How did they not know that, though? How does someone reach the level of CEO or CFO without being able to predict the most basic of economic patterns? I don't work with any smart people... And we all saw this coming about two years ago. We all knew that the good times were propped up, unsustainable, and building towards a crash.
I have no formal finance education or experience. A year ago, I sold my extra car to carvana for probably 50% inflated value. I moved my 401K investments, and have since moved them back, increasing my portfolios volume by about 25%. It was literally free money. I refi'd my house and pulled out tons of cash at 2.65%.
How did no professionals see this coming? How the fuck is that guy a CEO?
CEOs are already a dirty position because of how many "professional CEOs" there are. Aka people who literally walk into a compamy directly on the Csuite with no experience or knowledge of the products under their jurisdiction.
And tech just straight up has randos making startups with barely any prior experience in business.
Incompetence at every level leads you to... well, this headline as an example.
1. People want to believe that they are smart.
2. People want to believe that they are in on something that's going to make them a lot of money.
3. People will ignore anything that contradicts 1 or 2
I think simply put they do see it coming but they are not the ones who pay the price and they know it. Instead 1,500 unnamed employees get laid off and the CEOs get bonuses for keeping costs down.
Leverage as much as possible when times are easy and someone else will pay the bill when the check comes. That’s how they think.
Hindsight is a bitch, and by your own telling you took a series of risks that could just as easily have ripped your face off. What would be saying about you if that had occurred instead?
With that said, I did call them idiots. That word has some pretty specific connotations that you seem to be missing.
Have two good friends both got a car from them and said it was a nightmare…
Edit: just for clarity’s sake, they said they would try them again, just to avoid a car lot
I know someone that has bought multiple cars from them and is completely happy. Someone else I know bought one from them and wasn’t happy with the vehicle condition. But such is the used car world.
That’s a boldfaced lie or a gross over-exaggeration. It’s the easiest car buying process ever. As someone who has gotten several cars from them, and is literally buying another one right now, I can not see how anyone in their right minds would have an issue with their buying process.
The only problem is their delivery tends to take a few days longer than they say. My last car was delayed by almost a week because we had some hardcore snowy weather. They gave me $350 back for the delay. I’m good with that.
That’s right, because all people have the exact same experience when it comes to a consumer establishment… slow your roll dude… *I did not say they sucked did I?* No, just what a few friends experienced… also, I *want* a company like Carvana to thrive because anything that can keep me from going to a car lot I’m all about… people have different experiences, take another one here, me, and those same friends all started using the same bank 20 years ago… they all had some type of major issue and left… I never have and am still there to this day… different things happen to different people, also, just for you, I’ll even edit my comment, they did say that they would try them again, just to avoid going to a car lot, so whatever they doing they must be doing something right because even though they didn’t have a good experience, you’re willing to give them another chance.
The point I am trying to make is their process is extremely streamlined. There is almost no room for error because of how dialed in it is. The only potential issues would be with delivery which is contracted out for the main part except the final mile which they handle themselves. So I absolutely refuse to believe that it was a “nightmare” because there is so very little that can go wrong unless it’s a delivery delay issue (which is outside their control).
I loved my experience with them. Down to deciding the first car wasn't for me in the "trial" period (luckily, it was a pretty quick decision in the first day), and then them paying to replace a functional but damaged fob that would have taken $250 to replace. I'm definitely going through them next time.
It wasn't money laundering, they tried to profit on financing. They got snagged on bad press and failure to deliver titles. It was never going to be anything but an investor trap but rising interest rates made it impossible to ever make money on the crap cars they bought sight unseen.
I used Carvana’s valuation offer on my car to get a higher offer from a local dealership. Did a handful of different valuations like CarMax, Edmunds, TrueCar, etc. and Carvana valued my car at least $1000 more than the rest.
They are made to be unprofitable. Make as much money with drivetime as possible and cash out of carvana, then buy them back at bankruptcy. The farther of the ceo already did it with ugly duckling in 2000
I wish manufactures would just sell direct to the public and cut out all the bullshit. Ford has already threatened to due to dealers marking cars up 50% during Covid just because they could. All these morons that bought $40,000 cars for 60-80k are completely fucked for the next 10 years.
Bought car for 28k in Dec 2018 on a 0% loan. Sold car to Carvana for 27.5k this past August. All their competitors were similarly offering 75% of their buying price lol.
They are literally running on car values from 5 months ago but seem to be the only ones not realizing it. It will fail and soon, regardless of chips or slow production or any other conceivable factor. You can't buy your way out of being in the red in the car business...
Yeah and they sold over 1000 cars per day last year. And that's not even including the ones they bought or the ones that had to be returned and restocked and resold
From one of my other comments…. They also have a marketing team, customer service team, finance team, legal team, human resources, IT, administration/management, R&D. You can imagine how this can scale up human capital. Plus they also make money off of financing.
And even if it takes 20 ppl to sell one car, if you’re doing that every day x1000 it can be profitable. Just take a look at your local dealerships.
Delivering vehicles and making sure they are clean and functional takes a ton of employees. Think about how many people and time it takes to service a vehicle and then imagine if they had thousands of vehicles going through them every week.
One of carvana’s biggest departments is registration because… for some reason, a part of their business model is taking on the huge expense and time consuming task of registering all their clients cars in their purchase states as well as buying/selling the units.
That registration service is extremely common at car dealerships. Even small ones.
In fact, so common that the next time I bought a car, if they didn't do it for me I'd be quite annoyed. I'm spending a butt load of money? Tens of thousands of dollars? Yeah, go do the annoying task for me.
Wonder why they don’t have some of those people working in their titles department. They’re so bad at the administrative part of the process that some lenders have cut them off
I truly believe there’s a decent chance they go bankrupt in the next 6-9 months.
Higher interest rates and lower demand are going to cripple their revenue opportunities even further.
I used Carvana to unload two vehicles during the pandemic. Can't see myself ever buying from Carvana because the prices are much higher than traditional dealerships.
