Is Carvana Broken?!?

[tonyinsd]

It doesn't matter if it's tulip bulbs, the South Sea Company, dot com companies, houses, crypto, meme stocks or cars.

When you hear people say that there's no way to lose money and only chumps aren't in the game, just wait.

A lot of extremely confident people are going to eat losses on their "investment" sooner or later.

Sponsored

 

[WNYEscapee]

I wouldn't say their model is completely broken, it's perhaps more that some of their potential customers are wising up about paying thousands more than a used vehicle is worth and doing so with escalating interest rates to boot. At the end of the day, if there's a market correction, which seems to be happening now, you didn't just pay a higher interest rate on an overpriced used vehicle, it is now worth even less as book values also have corrected themselves too.

 

[gte105u]

Looks like Carvana is giving low ball offers because as others have stated Carvana is struggling as a company and has too much Maverick inventory.

Luckily there are other online car companies like Vroom, Carmax and others.

I just got my Vroom quote of $34,500 and it is higher than Carvana's offer of $34.294 from 7/1 and much much higher than the ridiculous low ball offer from them today 7/24 of $28,547

So all the current talk on this thread that the used car purchase market is collapsing as we speak is just hyperbole as the issue is Carvana not the others.

Carvana was hit worse than others, but they were all hit. Carmax sales were down 11% for Q1 year over year. I did a quote from Carmax a few months ago on my 2015 Edge with 134k miles. It has dropped 30% since then.

The market is correcting.

 

[DeeZee]

A local used car dealer in my area that sells nice clean cars is asking $17,500 for a 2005 Taco with 105K on the clock. Overall very clean, but pitted aluminum wheels, a few dings and a chewed up leather stick shift knob. No bed liner. Insanity.

Yea my son just graduated college and got a great first job however he needs to commute for awhile. Looking for a mechanically sound 4 banger at a decent price has been tough.

However over the past few weeks I have seen cars listed and not selling right away.

 

[RonFLA]

It’s possible that Carvana’s algorithm is getting stronger as it matures too. It likely knows when the seller reaches a second or third offer, they may be more desperate to sell, having already shopped around and are back for a fast sale, thus offering less than the initial offer.

 

[DeeZee]

From my perspective, several people ordered Mavericks and when you have to wait 9-12 months some of us look for alternatives. During the long wait period, some of us purchased vehicles with shorter delivery times. I am in that category, so when my Maverick, ordered Oct 23, 2021, arrives chances are I may not have a use for it.

Can you imagine Ford not delivering Maverick’s and by the time they start showing up people back-out because they moved on….in addition the market being flooded with the Carvana fire-sale…lol

 

[RonFLA]

Something to consider is Carvana and any of these virtual dealers have to constantly be buying/selling vehicles quickly to keep the money loop moving. Their model fails if they can’t flip vehicles quickly.

A first year vehicle, like the Maverick, is very desirable but it’s also more risky too, with several recalls delaying their quick sales model. Dealerships being incapable of completing recall repairs due to staffing shortages and parts delays all slow Carvana’s sales and profit, impacting future quotes.

 

[Ryan2200]

From my experience like another poster mentioned, by the 3rd offer it seems like they drop the price like a rock! I was checking every few days and trying to alternate email addresses while not being signed in. This seemed to help. However, I sold my Maverick on Tred.com for almost 4K more then Carvana’s best offer. I also tried Carmingo and that was a bust too. Their highest bid was under Carvana’s offer. Here’s some more info on Tred.com if anyones interested:

I would definitely recommend Tred.com I have used them to sell 2 vehicles one being a Maverick and can’t not be happier with the outcome. Sold the Maverick for $3800 more then the best Carvana offer I had(seems to fluctuate by the day). I did have the title in hand for my Maverick sale however if you have it financed they will take care of paying off the lender.

They basically act as a escrow service. The buyer pays them, they verify the funds, then tell you it’s safe to release the vehicle to the buyer or their transporter and then you get paid the next day! Both parties are protected! Then they send you a mailer to send you title to them. They handle the title work.

