Carvana to Boost Capacity, Betting Online Car Sales Are Here to Stay


Yaj Yak

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Used car dealer Carvana Co. is investing $500 million in new facilities and hiring thousands of employees, betting that recent consumer shifts toward buying vehicles online will outlast the pandemic.

Carvana and other online retailers have benefited from coronavirus-related lockdowns and a consumer shift toward e-commerce. The Tempe, Ariz.-based company, which has operated as an online retailer since it sold its first car eight years ago, sold 244,111 cars in 2020, up 37% compared with the prior year. That’s in contrast to wider industry trends. Registrations for used cars—a proxy for sales—declined 7% last year to 37.2 million compared with 2019, according to the National Automobile Dealers Association.

Carvana expects that demand for its services will remain high, even as the pandemic eventually abates. “A big part of it is the customer preference shift toward more comfort buying online, and that’s something we think will be here to stay,” Chief Financial Officer Mark Jenkins said.
 

Bob Hope

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I thought this was going to be some sort of over priced vehicle gimmick company but searching for stuff on cars or AT and a lot of their vehicles show up priced VERY competitively with regular brick and mortar dealers.

Also they can take pictures unlike most dealers.
 
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Yaj Yak

Yaj Yak

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I thought this was going to be some sort of over priced vehicle gimmick company but searching for stuff on cars or AT and a lot of their vehicles show up priced VERY competitively with regular brick and mortar dealers.

Also they can take pictures unlike most dealers.

crazy competitively priced and i love that they point out "flaws" with very clear photos.
 

Bob Hope

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crazy competitively priced and i love that they point out "flaws" with very clear photos.
For sure. Half the time dealers are as bad as Craigslist turds, like 4 pictures that look like they were taken with an original razr facing towards the sun.
Carvana pictures are ridiculously good.
 

The Beast

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For sure. Half the time dealers are as bad as Craigslist turds, like 4 pictures that look like they were taken with an original razr facing towards the sun.
Carvana pictures are ridiculously good.
Some dealers are cheap and have the porters take pics instead of paying a professional co.
 

Bob Hope

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Some dealers are cheap and have the porters take pics instead of paying a professional co.
Is carvana a worry for regular dealers? Clearly they don’t have new cars but seems like they’re giving it a go for used. What makes more money for a dealer, used or new?
 
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Yaj Yak

Yaj Yak

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Is carvana a worry for regular dealers? Clearly they don’t have new cars but seems like they’re giving it a go for used. What makes more money for a dealer, used or new?

i bet they think it isn't but it really should be.
 

Bob Hope

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i bet they think it isn't but it really should be.
After reading your other thread I agree. I assume they foam at the mouth when someone walks in with a trade in, no financing and looking to buy. This takes one of those out of the new buying experience. Only downside is the tax side of things.
 
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Yaj Yak

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After reading your other thread I agree. I assume they foam at the mouth when someone walks in with a trade in, no financing and looking to buy. This takes one of those out of the new buying experience. Only downside is the tax side of things.

tax side of things?
 

Bob Hope

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I believe you deduct the amount of trade in from the new purchase and only pay sales tax on the difference.....no?
 

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people are using carvana to sell there vehicles. The question is are people using them to buy cars? As much money as they are putting in used vehicles they can easily lose money if they can’t sell them. If the market drops on used it’s going to be difficult to sell vehicles they are buried in.
 
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Yaj Yak

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people are using carvana to sell there vehicles. The question is are people using them to buy cars? As much money as they are putting in used vehicles they can easily lose money if they can’t sell them. If the market drops on used it’s going to be difficult to sell vehicles they are buried in.

i mean... id wager a bet carvana is selling plenty because it's not like they are trying to start an auto museum.


carvana has to have such crazy low overhead compared to a typical brick and mortar dealership too
 
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Yaj Yak

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I believe you deduct the amount of trade in from the new purchase and only pay sales tax on the difference.....no?

ohhhh you're saying vs buying new. yeah. your state's particular tax laws of course still exist on carvana
 

Bob Hope

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ohhhh you're saying vs buying new. yeah. your state's particular tax laws of course still exist on carvana
More so the dealer experience of trading in and buying from them nets you some tax savings vs selling to carvana and buying separately either from a dealer (since carvana doesn't do new) or buying separate from carvana.
 
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Yaj Yak

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increasing margins and selling maaaaaaaaany more cars. holy fuck.
 
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Yaj Yak

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More so the dealer experience of trading in and buying from them nets you some tax savings vs selling to carvana and buying separately either from a dealer (since carvana doesn't do new) or buying separate from carvana.

right, if you're interested in new. when i was tire kicking shit it had my truck, my payoff and that im in IL and had everything i was looking at computed knowing i was in IL for tax trade in "benefits"
 

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I'm jumping in to CVNA I think now too.....
 

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i mean... id wager a bet carvana is selling plenty because it's not like they are trying to start an auto museum.


carvana has to have such crazy low overhead compared to a typical brick and mortar dealership too
Who is servicing the trades? Detailing, body repair u can’t just take a used vehicle in and turn around and flip it with out doing work so they must be paying someone.
 

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Some dealers are cheap and have the porters take pics instead of paying a professional co.
Or some pay a company to take pictures but they all look like they are taken in a cave and show absolutely nothing about the vehicle and no matter how much people who work there tell them good pictures sell cars they don’t listen..... not saying I know any dealers like this or anything....
 
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Yaj Yak

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Who is servicing the trades? Detailing, body repair u can’t just take a used vehicle in and turn around and flip it with out doing work so they must be paying someone.

id bet they are self servicing.

the infographic i posted shows they are averaging $3252 gross profit per vehicle.
 
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Yaj Yak

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i also think some flipppers are buying shit at auction then sending it right to carvana

some of the cars i saw pics were taken in auction lots, i bet they upload the vin, see what carvana will toss at it and bid on it according to that. could be pretty easy way to make some bucks. or potentially get burned if something is a turd.
 

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To the average human being that doesn’t know crap about cars online shopping makes sense. To the TCG brothers that can nit pick a car and find even the smallest bad detail, online car buying doesn’t make sense. I need to see the vehicle. I need to smell the interior. I need to look underneath to see how much rust there is on undercarriage. Has anyone on TCG used caravana or vroom to but a car sight unseen??
 
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Yaj Yak

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To the average human being that doesn’t know crap about cars online shopping makes sense. To the TCG brothers that can nit pick a car and find even the smallest bad detail, online car buying doesn’t make sense. I need to see the vehicle. I need to smell the interior. I need to look underneath to see how much rust there is on undercarriage. Has anyone on TCG used caravana or vroom to but a car sight unseen??

i would absolutely purchase a vehicle online from carvana. without a single doubt.

you do know you can return it no questions asked within 7 days, right?
 

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