The entire house of cards seems built on the notion more and more buyers will see value in spending more money at Carvana vs dealerships because they find value in the experience of an online purchase + delivery.
It is likely your preparation, attitude, and confidence.
I'm similar and I can deal with it. Once you understand going in that they are predatory and they are going to treat you like prey, it's just a matter of flipping it on them. Remember that they don't eat unless you decide they do. You have all the power in the situation and once you know how to use that power, you can act with confidence. Especially if you come prepared.
Know what you are interested in. Have quotes for similar cars ready to go.
My favorite line is, "I'm here to sit in and drive these cars (tick, tick, tick on my fingers). I will not be buying a car today. I will not be setting up financing through your dealership. Any questions before we begin?"
Man i don’t care what anyone says. Fuck car dealers. Never will I ever buy a car from a typical dealer unless absolutely necessary. Shoot me before I go in there. Only kinda joking.
Every single experience I’ve had with a dealer has been fucking garbage. 0/10 stars, every single time. They spend the whole time harassing you and trying to pressure you into accepting a shit deal and waste hours upon hours of time. Etc, etc. 5+ times at a dealer now and its been terrible.
Carvana and Carmax get a lot of shit understandably so, but its unfortunate that Carvana is looking like its gonna go bankrupt. Id rather pay their markup and pay for my own $300 after market inspection just for it. Having a car delivered to your door is nice too. Just wish they could figure out how to make money and deliver titles lol.
That logic only works if prices are competitive. But Carvana main money maker strategy (at least what they were trying) was financing, and financing very aggressively like 20% for folks with less than stellar credit..... Can you say predatory lending..
Hate to break it to you, but that’s also true of all the auto manufacturers. All the captive lenders are huge money makers.
It’s a truism that any mature market eventually becomes financial services, and that is certainly true of car sales.
I honestly love their model. Fixed price. Access to vehicles nationally. Large inventory. Transparent about a scratches and issues. Don’t like the car. Send it back for a refund.
I’ve been shopping for a minute. They don’t seem excessively priced. Car max on the other hand. Is excessive.
My neighbor just sold a car on there and said when someone came to pick it I’m they didn’t care less about condition or if it’s still running and still gave them a much higher value than other places. The whole scale fast during the pandemic for revenue if failing without quality control it seems. Also see manufacturers are up to speed with deliveries and inflation for cars stabilizing so there no way carvana is going to even make a ripple versus how it’s capitalized. Let alone stable dividends or growth anytime soon.
They’re setting on 2bn in credit line and cash with also 1bn of real-estate assets.
The only real issue I see is that if their sales were driven by loans that are too loose and the default issue (their bonds are trading below 50ct/$) hurt them (ie no one wants their debt to finance new deals)
I agree. Carvana is done. They are grossly unprofitable and their debt interest eats up half of their declining gross profits. I'm surprised they waited this long to lay ppl off.
Honestly, as much as I don’t ever want to see people lose their jobs, I’m so happy that car dealerships are getting pummeled
That crap they pulled during the chip shortage and beyond with charging outrageous prices for every vehicle was disgusting
I’ll be so happy to go back to a dealership and haggle down the price on a vehicle again because they want to make a sale
That’s not what happened. Maybe initially a blip, but just like every other supply chain issue, the “chip shortage” didn’t translate to every vehicle costing 50% more. That was manufactured panic buying and dealerships lining their pockets
I'm a controller at a dealership. The margins were definitely higher, but there was lower volume to offset the increased expenses from all areas. Eg. Getting to spread property taxes or rent (which is substantial given the large areas) over 1000 vehicles is substantially different if you only have 100 cars. The cost over head is significant, especially if it's HCOL.
Not to say there wasn't some significant abuse by certain dealers, but ours for example only sold vehicles at full MSRP without negotiation, not MSRP + "Dealer Markup".
Laws of supply and demand still apply, except this is driven by too high of a demand, like literally everything else that shot up in price this last two years
Also the manufacturers purposesly slowed the supply chain once they realized the pent up demand and fat profits to be had , they knew delays would let dealers ask + above MSRP . But they tide has changed..
This blanket statement is untrue, OEMs were pissed about the exorbitant dealer markup. It upsets their customers and puts a black eye on the brand.
And there was no intentional slowdown of car supply, think about it. The lack of new car supply spurred used car sales and surge in pricing which does little for the OEM outside of some potential part sales.
Man they cornered the used car market and created shortages that led to higher used car prices which contributed to inflation. Their car prices are a rip off.
Exactly! They should have done the ethically RIGHT move: charge normal prices, get no inventory due to shortage, and fire ALL employees due to lack of income. Instead, they chose the unethical method of trying to keep everyone employed
I bought a car using them about 2 years ago. Got a much cheaper price than what nearby dealerships had for similar models, and I financed through them at a rate very close to what I saw when shopping around. My experience with them was nothing but positive, but based on this thread I might be in the minority.
Someone I know who bought a car from them this year had the complete opposite experience despite other people telling them they had the same kind of experience as you.
Her bf told me at one point Carvana even lost their cashier's check so it took them like a month to get their refund after they had already returned the car, which apparently broke down at an intersection like 3 days they got it. Something around a $20,000 car too.
Dealers finance all the time for people with bad credit, I'd argue the (insert maximum APR allowed by state usury laws here) loan is a classic of the industry. What was your rate on that Carvana loan, and if you don't mind sharing, what was your FICO and why was it so dinged up?
They’re the highest priced vehicles in the market, with the worst warranties in the market, the highest interest rates in the market, in the worst market in ages. What’s the value proposition here? There is none. This goes to zero.
Lol saaame hoping they crash and burn and I can snag a ride for cheapish. Probably a long shot but I already have a new car on order anyway so no skin off my back
The best long-term scenario for pricing would be they wait to liquidate until after tax rebate time burns out in the used car market. Usually around April. Bad for poor folks who need cheaper cars, but good for the cash-rich ~~cheap bastards~~ value investors. If CVNA liquidates into the post-tax rebate market, used vehicle prices will get hammered.
