Not even the people at carvanna can figure out why they are paying so much for cars. Seems to me like their ai is programmed to win vs get the best deal despite what they say. When prices fall they could be stuck with a bunch of upside down cars.
Not even the people at carvanna can figure out why they are paying so much for cars. Seems to me like their ai is programmed to win vs get the best deal despite what they say. When prices fall they could be stuck with a bunch of upside down cars.
Interesting, the amount that Carvanna offered me for my car was the same as the dealership. I still wonder if the availability of microchips and the china workflow, is still trickling down to used cars being expensive because it's hard to get a new car and dealerships are looking pretty bare for new and used cars. Sort of like the crazy housing market.
The article feels of "paid endorsement." There are some key items left out.
The article does too good of a job saying great things about Carvana like that Carvana gives the highest trade price. Also says something about how this should be how all cars are sold.
EDIT: late in the article they show a car with 13.6k miles and mention that the blue one here had 17k more miles. This means the Fit in question had just 30k miles. That's ultra low for a 7 year old car. So, as exciting as the headline is, this wont be easy to repeat.
Yes, we know there are some "oddities" in the new market. I recently sold a 2007 Prius that I bought in 2016. After 5 years and 81k miles, I sold it via FB for exactly what I paid for it.
In reply to John Welsh :
When CARVANA first debuted it was fairly well known that they were paying top dollar for cars, but they were also going for the very best cars. CarMax tells you they won't sell you a vehicle that has been flooded/water damaged or frame damaged, but there seems to be a higher standard at CARVANA in that they will try to avoid buying cars that have been involved in " fender benders ". (Not entirely sure that is the case now.)
BTW, I bought my current DD in May 2021, a 2013 Ford Fusion "S" that at the time had just under 18,000 miles. It had been in a fender bender and even after the before sales prep there was paint overspray on the headlight. To CarMax's credit they discovered a very hairline scratch in the windshield, right in front of the driver, that looked like dirt...yet they had SafeLite replace the windshield for free.
I do wish that I could have gone with CARVANA but their inventory is only 1/2 to 2/3rds of CarMax's inventory. And CARVANA doesn't have as varied a selection in their inventory.
It's a bubble. Bubbles pop.
You're better off, if you absolutely must have a used car right now, buying a car from somebody on Craigslist with a credit card advance (if you don't have cash).
If everybody's charging that much, it will be that way forever, right? No.
Carvana and its two main competitors are performing an experiment (called gouging and market cornering) relative to how stupid and desperate people are to visually compete with their neighbors. Don't participate.
I'm currently car shopping (as in, I'm typing this while I wait for the guy at the dealership to call me back).
I'll be trading in a car. I ran it through Carvana, Carmax, Vroom and KKB (Immediate Cash Offer!), and had it appraised at three dealerships. One dealership was low by a couple of thousand dollars, but the others were all pretty much within $100 of each other. I suspect that every dealer will know the CarVroomaMax number before they come back to you with a trade in number. That gives the customer one less reason to walk out, and that gives the dealer a chance to put more used cars on their lot. They traditionally make more profit on used cars anyway, so they may have a little more room to pay-up for their used inventory.
And for the record, I ran the numbers on the same used car more than a year ago and it was about $5000 less back then.
Used car prices right now make me want to ride my bike.
Looking at Civic Si's right now (sort of). Used ones sell for more than new ones, but there aren't any new ones available. I could order a new one and pray.... and wait..... and pray.... .and wait, which I might do. I really like that the '22s have a spoiler instead of a wing and I like the new orange color. I also like being the one owner of a new car. Maybe I will get lucky and find a used one where someone bought orange and decided they didn't like it after all.
While this current used car pricing phenomena was great for moving my Si on to a new home with no cost at all to me for one year of ownership, I pray that we don't need to buy a replacement car due to accident, theft, etc. anytime soon. My intention was leaning towards replacing my now DD older/high mileage Accord with a new BRZ, but I now don't see that happening for at least a year, if not two.
Looking at data on dealer profits, apparently not having inventory of new cars on the lot is really boosting their overall profits, as there is no carrying cost for those vehicles. Who knows - maybe this all translates into a new normal of ordering new cars vs. picking from what is available in dealer inventory, paying list price or close to it, etc. Isn't that pretty much what it is like to buy a new car in Europe already?
Carvana is all flash and glitz to sell cars to people who want the newest cellphone or tablet every year. They misrepresent the cars on their website. When you do buy the car, you have already put it on your insurance, when they come to drop it off to you it's already "registered" in your name, you already have the insurance, and well you might as well just take it.
I would never buy a car there, nor ever even look at cars available there. I "bought" a 2012 Focus. Had to put it on my insurance ASAP, scheduled delivery. delivery day comes, I get a call, they have no idea where the car is. Reschedule for next week. Next week comes and I get a call. No trucks to deliver the car, nor drivers if they had trucks (this was back in 19 before all this stupidity happened). I could drive the almost an hour and pick up the car. Wife brings me to the car. Lady from Carvana comes outside with the keys and a tablet and just says sign here. Uh, nope. Go inspect the car. Large dent in the A pillar, broken headlight and taillight, multiple scratches, evidence of bodywork in the rear quarter and on and on and on. Plus it's got a temp plate on it from Georgia....car was supposedly from Virginia and I'm in Connecticut. Refuse the car, cancel the 2 weeks of insurance I had to pay for. Call customer service to complain, the only answer is Sorry, please buy another car.