After selling 2 vehicles I would recommend NOT to spend the extra money to make your listing “Tred certified” Doesn’t seem like if payed off at the end. Their regular listing option is perfect.

Here is some more info and a referral code if anyones interested:

TRED referral coupon code is:
Q2Yxb7eGPu



They Get:
$50, once they complete their transaction.
30% better price, on average, than buying from or selling to a dealer.
Security of dealing with vetted buyers, and payment and the whole transaction guaranteed by TRED.
Convenience of TRED handling all paperwork, so they don’t even have to set foot inside a DMV.
TRED is also a great way to sell a car if they have a loan or lease

 

[Guv]

I would concur that the auto and housing markets are starting to fall back in line with something more realistic, well, at least as realistic as the current day is. I have seen autos sitting on lots now, and houses not being bought unseen and over the listing price. The entire economic structure is messed up. Those who bought boats and campers during the pandemic are trading them back or giving them back now via repossession. (speaking for my region only) And I still don't get how people are paying their bills by staying away from employment. Carvana went beyond their business plan, which from what I had read, was originally aimed toward $20-30k vehicles and the majority of the middle class workers who could make a $300-400 monthly payment and add the gimmick of getting an option to receive your car from a "vending machine ", or having it delivered.

I would add to this in South Texas anyway. Full size trucks driving on the interstate at speeds that have to be giving them sub double digit fuel mileage numbers. What kind of gas/diesel bills do these idiots get each month. To add, not just big trucks either, they are just the most fuel inefficient private vehicles, usually

 

[Mite-o-Dan]

I tried to get an estimate for my brand new Maverick XLT Hybrid and much to my surpise, it gave me only 24k!? Same thing with my other car which I've getting estimate with equity of at least 2k now seats 2k-3k below what I owe!

Is this the end of the era of flipping cars? I have not tried any other companies so I can't compare.

Anyone have the same experience recently?

Did you look because of my post on Ford Maverick Truck on Facebook yesterday? Carvana offered me basically the exact same price I just paid for my hybrid XLT. Though Vroom offered me just over 3000 more. Either way...wow.

 

[Mite-o-Dan]

This was my June offer

Check it now. Unless it's top of the line, it won't be over 30k.

 

[Poorhouse]

Had this happen selling our 2019 Highlander to make room for a 2023 Maverick.

Offers from the online dealers had dropped by $8k-$10k. The only one that didn't was Driveway.com. Sold it to them for just over $37k a couple months ago. Easy transaction. They had it listed within a few weeks for $41k.

 

[volksnuts]

Idk, the offer I got from Carvana in March was $30k
Last week they offered $28.9k (with 9k more miles)

Carmax gave me $30k, though the bank draft still hasn’t cleared
They also have not yet listed it on the site for sale

 

[KevCuRaoi]

Something to consider is Carvana and any of these virtual dealers have to constantly be buying/selling vehicles quickly to keep the money loop moving. Their model fails if they can’t flip vehicles quickly.

A first year vehicle, like the Maverick, is very desirable but it’s also more risky too, with several recalls delaying their quick sales model. Dealerships being incapable of completing recall repairs due to staffing shortages and parts delays all slow Carvana’s sales and profit, impacting future quotes.

I don't think Carvana should be too impacted by recalls. New vehicles cannot be sold w/ open recalls, but used vehicles generally can (if properly communicated to the customer). They may find that people don't want a Maverick with an open recall, but I don't think there is anything that prevents them from selling it.

 

[LSchicago]

I tried to get an estimate for my brand new Maverick XLT Hybrid and much to my surpise, it gave me only 24k!? Same thing with my other car which I've getting estimate with equity of at least 2k now seats 2k-3k below what I owe!

Is this the end of the era of flipping cars? I have not tried any other companies so I can't compare.

Anyone have the same experience recently?

Carvana is struggling hard. I doubt they will survive another year. There license to sell cars was pulled again last week, for the second time in 2 months. They have been overpaying, not making money on sales, and not delivering titles in the allowed timeframe. It's only a matter of time for them.

Sponsored