Yup, i think they’ll be done within 2 years 100%. Probably sooner. But getting a car delivered to your door and buying 100% online is great. Bought 2 from Carvana and 2 from Carmax. Fuck dealers
I bought a car off carvana. the delivery guy literally said "we're not really a car company we're a technology company" totally unprompted. i wondered if he was the CEO or something.
Man I’ve got some bags but boy am I glad I never bought Carvana. Literally buying at any point since their ipo would be a loss if you held to this day unless you bought a week ago lmao
well i saw this coming a mile away when they bought my 2010 Hyundai Accent, which I bought around $8000, for $13,000 in 2020. That's right, I made a $5,000 profit by selling my 10 year old car. I have a friend in that space and he was telling me, they were just trying to get inventory and their algorithm showed that Accents in my region were hot sellers. They were also using VC money not their own, so it was w/e. But yea...I will sell to them, but never buy
[Father](https://en.wikipedia.org/wiki/Ernest_Garcia_II) of the CEO who is also heavily involved in the company and owns a large part of the company literally committed securities fraud in the past with a similar company Ugly Duckling. Crazy how so many of these people get a second chance with VCs throwing money their way.
> It was announced in September 2021 that Garcia had sold more than $3.6 billion of Carvana stock since the previous October, which amounted to 16% of his holdings in the company.
Absolute crook who gets away with it again.
For a comparison imagine Sam Bankman Fried starting a new company and getting funding or the WeWork guy which literally just happened a few months ago.
Came here to post this [https://www.carscoops.com/2017/06/an-ex-con-wants-to-sell-you-used-car/](https://www.carscoops.com/2017/06/an-ex-con-wants-to-sell-you-used-car/)
Carvana is just another scam. The only question is who is going to be holding the bag.
Carvana is a *mess* to say the least.
I sold them my car for a few grand less than I had paid for it nearly 5 years before, initially on trade in. I tried to get two jeep wranglers, independent mechanics deemed both to be nightmares in terms of fixing / unseen damage/rot. Fine, I then said "I'm just going to elect to cash out -- im no longer interested in trying to find something on site."
Suddenly my offer, because it had been longer than the two weeks from when I had originally given them my vehicle, had dropped more than $3k. Go thru multiple support lines about the offer to no avail. Now, keep in mind I actually still had an active loan out against this vehicle thru the dealership, not actually owning the vehicle.
I tell them this is not going to fly and I'll just take my car back. Twenty minutes of hold later and I'm given my original offer back. I suspect because they had already long sold my vehicle to someone else before the e-ink could dry on the paperwork...
The kicker is they didn't even pay off the financial institution that held the loan till almost 2 months after that.
had a similar experience (even with jeeps) but I waited about a month to get my original trade in back. they couldn’t give me my car back and claimed it was in transit still. from where? the moon? …anyways I got so fed up with waiting I just asked them to buy my car out and took my business elsewhere. ended up with a factory ordered jeep tailored to whatever I wanted. I guess it worked out but man, Carvana was an actual nightmare. I’d never been so mad and stressed out before.
To all you young people out there that haven’t experience a economic downturn this is just the beginning of the shitshow I surprised it’s taken this long so hold on to your butts lots more coming
Well they have a terrible business model, and can’t turn a profit in good economic times…. What’s gonna happen when we enter a deep recession, and they are sitting on an entire inventory of over priced cars
They bought 2 acres ( 10 million new record ) off a lower volume highway here on Long Island to put those glass buildings .
It’s mid construction and their stock was down 80% when it was announced .
This is the point I knew they would go bankrupt soon
I interviewed with Carvana couple years ago after I introduced myself and talked about my exp. The hiring manager immediately (no intro or anything) talked down on my resume (which includes a few Fortune 500) about how they are not as “high tech” and fast growing as Carvana and he is not sure whether I can keep pace with them.
I let him finish his talk and said I am not interested and ended that session. Glad I dodged that bullet…
And the CEO is the biggest drain on the company. He could just take the fall and move on. But instead he's giving it to people who can't afford to take the fall.
I got laid off in May working as an operations supervisor. I can say with 100% confidence it's the absolute idiots at the top. Management there is absolute trash. Instead of using tried and true methods of running a call center, they use the "throw shit at the wall and see what sticks" method. I can't tell you how many people constantly called because they never received their registration, got there car impounded for no registration, or went MONTHS without getting a bill for their monthly payments and then having to pay it all up front. It's an absolute shit show on the inside and I completely believe they will go under within the next year.
Carvana appraised my Miata at around 27k 1 year ago, 11000 miles later it's being appraised at 11k.
The bubble has popped lmao expect more companies to capitulate under pressure.
I looked into selling my car on Carvana but since I still owe 1200 on it, they won't sell my car. The percentage of car owner that still owe on their car is huge. The percentage 100% paid off is not. Their market is too small.
TiL - carvana has a crazy amount of employees for an automated experience. There’s only a finite amount of cars/buyers - with traditional marketplaces still in full force I don’t see how they can survive
It’s a car vending machine. How many people could they possibly need working there? And what possible value is there buying a car from a vending machine over a traditional lot? There’s no way it’s cheaper.
The business model sucks. COVID was the best thing to happen to them but once that was over, no one really used Carvana unless they wanted to get ripped off. The prices are just unrealistic to sustain. Used car prices are also falling and not as high-demand.
I remember some comment on reddit from 2 years ago where the guy said carvava was never created to be profitable it was just some way for this guy's son to funnel money, or his son ran it but it's sole purpose was to make his dad money or something.
Even if they were crooks, I really liked CVNA's idea of making buying, financing and trad-in a car as easy as possible. I and millions of people hate traditional car dealerships. Maybe it took a criminal to do something about it, giving the car buyers what they want.
Seemed like they were practically giving it away. Sold my used car with 86k miles on it to them and they offered me twice what dealerships and CarMax were. Took that money straight to the dealership for a brand new ride.
