long it takes the last couple of bubble years to work their way through the system. Maybe the brand would survive a bankruptcy, but the equity definitely won't, and the bondholders are going to take a serious haircut too.
- reaperducer 4y ago
  This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities You say "potato," I say "potato."
- rozap 4y ago
  Maybe. Yes, the constrained supply caused a lot of people to overpay for cars, and the average monthly payment for a car surged over the last year. The deep sub prime folks will be struggling, especially as layoffs happen and people with no savings are stuck with a $700/m car payment. Repossessions have already started picking up, and there are reports of huge parking lots being filled with repo'd cars, and those cars failing to sell at auction. Obviously, if the big players can control supply enough, then I don't think there will be a fire sale. But it remains to be seen if they can accomplish that (I'd be surprised, I'll bet they'll have to liquidate and like you say, it'll all come crashing down). In any case, the Carvanas and Carmax type places, as well as unemployed consumers that have a big car payment on a soon-to-be-worth-a-whole-lot-less car are really in deep shit. Smells kind of like 2008, but this time with cars instead of houses. Source: https://www.consumerfinance.gov/about-us/blog/market-monitoring-examining-potential-credit-impact-high-vehicle-costs-for-consumers/ https://www.consumerfinance.gov/about-us/blog/market-monitor...
- dylan604 4y ago
  >Is March of 2023 the right time to pick up I hope so. I've been without a car since just before lockdown in 2020, and it has been long enough (by some time now). It's just an insane time to buy a car, so the time without continues to extend. I might be able to survive another 6 months ;)
sbate1987 4y ago
jmpman 4y ago
That’s a huge impact to the Phoenix job market, which isn’t quite as robust as the bay.
sys_64738 4y ago
Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.
- jchonphoenix 4y ago
  Carvana likely has very few engineers. Most of the employees are in operations facilitating car purchasing, inspecting, pricing, etc.
- thatguy0900 4y ago
  The engineers make a fuss when you ask them to clean and appraise cars and make the website at the same time
  - orangepurple 4y ago
    Kids these days...
  - sumtechguy 4y ago
    Rather detail a car sometimes than deal with Jira.
- dangrossman 4y ago
  The webpage is the simplest part of the business. They need drivers to pick up and deliver cars from every address in the nation. They have a fleet of hundreds of custom car-hauling trucks to maintain. They inspect, appraise, repair, detail and take 3D photographs of half a million cars a year -- that's thousands of mechanics, detailers, photographers. They deal with vehicle registration, state inspections and titling in 50 different states and all the 3000+ counties within. At any given time they have 50-100K vehicles all around the country to track, with lots of them in motion at any given time, a big 24/7 logistics and regulatory problem.
  - kotaKat 4y ago
    I'd be curious to see what amount of the staff is actually lost and from what divisions. I doubt it'll be anyone working on the actual vehicle side of the business. Carvana is a DriveTime spinoff, and leverages their existing infrastructure for all used vehicle processing -- massive warehouse-style facilities designed to process those vehicles as rapidly as possible and stage them around.
joezydeco 4y ago
They've been shut down in Illinois twice and they're still in legal hot water. Blame interest rates and inventory yadda yadda but they've been moving fast and breaking things too long. Their VP is facing 50+ criminal charges in this state alone. https://jalopnik.com/carvanas-legal-counsel-ordered-to-appear-in-illinois-co-1849585120 https://jalopnik.com/carvanas-legal-counsel-ordered-to-appea...
- syspec 4y ago
  Meh, looks like a bunch of regulatory capture by existing auto-dealerships.
  - orangepurple 4y ago
    Failure to transfer title would make me extremely mad as a customer
    - judge2020 4y ago
      > “The State of Illinois has charged me because Carvana delivered a car to a customer’s home,” Breaux said in a statement provided by Carvana. Sounds like they transferred the title but it wasn't "by a dealer", so it was illegal. In addition: > In a separate filing on May 12, the agency charged Breaux with two counts of Carvana operating as an unlicensed used-vehicle dealer. You can of course look up the relevant code on Illinois' wonderful online legislation document: https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=062500050HCh.+3+Art.+III&ActID=1815&ChapterID=49&SeqStart=38600000&SeqEnd=39500000 https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=0625...
    - gbronner 4y ago
      I had the same issue with Beepi. Had a friend who worked there -- I got the sense that complying with a bunch of interstate car sales was rather tricky and they often had issues getting through the state DMVs.