This is a great opportunity for any new car manufacturer to gain market share if they can make vehicles available.
Low inventory is great for profits don't need many salesmen and the demand is high enough you don't need to discount to compete with other dealers.
We have reached a whole new level of LEAN management since it's become acceptable to be weeks behind the demand. Nobody seems to be able to come up with a competitive solution to take away market share from large companies right now.
Carvana is not really in the car selling business, they are in the loan selling business. Cars just happen to be what they use to get there. Good jewelry stores sell jewelrey, Zales sells credit, etc.
I got quotes from all the places for my Golf R. Local VW dealer offered me the most, until the broker I ran my car purchase through beat them by about $500.
I did ok on the purcashe price of the Land Cruiser. Definitely could've found one cheaper a few years ago but at the same time I drove the R for 2.5 years for nothing, so it equals out...
In reply to calteg :
Makes me wonder if when the New car market normalize if the dealership coalitions will go after them, and put them under.
In reply to trigun7469 :
Forecasts are for a tremendous amount of consolidation in the used car market over the next decade. The most aggressive forcasts project only 20% of used car dealers will be independent by 2032. I find that a little hard to believe, but the Vroom/Carvana/Driveway business model is effectively removing front end gross from the equation. Independents will have to be VERY lean or face extinction if this trend continues.
calteg said:In reply to trigun7469 :
Forecasts are for a tremendous amount of consolidation in the used car market over the next decade. The most aggressive forcasts project only 20% of used car dealers will be independent by 2032.
I'm trying to decide if this is a good or bad thing for consumers. Car dealerships (especially used car dealerships) tend to be very anti-consumer and frequently use high-pressure/predatory tactics to sell cars. Additionally very few people (myself included) even know how to properly inspect a used car when purchasing.
The flip side being that this is further deminishing the opportunity for independent operators to thrive in a market segment not all that dissimilar to what happened to main street retail stores vs Walmart and mom and pop hardware vs big box orange.
In reply to ClearWaterMS :
Aren't many leases now being written to not allow 3 party sales at the end of lease? Essentially this is GM saying that at the end you either buy it or hand it back to GM. At least giving GM first right of refusal.
This makes it harder to buy a Ford next time since you have to wait for your GM lease to end or makes buying another GM "more convenient" than buying a Ford.
If GM (in this example) does buy up those cars on first right of refusal then they gain used car market share because they have the inventory.
GM's CarBravo
GM is in the process of taking the purchases of off lease vehicles away from the normal auctions to online auctions only available to GM dealers. That's going to hurt Carvana, Vroom, and Carmax.
AnthonyGS (Forum Supporter) said:Looking at Civic Si's right now (sort of). I really like that the '22s have a spoiler instead of a wing and I like the new orange color. I also like being the one owner of a new car. Maybe I will get lucky and find a used one where someone bought orange and decided they didn't like it after all.
That will be a slim find - I too like the orange. The local Honda guy told me to come in and order one - is it really that long? Yikes.
I think somebody is getting these at sticker, driving 1000 miles then flipping it on Carmax to make some money. The one on Carmax is at $35,000 for a '22 Si.
In reply to Datsun310Guy :
Awesome $7,000 over full retail and 7,000 miles.... that's a screaming deal! I mean SCREAMING!
We do indeed live in bizzarroworld.
Wow. I thought prices here were getting high. They're 200 -300% higher on that site. Is it real, like are people actually buying at those prices?
John Welsh said:In reply to ClearWaterMS :
Aren't many leases now being written to not allow 3 party sales at the end of lease? Essentially this is GM saying that at the end you either buy it or hand it back to GM. At least giving GM first right of refusal.
This makes it harder to buy a Ford next time since you have to wait for your GM lease to end or makes buying another GM "more convenient" than buying a Ford.
If GM (in this example) does buy up those cars on first right of refusal then they gain used car market share because they have the inventory.
GM's CarBravo
i recently traded in a leased Audi before leasing my current BMW. The Audi dealership offered to pay me trade-in value and was within $500 of the cost that Carvana/Vroom/etc. offered. This still net me around $4500 in my pocket. i.e. there are ways, dealerships are competing for clean good condition lease trade ins and if there is money on the table, somebody will offer to give you a piece of it to win your business.
Leasehackr.com has plenty of threads/advice about ways to mitigate the strategy of manufacturers making it difficult to buy out leases at the end of the lease. There are a lot of dealerships that will buy your car online and send a transporter to pick it up and still get close to the price that Carvana/Vroom/etc. are offering. If you live in California you can buy your car and flip it and providing you do it in 15 days you don't have to pay the taxes, that is the only state that allows that.
Wooooooooooow.
Just found out that a customer paid $36,5 for a used Encore (the Buick, not the Renault) that needed nearly $4k in repairs and scheduled maintenance.
Woooooooooow.
In reply to John Welsh :
GM tried something very similar to CarBravo years ago, it crashed and burned back then too. Exactly zero of my GM clients are planning on signing up. Without massive dealer support, I don't forsee it doing any better this time around
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