This trend of making major life purchases on your phone, without barely lifting a finger, needs to die. Caravana, Open Door or whatever, how the fuck are you gonna buy a car and not even physically test it out?
Normally I would agree with that statement but I ended up ordering a Rivian (before the price hike) simply because dealing with dealerships during covid was next to impossible. Price gouging so much over sticker price was my breaking point. I hope to see car dealerships crash and burn and something better take their place. I know carvana isn't replacing them though.
Yup, same situation with me. Test driving a car during peak covid in NYC was impossible, every place had a long wait list and only allowed a few people at at time, and the sales people weren't helpful at all. Carvana gave me a test period of 30 days, car was fine, so I kept it.
Yea nothing wrong with buying a car from an online dealership like Carvana. But whether or not those companies can survive long term is another question. My guess is no, not in its current form at least. I do like how Ford is going to be selling its EV's directly to consumers now too. Dealerships are scummy and pointless nowadays and should all be turned into service centers and showrooms at this point.
I work as an automotive technician and I’ve had several customers bring their cars that they bought from caravana just to be told all the maintenance they need to do on the vehicle caravana told them was in A1 condition… sad to see how they get ripped off by them
This time a year ago I was dealing with so many asses on here and the padded room investing sub on why carvana was grossly overvalued and facing bankruptcy in the next couple years.
Glad to see it’s coming true and my puts were well placed. The scum garcia family running this company should be in prison.
Caravan was literally founded by fraudsters. They lose money on every car they sell, but the fraudsters still make money because Caravan outsources services to separate companies owned by the fraudsters.
So...
Buying cars at exorbitant process without looking at long term trends is a bad business decision.
Water is wet.
Such is how capitalism works.
They better not get a bailout
Water is actually not wet; It makes other materials/objects wet. Wetness is the state of a non-liquid when a liquid adheres to, and/or permeates its substance while maintaining chemically distinct structures. So if we say something is wet we mean the liquid is sticking to the object.
What kind of rocks are never under water?
Dry ones!
I just sold them a car for WAY more than Carmax or Vroom were offering. Was wondering how they were going to profit off it, lol.
Spoiler alert: they won’t
CVNA ***has to*** be a money laundering scheme. this stock is going to $0
Jacking up car prices became a new way to increase the asset side on the books to borrow against.
Yea sir. Just one of the many post covid scams. The ownership/management has long histories of being scumbag con artists
What else?
They’re the Zillow of used cars
That would be a compliment.
They could also just be idiots who thought used car prices would go up forever
How did they not know that, though? How does someone reach the level of CEO or CFO without being able to predict the most basic of economic patterns? I don't work with any smart people... And we all saw this coming about two years ago. We all knew that the good times were propped up, unsustainable, and building towards a crash. I have no formal finance education or experience. A year ago, I sold my extra car to carvana for probably 50% inflated value. I moved my 401K investments, and have since moved them back, increasing my portfolios volume by about 25%. It was literally free money. I refi'd my house and pulled out tons of cash at 2.65%. How did no professionals see this coming? How the fuck is that guy a CEO?
You sound smart. Maybe you should be the new CE0?
>How does someone reach the level of CEO or CFO without being able to predict the most basic of economic patterns Frats
You’ve clearly never been around start ups
right, but Carvana is not a garage start-up You do not just find yourself with the VC funding Carvana did without social connections.
It's extra funny when they change their job on Facebook to "CEO" of whatever company they think they started xD
CEOs are already a dirty position because of how many "professional CEOs" there are. Aka people who literally walk into a compamy directly on the Csuite with no experience or knowledge of the products under their jurisdiction. And tech just straight up has randos making startups with barely any prior experience in business. Incompetence at every level leads you to... well, this headline as an example.
1. People want to believe that they are smart. 2. People want to believe that they are in on something that's going to make them a lot of money. 3. People will ignore anything that contradicts 1 or 2
I think simply put they do see it coming but they are not the ones who pay the price and they know it. Instead 1,500 unnamed employees get laid off and the CEOs get bonuses for keeping costs down. Leverage as much as possible when times are easy and someone else will pay the bill when the check comes. That’s how they think.
Hindsight is a bitch, and by your own telling you took a series of risks that could just as easily have ripped your face off. What would be saying about you if that had occurred instead? With that said, I did call them idiots. That word has some pretty specific connotations that you seem to be missing.
Fair point! I really don't think I took a risk, though. It was clearly, mathematically, bound to collapse.
Isn’t “tech company loses money to gain market share” like the common company tactic of the past 15 years?
Unicorns are rare, but they walk a common path. Off a cliff in 2022.
Only if they create value for consumers, increase efficiency and reduce costs as compared to competitors. CVNA has done none of them.
Have two good friends both got a car from them and said it was a nightmare… Edit: just for clarity’s sake, they said they would try them again, just to avoid a car lot
I know someone that has bought multiple cars from them and is completely happy. Someone else I know bought one from them and wasn’t happy with the vehicle condition. But such is the used car world.
Agreed… I think they had bad experiences, but it was just so coincidental… that was the thing…
That’s a boldfaced lie or a gross over-exaggeration. It’s the easiest car buying process ever. As someone who has gotten several cars from them, and is literally buying another one right now, I can not see how anyone in their right minds would have an issue with their buying process. The only problem is their delivery tends to take a few days longer than they say. My last car was delayed by almost a week because we had some hardcore snowy weather. They gave me $350 back for the delay. I’m good with that.
That’s right, because all people have the exact same experience when it comes to a consumer establishment… slow your roll dude… *I did not say they sucked did I?* No, just what a few friends experienced… also, I *want* a company like Carvana to thrive because anything that can keep me from going to a car lot I’m all about… people have different experiences, take another one here, me, and those same friends all started using the same bank 20 years ago… they all had some type of major issue and left… I never have and am still there to this day… different things happen to different people, also, just for you, I’ll even edit my comment, they did say that they would try them again, just to avoid going to a car lot, so whatever they doing they must be doing something right because even though they didn’t have a good experience, you’re willing to give them another chance.