- deleted 4y ago
  [deleted]
mattw2121 4y ago
I've purchased 2 vehicles through Carvana, and honestly the process was fantastic. I feel I got a fair deal on both vehicles, the quality was good, and everything as advertised. I did all the paperwork online and when I showed up to pick the car up was in and out in just a few minutes. The only problem I had was that the delivery tower didn't work when I dropped the coin in both times. First time the car was for me and I didn't really care. The second time it was for my son I would have really liked their gimmick to work.
- benatkin 4y ago
  I've had numerous heavily subsidized Lyft and Uber rides, and it was pretty great. I'm currently a member of WeWork All Access, and it is pretty great. Edit: I think I misinterpreted your review as glowing, but it was just stating your experience. The towers not working is pretty sad. It reflects the company operating in la-la land though.
- davewritescode 4y ago
  This is completely anecdotal but there's been a couple of times during COVID when I was stuck at a light next to a Caravana truck on it's way to drop off a car and I noticed what appeared to be non-trivial issues underneath the car. I just don't get how people can buy a used car without seeing it or sending over a professional to look at it first.
  - doctoboggan 4y ago
    You can return the car in within first 7 days for any reason.
    - lastofthemojito 4y ago
      Doesn't it feel a bit insane to do things in that order though? Most car sellers I've encountered will allow a prospective buyer to take a car to their mechanic to to be looked over BEFORE purchase. The biggest downside here is if you trade your existing car into Carvana. Sure you've got 7 days to get that newly-purchased car inspected, but what happens when you get the inspection results back and decide you want to unwind the transaction - Carvana will take back the car you purchased but they will not bring your trade-in back to you. Not to mention the general paperwork hassle and the hit to your credit score (if you're financing), all for a car you're not keeping.
throwaway2729 4y ago
Can one negotiate with Carvana?
- WalterSobchak 4y ago
  No. https://www.carvana.com/help/carvana-inventory/are-carvanas-vehicle-prices-negotiable https://www.carvana.com/help/carvana-inventory/are-carvanas-...
  - throwaway2729 4y ago
    That's a bummer. Wonder how many cars are sitting unsold.
bwi4 4y ago
I find it interesting that Carvana's CEO is the son of DriveTime's CEO. https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-ex-con-became-a-billionaire-from-used-cars/ https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-e... edit: space
gbronner 4y ago
The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this. As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation. That is an insane move on a durable asset.
- QuarterReptile 4y ago
  I was just looking into the market for my own comparison. I bought a 9 year old minivan back in January, and I can't find any deals quite as good as what I got (granted, I spent a few weeks finding that.) So I guess in my area (Virginia) I upgraded at a good time. I'll confirm your sale anecdote though. I sold a 16 year old car in May for 19% more than I paid for it in 2018, having driven it about 45,000 miles over that time (120K -> 165K)
- wilsonnb3 4y ago
  The concept is great but I never really saw the point of Carvana when CarMax already exists. Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.
  - bagels 4y ago
    Carvana came to my house and picked up the car I was selling. It was all done in a few minutes. I didn't have to take any pictures, just describe it on the web form, and sign some papers when they showed up.
    - bilsbie 4y ago
      Getting a quote just by entering your license plate was also brilliant.
    - lancesells 4y ago
      Certainly shocking that they are struggling with excess inventory and need to cut jobs.
zachshefska 4y ago
Carvana is destined for acquisition or bankruptcy. They have WAY too much inventory that they overpaid for. Consumer demand has plummeted and new car supply is bouncing back (up 78% year over year). They have too much debt on their books to make the model work. Good thing the CEOs dad cashed out when he did.
woeirua 4y ago
All of the iBuyer like companies are going bankrupt. Turns out there just no way to cut costs enough to make a profit in these low margin, capital and asset intensive industries. The idea that Carvana, OpenDoor, Redfin, Zillow, etc. were ever going to achieve something like a monopoly over their respective industry was laughable at best. Doomed from the moment they opened the doors.
- nlvbkdfsaldsa2 4y ago
  Carmax is very successful, not sure what they have to do with these tech companies
  - woeirua 4y ago
    Whoops, didn't know that they were that profitable. My bad.
nlvbkdfsaldsa2 4y ago
Had a pretty bad experience trying to sell a car to them so not surprising