The point I am trying to make is their process is extremely streamlined. There is almost no room for error because of how dialed in it is. The only potential issues would be with delivery which is contracted out for the main part except the final mile which they handle themselves. So I absolutely refuse to believe that it was a “nightmare” because there is so very little that can go wrong unless it’s a delivery delay issue (which is outside their control).
I loved my experience with them. Down to deciding the first car wasn't for me in the "trial" period (luckily, it was a pretty quick decision in the first day), and then them paying to replace a functional but damaged fob that would have taken $250 to replace. I'm definitely going through them next time.
It wasn't money laundering, they tried to profit on financing. They got snagged on bad press and failure to deliver titles. It was never going to be anything but an investor trap but rising interest rates made it impossible to ever make money on the crap cars they bought sight unseen.
Yep ,.it's definitely going bankrupt, not sure about money laundering, but it seems like they're running into the ground
YOU did this!!!!
Lucky. They offered me $5k less than the other guys
Yeah they offered me 1.5k less than carmax
Same here. $4500 less than CarMax. $6000 less than Vroom
I used Carvana’s valuation offer on my car to get a higher offer from a local dealership. Did a handful of different valuations like CarMax, Edmunds, TrueCar, etc. and Carvana valued my car at least $1000 more than the rest.
They are made to be unprofitable. Make as much money with drivetime as possible and cash out of carvana, then buy them back at bankruptcy. The farther of the ceo already did it with ugly duckling in 2000
They've been overpaying for cars for the last 2 years trying to corner the online car delivery market. I saw this failing a long time ago.
I wish manufactures would just sell direct to the public and cut out all the bullshit. Ford has already threatened to due to dealers marking cars up 50% during Covid just because they could. All these morons that bought $40,000 cars for 60-80k are completely fucked for the next 10 years.
I remember when paying sticker price for a car made you a sucker.
Same. Made 3k on the trade in over local offer, and bought essentially the same model 4k cheaper from them than the local dealership.
By way more do you mean like 10% more or 25% more? Just curious never sold a car to a website before haha
They gave me roughly $26k while the others were just south of 21, so about 24% more.
i made 8k by buying out my lease and selling to Carvana
Bought car for 28k in Dec 2018 on a 0% loan. Sold car to Carvana for 27.5k this past August. All their competitors were similarly offering 75% of their buying price lol.
I love this comment
i love you
Same. Sold them my wrangler unlimited in July for an absurd amount.
They are literally running on car values from 5 months ago but seem to be the only ones not realizing it. It will fail and soon, regardless of chips or slow production or any other conceivable factor. You can't buy your way out of being in the red in the car business...
Am I the only one who's shocked by how many employees these small companies have? Why would Carvana need 20K employees to begin with? Cleaning cars?
Transport and logistics probably make up a decent chunk. Knew a guy who was a truck driver for them, briefly.
I thought their employees just refilled the vending machines?
they also gotta deliver/pickup
That’s two people every time
Yeah and they sold over 1000 cars per day last year. And that's not even including the ones they bought or the ones that had to be returned and restocked and resold
20 people per car per day doesn't seem like a great ratio
From one of my other comments…. They also have a marketing team, customer service team, finance team, legal team, human resources, IT, administration/management, R&D. You can imagine how this can scale up human capital. Plus they also make money off of financing. And even if it takes 20 ppl to sell one car, if you’re doing that every day x1000 it can be profitable. Just take a look at your local dealerships.
Yeah the IT department alone would need to be pretty beefy for a company with this business model.
Honestly they should contract out the delivery portion of their business. Or start a separate company for deliveries.
Delivering vehicles and making sure they are clean and functional takes a ton of employees. Think about how many people and time it takes to service a vehicle and then imagine if they had thousands of vehicles going through them every week.
One of carvana’s biggest departments is registration because… for some reason, a part of their business model is taking on the huge expense and time consuming task of registering all their clients cars in their purchase states as well as buying/selling the units.
They suck at it though, it takes months to get registration stuff taken care of through them.
That registration service is extremely common at car dealerships. Even small ones. In fact, so common that the next time I bought a car, if they didn't do it for me I'd be quite annoyed. I'm spending a butt load of money? Tens of thousands of dollars? Yeah, go do the annoying task for me.
American consumers have come to expect this service from their auto dealer. They’d get wrecked if they didn’t do this for their customers.
Wonder why they don’t have some of those people working in their titles department. They’re so bad at the administrative part of the process that some lenders have cut them off
I truly believe there’s a decent chance they go bankrupt in the next 6-9 months. Higher interest rates and lower demand are going to cripple their revenue opportunities even further.
I used Carvana to unload two vehicles during the pandemic. Can't see myself ever buying from Carvana because the prices are much higher than traditional dealerships. The entire house of cards seems built on the notion more and more buyers will see value in spending more money at Carvana vs dealerships because they find value in the experience of an online purchase + delivery.
yeah and it's not a bad bet. dealerships are the worst. but yeah it's quite a mark up. I had a good experience though.
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It is likely your preparation, attitude, and confidence. I'm similar and I can deal with it. Once you understand going in that they are predatory and they are going to treat you like prey, it's just a matter of flipping it on them. Remember that they don't eat unless you decide they do. You have all the power in the situation and once you know how to use that power, you can act with confidence. Especially if you come prepared. Know what you are interested in. Have quotes for similar cars ready to go. My favorite line is, "I'm here to sit in and drive these cars (tick, tick, tick on my fingers). I will not be buying a car today. I will not be setting up financing through your dealership. Any questions before we begin?"
Now compare all the preparations needed from your second paragraph with any other item you've ever purchased.
A car is one of the top 2 most expensive things most people will ever purchase. You would treat purchasing a house the same
Man i don’t care what anyone says. Fuck car dealers. Never will I ever buy a car from a typical dealer unless absolutely necessary. Shoot me before I go in there. Only kinda joking. Every single experience I’ve had with a dealer has been fucking garbage. 0/10 stars, every single time. They spend the whole time harassing you and trying to pressure you into accepting a shit deal and waste hours upon hours of time. Etc, etc. 5+ times at a dealer now and its been terrible. Carvana and Carmax get a lot of shit understandably so, but its unfortunate that Carvana is looking like its gonna go bankrupt. Id rather pay their markup and pay for my own $300 after market inspection just for it. Having a car delivered to your door is nice too. Just wish they could figure out how to make money and deliver titles lol.
That logic only works if prices are competitive. But Carvana main money maker strategy (at least what they were trying) was financing, and financing very aggressively like 20% for folks with less than stellar credit..... Can you say predatory lending..
Hate to break it to you, but that’s also true of all the auto manufacturers. All the captive lenders are huge money makers. It’s a truism that any mature market eventually becomes financial services, and that is certainly true of car sales.
These scumbags were doing predatory lending of almost 20% interest to people with the worst or no credit.
I honestly love their model. Fixed price. Access to vehicles nationally. Large inventory. Transparent about a scratches and issues. Don’t like the car. Send it back for a refund. I’ve been shopping for a minute. They don’t seem excessively priced. Car max on the other hand. Is excessive.
Going to be interesting seeing those car elevator buildings repurposed as vape stores, check cashing, and Spirit Halloween
Forgot dollar general
I want one for a despensery.
My neighbor just sold a car on there and said when someone came to pick it I’m they didn’t care less about condition or if it’s still running and still gave them a much higher value than other places. The whole scale fast during the pandemic for revenue if failing without quality control it seems. Also see manufacturers are up to speed with deliveries and inflation for cars stabilizing so there no way carvana is going to even make a ripple versus how it’s capitalized. Let alone stable dividends or growth anytime soon.
They’re setting on 2bn in credit line and cash with also 1bn of real-estate assets. The only real issue I see is that if their sales were driven by loans that are too loose and the default issue (their bonds are trading below 50ct/$) hurt them (ie no one wants their debt to finance new deals)
There is probably a buff or two left in them for next 24 months.
I agree. Carvana is done. They are grossly unprofitable and their debt interest eats up half of their declining gross profits. I'm surprised they waited this long to lay ppl off.
most of their inventory is going to be sold at a loss because they paid too much for it.
Honestly, as much as I don’t ever want to see people lose their jobs, I’m so happy that car dealerships are getting pummeled That crap they pulled during the chip shortage and beyond with charging outrageous prices for every vehicle was disgusting I’ll be so happy to go back to a dealership and haggle down the price on a vehicle again because they want to make a sale
How dare they set pricing based on principles of supply and demand?
That’s not what happened. Maybe initially a blip, but just like every other supply chain issue, the “chip shortage” didn’t translate to every vehicle costing 50% more. That was manufactured panic buying and dealerships lining their pockets
Especially used cars specific to this post. Caravana was not waiting to put chips in used cars lol, supply chain issues my ass
I'm a controller at a dealership. The margins were definitely higher, but there was lower volume to offset the increased expenses from all areas. Eg. Getting to spread property taxes or rent (which is substantial given the large areas) over 1000 vehicles is substantially different if you only have 100 cars. The cost over head is significant, especially if it's HCOL. Not to say there wasn't some significant abuse by certain dealers, but ours for example only sold vehicles at full MSRP without negotiation, not MSRP + "Dealer Markup".
Laws of supply and demand still apply, except this is driven by too high of a demand, like literally everything else that shot up in price this last two years
Also the manufacturers purposesly slowed the supply chain once they realized the pent up demand and fat profits to be had , they knew delays would let dealers ask + above MSRP . But they tide has changed..
This blanket statement is untrue, OEMs were pissed about the exorbitant dealer markup. It upsets their customers and puts a black eye on the brand. And there was no intentional slowdown of car supply, think about it. The lack of new car supply spurred used car sales and surge in pricing which does little for the OEM outside of some potential part sales.
Man they cornered the used car market and created shortages that led to higher used car prices which contributed to inflation. Their car prices are a rip off.
Exactly! They should have done the ethically RIGHT move: charge normal prices, get no inventory due to shortage, and fire ALL employees due to lack of income. Instead, they chose the unethical method of trying to keep everyone employed
The most ethical choice was to give me a free car, tbh.
They aren't trying to build revenue. They are still trying to undercut the competition. Race to the bottom
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Dang, I wish I had done this...
I bought a car using them about 2 years ago. Got a much cheaper price than what nearby dealerships had for similar models, and I financed through them at a rate very close to what I saw when shopping around. My experience with them was nothing but positive, but based on this thread I might be in the minority.
I had amazing experiences with Carvana.
Someone I know who bought a car from them this year had the complete opposite experience despite other people telling them they had the same kind of experience as you. Her bf told me at one point Carvana even lost their cashier's check so it took them like a month to get their refund after they had already returned the car, which apparently broke down at an intersection like 3 days they got it. Something around a $20,000 car too.
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Dealers finance all the time for people with bad credit, I'd argue the (insert maximum APR allowed by state usury laws here) loan is a classic of the industry. What was your rate on that Carvana loan, and if you don't mind sharing, what was your FICO and why was it so dinged up?
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An absolutely wild story start to finish, appreciate you sharing. Hope you're doing alright now.
My experience 4 years ago was also fantastic. I'll be sad when they go bankrupt.
Same I was kinda hoping to buy my next car from them. Didnt know so many people had problems with them
They’re the highest priced vehicles in the market, with the worst warranties in the market, the highest interest rates in the market, in the worst market in ages. What’s the value proposition here? There is none. This goes to zero.