91 points by shaburn 4y ago

https://archive.ph/99DvI https://archive.ph/99DvI

This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun sports car since it'll be super affordable?

shaburn 4y ago
Yes.
celestialcheese 4y ago
Probably more like July. It's going to take a long time for these loans to get liquidated, and then processed through the repo markets. And likely the lenders will hold the repo'd asset longer if they can to not create a glut of vehicles. The way this really get's great for buying repo'd sports cars is if we get forced liquidations from the lenders. It's going to be a bloodbath.
- nfriedly 4y ago
  According to some video I saw on YouTube, there's already a large number of repossessed vehicles that banks are being very slow to release to the market, because they want to keep the prices high.
  - davewritescode 4y ago
    That's something that works when repossessions are still relatively low. Right now, most people are still employed and car payments are pretty high on the list of must pay bills, right behind mortgages. It's the same thing hedge funds do when taking or exiting a big position, move slowly to avoid spooking the market. If someone like Carvana has to liquidate cars at a loss to keep the lights on, you're going to see a FLOOD of cars hit the market as you'll have a rapidly depreciating asset and nobody will want to hold.
xnx 4y ago
Any reason those cars wouldn't sell at the going (probably high) used car rate at the time? e.g. https://publish.manheim.com/content/dam/consulting/ManheimUsedVehicleValueIndex-LineGraph.png https://publish.manheim.com/content/dam/consulting/ManheimUs...
twblalock 4y ago
If that was the case, why isn't the same thing happening to Carmax and Vroom and the other Carvana-style used-car dealers? Used car prices are falling and I assume it would hurt all of them, but it seems to be hurting Carvana more than the others.
- avgDev 4y ago
  Not sure about Vroom, but carmax actually performs proper car inspections before purchase. They are not moving fast and breaking things.
  - reaperducer 4y ago
    Not sure about Vroom, but carmax actually performs proper car inspections before purchase. Those CarMax inspections are so valuable that vultures patrol the parking lot, and if you leave without selling your car, they'll follow you home and make an offer on your car. It happened to me. CarMax said the car was worth $8,500. I wanted to bring in my other car for an evaluation to decide which one to sell. A guy followed me to the grocery store across the street, approached me in the parking lot and started his pitch with, "I'll give you a thousand dollars more than whatever CarMax offered you." I asked him if he wanted to look under the hood and take it for a test drive or anything, and he said he didn't need to, because CarMax had already done the hard work for him. (My life situation changed shortly thereafter and I didn't end up selling either car.)
    - SilasX 4y ago
      Haha. In Austin I hear radio ads from a chain dealer (Henna) where they promise to pay you $500 more than whatever Carmax appraised your car at.
  - SoftTalker 4y ago
    Is there any evidence of this? I assumed they buy cars at wholesale auctions, maybe wash/clean them, and put them on sale, like any used car dealer does. I have asked a couple of used car dealers (not CarMax specificially as there isn't one near here) if they do anything to these cars to prepare them for sale. They just laugh. The margins are not there to repair any problems, so what is the point of inspecting them?
1123581321 4y ago
There isn’t going to be a fire sale. Their margins per car are positive and have only contracted about 20%. The margin isn’t enough to sustain their business, but the cars are priced in line with the market. Worst case, they would restructure in chapter 11 and continue to operate retail as normal.
- indymike 4y ago
  > There isn’t going to be a fire sale. That depends on the interest to carry a car in inventory. Contracting margins plus increasing "floorplan" (what dealers call the line of credit they use to buy inventory) rates can be devastating.
  - 1123581321 4y ago
    If they can’t carry their inventory, they’ll go to another retailer through wholesale auction or direct buy, and show up for sale elsewhere at market prices. Carvana even owns an auto auction chain, which they bought to secure access to inventory but now might use to preferentially liquidate.
    - indymike 4y ago
      If Carvana isn't moving cars fast enough and is trying to liquidate inventory, just who is going to buy them?
      - nradov 4y ago
        Every other used car dealer will buy them. The auto auction market is highly liquid. Buyers have money.
- femto113 4y ago
  The value of their inventory is plummeting and those margins will continue to contract for however long it takes the last couple of bubble years to work their way through the system. Maybe the brand would survive a bankruptcy, but the equity definitely won't, and the bondholders are going to take a serious haircut too.
reaperducer 4y ago
This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities You say "potato," I say "potato."
rozap 4y ago
Maybe. Yes, the constrained supply caused a lot of people to overpay for cars, and the average monthly payment for a car surged over the last year. The deep sub prime folks will be struggling, especially as layoffs happen and people with no savings are stuck with a $700/m car payment. Repossessions have already started picking up, and there are reports of huge parking lots being filled with repo'd cars, and those cars failing to sell at auction. Obviously, if the big players can control supply enough, then I don't think there will be a fire sale. But it remains to be seen if they can accomplish that (I'd be surprised, I'll bet they'll have to liquidate and like you say, it'll all come crashing down). In any case, the Carvanas and Carmax type places, as well as unemployed consumers that have a big car payment on a soon-to-be-worth-a-whole-lot-less car are really in deep shit. Smells kind of like 2008, but this time with cars instead of houses. Source: https://www.consumerfinance.gov/about-us/blog/market-monitoring-examining-potential-credit-impact-high-vehicle-costs-for-consumers/ https://www.consumerfinance.gov/about-us/blog/market-monitor...
dylan604 4y ago
>Is March of 2023 the right time to pick up I hope so. I've been without a car since just before lockdown in 2020, and it has been long enough (by some time now). It's just an insane time to buy a car, so the time without continues to extend. I might be able to survive another 6 months ;)