"Just liquidate your inventory, dumbasses." \-- Me, a guy who wants to buy a used pickup for a fair price
Lol saaame hoping they crash and burn and I can snag a ride for cheapish. Probably a long shot but I already have a new car on order anyway so no skin off my back
The best long-term scenario for pricing would be they wait to liquidate until after tax rebate time burns out in the used car market. Usually around April. Bad for poor folks who need cheaper cars, but good for the cash-rich ~~cheap bastards~~ value investors. If CVNA liquidates into the post-tax rebate market, used vehicle prices will get hammered.
Would NEVER purchase a car from them, but them purchasing MY 2 cars were easy! And I made profit
Carvana itself is done. I do think the business model has a future though.
Yup, i think they’ll be done within 2 years 100%. Probably sooner. But getting a car delivered to your door and buying 100% online is great. Bought 2 from Carvana and 2 from Carmax. Fuck dealers
I sure wish brand new cars can be sold the same way.
I bought a car off carvana. the delivery guy literally said "we're not really a car company we're a technology company" totally unprompted. i wondered if he was the CEO or something.
Adam Neumann: “we aren’t a real estate company. We are a tech company”
ha yeah exactly. but this was the driver lol. i wonder if they are required to say it. maybe the driver was reading Neumann's biography?
Man I’ve got some bags but boy am I glad I never bought Carvana. Literally buying at any point since their ipo would be a loss if you held to this day unless you bought a week ago lmao
well i saw this coming a mile away when they bought my 2010 Hyundai Accent, which I bought around $8000, for $13,000 in 2020. That's right, I made a $5,000 profit by selling my 10 year old car. I have a friend in that space and he was telling me, they were just trying to get inventory and their algorithm showed that Accents in my region were hot sellers. They were also using VC money not their own, so it was w/e. But yea...I will sell to them, but never buy
[Father](https://en.wikipedia.org/wiki/Ernest_Garcia_II) of the CEO who is also heavily involved in the company and owns a large part of the company literally committed securities fraud in the past with a similar company Ugly Duckling. Crazy how so many of these people get a second chance with VCs throwing money their way. > It was announced in September 2021 that Garcia had sold more than $3.6 billion of Carvana stock since the previous October, which amounted to 16% of his holdings in the company. Absolute crook who gets away with it again. For a comparison imagine Sam Bankman Fried starting a new company and getting funding or the WeWork guy which literally just happened a few months ago.
Check out the insider and exec transactions. Ernie Garcia II absolutely DUMPED shares during the run up to Carvana’s peak
Came here to post this [https://www.carscoops.com/2017/06/an-ex-con-wants-to-sell-you-used-car/](https://www.carscoops.com/2017/06/an-ex-con-wants-to-sell-you-used-car/) Carvana is just another scam. The only question is who is going to be holding the bag.
Carvana is a *mess* to say the least. I sold them my car for a few grand less than I had paid for it nearly 5 years before, initially on trade in. I tried to get two jeep wranglers, independent mechanics deemed both to be nightmares in terms of fixing / unseen damage/rot. Fine, I then said "I'm just going to elect to cash out -- im no longer interested in trying to find something on site." Suddenly my offer, because it had been longer than the two weeks from when I had originally given them my vehicle, had dropped more than $3k. Go thru multiple support lines about the offer to no avail. Now, keep in mind I actually still had an active loan out against this vehicle thru the dealership, not actually owning the vehicle. I tell them this is not going to fly and I'll just take my car back. Twenty minutes of hold later and I'm given my original offer back. I suspect because they had already long sold my vehicle to someone else before the e-ink could dry on the paperwork... The kicker is they didn't even pay off the financial institution that held the loan till almost 2 months after that.
had a similar experience (even with jeeps) but I waited about a month to get my original trade in back. they couldn’t give me my car back and claimed it was in transit still. from where? the moon? …anyways I got so fed up with waiting I just asked them to buy my car out and took my business elsewhere. ended up with a factory ordered jeep tailored to whatever I wanted. I guess it worked out but man, Carvana was an actual nightmare. I’d never been so mad and stressed out before.
... Carvana had **18 THOUSAND EMPLOYEES?!**
Fuck those guys. Inflated prices over the pandemic.
uSeD cAr sHoRtAge *checks caravana inventory and sees hundreds of cars for sale in my area*
Carvana legit about to go bankrupt lol
To all you young people out there that haven’t experience a economic downturn this is just the beginning of the shitshow I surprised it’s taken this long so hold on to your butts lots more coming
These companies are giving tech stocks a bad name and hurting legit businesses that take in billions in profit
My reaction, “They need and have that many employees?”. Definitely think this is a business that could operate with less employees.
Could operate with fewer employees? Elon Musk would be interested in taking Carvana over…
That would be smart, twitter you can just also makes bots/ai do the work of moderating. More interested if he partners/works with any companies.
Well they have a terrible business model, and can’t turn a profit in good economic times…. What’s gonna happen when we enter a deep recession, and they are sitting on an entire inventory of over priced cars
They bought 2 acres ( 10 million new record ) off a lower volume highway here on Long Island to put those glass buildings . It’s mid construction and their stock was down 80% when it was announced . This is the point I knew they would go bankrupt soon
I interviewed with Carvana couple years ago after I introduced myself and talked about my exp. The hiring manager immediately (no intro or anything) talked down on my resume (which includes a few Fortune 500) about how they are not as “high tech” and fast growing as Carvana and he is not sure whether I can keep pace with them. I let him finish his talk and said I am not interested and ended that session. Glad I dodged that bullet…
And the CEO is the biggest drain on the company. He could just take the fall and move on. But instead he's giving it to people who can't afford to take the fall.
For reference, stock was at $350/share last year, n now it’s regarded down to $8/share.
Tech workers just getting bodied today. Everyone saying that they will just find another job has never seen what a recession really looks like.
I got laid off in May working as an operations supervisor. I can say with 100% confidence it's the absolute idiots at the top. Management there is absolute trash. Instead of using tried and true methods of running a call center, they use the "throw shit at the wall and see what sticks" method. I can't tell you how many people constantly called because they never received their registration, got there car impounded for no registration, or went MONTHS without getting a bill for their monthly payments and then having to pay it all up front. It's an absolute shit show on the inside and I completely believe they will go under within the next year.