sbate1987 4y ago

jmpman 4y ago

That’s a huge impact to the Phoenix job market, which isn’t quite as robust as the bay.

sys_64738 4y ago

Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.

jchonphoenix 4y ago
Carvana likely has very few engineers. Most of the employees are in operations facilitating car purchasing, inspecting, pricing, etc.
thatguy0900 4y ago
The engineers make a fuss when you ask them to clean and appraise cars and make the website at the same time
- orangepurple 4y ago
  Kids these days...
- sumtechguy 4y ago
  Rather detail a car sometimes than deal with Jira.
dangrossman 4y ago
The webpage is the simplest part of the business. They need drivers to pick up and deliver cars from every address in the nation. They have a fleet of hundreds of custom car-hauling trucks to maintain. They inspect, appraise, repair, detail and take 3D photographs of half a million cars a year -- that's thousands of mechanics, detailers, photographers. They deal with vehicle registration, state inspections and titling in 50 different states and all the 3000+ counties within. At any given time they have 50-100K vehicles all around the country to track, with lots of them in motion at any given time, a big 24/7 logistics and regulatory problem.
- kotaKat 4y ago
  I'd be curious to see what amount of the staff is actually lost and from what divisions. I doubt it'll be anyone working on the actual vehicle side of the business. Carvana is a DriveTime spinoff, and leverages their existing infrastructure for all used vehicle processing -- massive warehouse-style facilities designed to process those vehicles as rapidly as possible and stage them around.

joezydeco 4y ago

They've been shut down in Illinois twice and they're still in legal hot water. Blame interest rates and inventory yadda yadda but they've been moving fast and breaking things too long. Their VP is facing 50+ criminal charges in this state alone. https://jalopnik.com/carvanas-legal-counsel-ordered-to-appear-in-illinois-co-1849585120 https://jalopnik.com/carvanas-legal-counsel-ordered-to-appea...

syspec 4y ago
Meh, looks like a bunch of regulatory capture by existing auto-dealerships.
- orangepurple 4y ago
  Failure to transfer title would make me extremely mad as a customer
  - judge2020 4y ago
    > “The State of Illinois has charged me because Carvana delivered a car to a customer’s home,” Breaux said in a statement provided by Carvana. Sounds like they transferred the title but it wasn't "by a dealer", so it was illegal. In addition: > In a separate filing on May 12, the agency charged Breaux with two counts of Carvana operating as an unlicensed used-vehicle dealer. You can of course look up the relevant code on Illinois' wonderful online legislation document: https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=062500050HCh.+3+Art.+III&ActID=1815&ChapterID=49&SeqStart=38600000&SeqEnd=39500000 https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=0625...
  - gbronner 4y ago
    I had the same issue with Beepi. Had a friend who worked there -- I got the sense that complying with a bunch of interstate car sales was rather tricky and they often had issues getting through the state DMVs.
deleted 4y ago
[deleted]

mattw2121 4y ago

I've purchased 2 vehicles through Carvana, and honestly the process was fantastic. I feel I got a fair deal on both vehicles, the quality was good, and everything as advertised. I did all the paperwork online and when I showed up to pick the car up was in and out in just a few minutes. The only problem I had was that the delivery tower didn't work when I dropped the coin in both times. First time the car was for me and I didn't really care. The second time it was for my son I would have really liked their gimmick to work.

benatkin 4y ago
I've had numerous heavily subsidized Lyft and Uber rides, and it was pretty great. I'm currently a member of WeWork All Access, and it is pretty great. Edit: I think I misinterpreted your review as glowing, but it was just stating your experience. The towers not working is pretty sad. It reflects the company operating in la-la land though.
davewritescode 4y ago
This is completely anecdotal but there's been a couple of times during COVID when I was stuck at a light next to a Caravana truck on it's way to drop off a car and I noticed what appeared to be non-trivial issues underneath the car. I just don't get how people can buy a used car without seeing it or sending over a professional to look at it first.
- doctoboggan 4y ago
  You can return the car in within first 7 days for any reason.
  - lastofthemojito 4y ago
    Doesn't it feel a bit insane to do things in that order though? Most car sellers I've encountered will allow a prospective buyer to take a car to their mechanic to to be looked over BEFORE purchase. The biggest downside here is if you trade your existing car into Carvana. Sure you've got 7 days to get that newly-purchased car inspected, but what happens when you get the inspection results back and decide you want to unwind the transaction - Carvana will take back the car you purchased but they will not bring your trade-in back to you. Not to mention the general paperwork hassle and the hit to your credit score (if you're financing), all for a car you're not keeping.

throwaway2729 4y ago

Can one negotiate with Carvana?

WalterSobchak 4y ago
No. https://www.carvana.com/help/carvana-inventory/are-carvanas-vehicle-prices-negotiable https://www.carvana.com/help/carvana-inventory/are-carvanas-...
- throwaway2729 4y ago
  That's a bummer. Wonder how many cars are sitting unsold.

bwi4 4y ago

I find it interesting that Carvana's CEO is the son of DriveTime's CEO. https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-ex-con-became-a-billionaire-from-used-cars/ https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-e... edit: space

gbronner 4y ago

The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this. As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation. That is an insane move on a durable asset.

QuarterReptile 4y ago
I was just looking into the market for my own comparison. I bought a 9 year old minivan back in January, and I can't find any deals quite as good as what I got (granted, I spent a few weeks finding that.) So I guess in my area (Virginia) I upgraded at a good time. I'll confirm your sale anecdote though. I sold a 16 year old car in May for 19% more than I paid for it in 2018, having driven it about 45,000 miles over that time (120K -> 165K)
wilsonnb3 4y ago
The concept is great but I never really saw the point of Carvana when CarMax already exists. Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.
- bagels 4y ago
  Carvana came to my house and picked up the car I was selling. It was all done in a few minutes. I didn't have to take any pictures, just describe it on the web form, and sign some papers when they showed up.
  - bilsbie 4y ago
    Getting a quote just by entering your license plate was also brilliant.
  - lancesells 4y ago
    Certainly shocking that they are struggling with excess inventory and need to cut jobs.

zachshefska 4y ago

Carvana is destined for acquisition or bankruptcy. They have WAY too much inventory that they overpaid for. Consumer demand has plummeted and new car supply is bouncing back (up 78% year over year). They have too much debt on their books to make the model work. Good thing the CEOs dad cashed out when he did.

woeirua 4y ago

All of the iBuyer like companies are going bankrupt. Turns out there just no way to cut costs enough to make a profit in these low margin, capital and asset intensive industries. The idea that Carvana, OpenDoor, Redfin, Zillow, etc. were ever going to achieve something like a monopoly over their respective industry was laughable at best. Doomed from the moment they opened the doors.

nlvbkdfsaldsa2 4y ago
Carmax is very successful, not sure what they have to do with these tech companies
- woeirua 4y ago
  Whoops, didn't know that they were that profitable. My bad.

nlvbkdfsaldsa2 4y ago

Had a pretty bad experience trying to sell a car to them so not surprising