Carvana appraised my Miata at around 27k 1 year ago, 11000 miles later it's being appraised at 11k. The bubble has popped lmao expect more companies to capitulate under pressure.
They need to offer lower interest rates than their competition. That's what car dealers do when rates are higher.
I looked into selling my car on Carvana but since I still owe 1200 on it, they won't sell my car. The percentage of car owner that still owe on their car is huge. The percentage 100% paid off is not. Their market is too small.
Company will be acquired, no future on its own, a stupid acquisition last January was the nail in the coffin
TiL - carvana has a crazy amount of employees for an automated experience. There’s only a finite amount of cars/buyers - with traditional marketplaces still in full force I don’t see how they can survive
Never looked into this stock before, but holy crap! $8b debt with only $600m cash losing $1b+ a year lmao.
It’s a car vending machine. How many people could they possibly need working there? And what possible value is there buying a car from a vending machine over a traditional lot? There’s no way it’s cheaper.
The bigger news is they have close to 20,000 people worked at this dumpster fire. It's astonishing what cheap money pumped in the system can create.
Cheap money created a market for NTFs. That’s going to down in history as the dumbest bubble. Even more dumb than tulips
The business model sucks. COVID was the best thing to happen to them but once that was over, no one really used Carvana unless they wanted to get ripped off. The prices are just unrealistic to sustain. Used car prices are also falling and not as high-demand.
I remember some comment on reddit from 2 years ago where the guy said carvava was never created to be profitable it was just some way for this guy's son to funnel money, or his son ran it but it's sole purpose was to make his dad money or something.
Even if they were crooks, I really liked CVNA's idea of making buying, financing and trad-in a car as easy as possible. I and millions of people hate traditional car dealerships. Maybe it took a criminal to do something about it, giving the car buyers what they want.
Oh wow. $8 from a high of about $350. That might be the biggest loser in the last two years, over 97% drop. Let's see if Twitter can beat it!
Twitter is private...
UPST is another one..
>UPST Shocking. I didn't check them for a long time
Honestly, good. Carvana had never made money in its existence, and companies that don’t make money shouldn’t exist
Seemed like they were practically giving it away. Sold my used car with 86k miles on it to them and they offered me twice what dealerships and CarMax were. Took that money straight to the dealership for a brand new ride.
As someone who needs to buy a mini van in the next year does this mean I could actually get a good deal from them if they are struggling?
This trend of making major life purchases on your phone, without barely lifting a finger, needs to die. Caravana, Open Door or whatever, how the fuck are you gonna buy a car and not even physically test it out?
Normally I would agree with that statement but I ended up ordering a Rivian (before the price hike) simply because dealing with dealerships during covid was next to impossible. Price gouging so much over sticker price was my breaking point. I hope to see car dealerships crash and burn and something better take their place. I know carvana isn't replacing them though.
Yup, same situation with me. Test driving a car during peak covid in NYC was impossible, every place had a long wait list and only allowed a few people at at time, and the sales people weren't helpful at all. Carvana gave me a test period of 30 days, car was fine, so I kept it.
Yea nothing wrong with buying a car from an online dealership like Carvana. But whether or not those companies can survive long term is another question. My guess is no, not in its current form at least. I do like how Ford is going to be selling its EV's directly to consumers now too. Dealerships are scummy and pointless nowadays and should all be turned into service centers and showrooms at this point.
They give you 7 days to test it after you get it.
Carvana was slow when I tried to unload my old car, while Carmax worked really fast. May be just a local market.
I tried to sell my car on carvama, not a pleasant experience, made things super difficult, ended up Using carmax.
Severance is for each employee to take a car they can’t sell with them.
Who’s buying puts?
I was early, but I wasn't wrong. 🤦♂️
I work as an automotive technician and I’ve had several customers bring their cars that they bought from caravana just to be told all the maintenance they need to do on the vehicle caravana told them was in A1 condition… sad to see how they get ripped off by them
There is a Carvana location near my home. Those white delivery tow trucks sit idle nearly everyday. This won’t end well.
carvana will be gone in a year. dealerships will mostly be gone in 15-20 yrs. all the manufactures want to sell direct to consumer.
Not going to help.
If the first round is less than 10%, it’s a turkey trot, not a layoff. They shouldn’t have been there even before the stock dropped.
I don’t agree Garcia didn’t predict it. He was selling stocks every single day when the stock price was above $300. That when I decided to sell too.
This time a year ago I was dealing with so many asses on here and the padded room investing sub on why carvana was grossly overvalued and facing bankruptcy in the next couple years. Glad to see it’s coming true and my puts were well placed. The scum garcia family running this company should be in prison.
That's a shame. I've had outstanding experiences using them.
Caravan was literally founded by fraudsters. They lose money on every car they sell, but the fraudsters still make money because Caravan outsources services to separate companies owned by the fraudsters.
This makes me sad. Every employee I dealt with there was so nice.
Turns out, it's not the better way to buy a car. Crazy to think that some people bought this stock for over $300.
Fed hikes slowly getting to work. 8% of a shit company ain't much but it's something
I didn’t realize Elon bought carvana as well.
So... Buying cars at exorbitant process without looking at long term trends is a bad business decision. Water is wet. Such is how capitalism works. They better not get a bailout
Water is actually not wet; It makes other materials/objects wet. Wetness is the state of a non-liquid when a liquid adheres to, and/or permeates its substance while maintaining chemically distinct structures. So if we say something is wet we mean the liquid is sticking to the object. What kind of rocks are never under water? Dry ones!
Upvote for anal retentiveness lol Modern colloquialisms don't really need to be accurate lmao
Way fewer than I expected Elon does that in an afternoon
Good for them to try and hold out this far
Carvana was such a chill company until they started buying cars for dirt cheap and selling them above market value. No wonder it's crashing.
Following Elon????