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Posted on 02/12/2022 1:41:40 PM PST by nascarnation
In December 2014, I bought a Honda Fit right off the lot. It had 23 miles, and I paid $20,814.80, including accessories and an extended warranty. This December, a buzzy startup called Carvana drove away with my car, cutting me a check for $20,905 — leaving me with a profit of $90.20.
Not only that, but Carvana’s offer was $5,000 higher than Vroom, $6,000 higher than TrueCar, and $7,500 higher than CarMax. Carvana’s offer changed day by day, too: the final one I accepted was $1,338 higher than its lowest quote.
I knew I had everything going for me — low mileage, no accidents, and desirable trim at a time when car prices are going through the roof on a model that Honda discontinued. And yet, it sounded ludicrous. Used cars almost never sell for more than their original price, and the company knew next to nothing about me. Yet, Carvana’s algorithm had agreed to pay $20K for my car sight-unseen, even bring a pre-printed check to my door, before any inspection took place. The online quote arrived so fast, I knew a human couldn’t have been involved.
But Carvana didn’t become the fastest-growing digital car dealership in the United States (and the third-fastest company to ever make the Fortune 500 list) by asking pesky humans the price of a car. Instead, it built a computer system, one it trusts so implicitly that no employee was ever going to question what my Honda Fit was worth.
(Excerpt) Read more at theverge.com ...
Interesting but sounds like an advertisement.
Well, robots are people too...
One of the finance guys I follow on Tweater says the Garcias (the Carvana major domos) are shady operators. I don’t know much about the company.
OK, but what will he replace it with and for how much?
That is what markets do. Remembering the early 70s when a popular Japanese compact was $5000 on the lot and $6000 in the used car market. Didn’t last, but shortages do that for a time.
Well, the richest guy in Arizona is a Carvana founder, living just a few miles away from me in Tempe. They must be making money on these somehow.
I remember being very pleased to buy a new Honda Accord in 1982 at “sticker” price with no dealer add-on bucks.
“One of the finance guys I follow on Tweater says the Garcias (the Carvana major domos) are shady operators. I don’t know much about the company.”
I don’t either, but it’s the used car business.
I don’t know why they call it a robot, it’s an algorithm. A chunk of decision tree logic.
So, this is for real?
It seems possible, with supply and demand being what it is.
I would love to find a Maxima like my old deceased one, a 1998 model with a Lexus engine.
It died after 22 years of hard living.
went by a KIA dealership and they had maybe twenty cars
I notice this all over.
Seems like every brand has depleted inventory.
We live near some Ford/Chev/Ram&Jeep stores that usually have many hundreds of rigs on the lot.
Now they look sparse.
Just for grins I went to the Carvana website to find out what their computer program would give me for my 2005 Jaguar S-Type with 93,000 miles in great shape and a great color (dark red).
They came back with $595. It’s worth probably 10-15 times that.
I’m thinking of getting a new car later this year. Toyota if so.
Maybe it’s not a good time to buy?
The safty valve in a car deal is that the buyer can walk away and pay 80% of his note in a year and 70% in two. When car values drop by 20% as the value of the dollar and industry recovers expect another fake credit crisis in 2024.
Banks lending inflated value to overpriced assets is neither the general populations or the buyers problem. Lending principals must be adjusted during out of wack markets, but with the SJW in charge that has not happened.
The merchant banks still in the business are going to eat this one just as the spread should result in great profits. I fully expect a big name, or a car credit firm to fall on its face....hard.
I love signing in to certain websites where I have to prove to a robot that I am not a robot!
In June 2021 I bought a 2007 Volvo XC90 for $7,000.
It was in decent shape and had 130k on it so I bought it. I wanted it for something I could mess around with and not worry about door dings or etc.
When I took it to a Volvo dealer to get it checked they found one thing to fix - the master cylinder for the brakes needed a new gasket. $20.
The sales manager offered me $10k on the spot for it.
A month or so later a dealer in Wisconsin of all places sent me an email offering me $13k.
Last month I had the car into the dealer again (best Volvo shop around here) and had them put in a new Bilstein suspension with a 3” lift. Cost me just north of $3k.
They offered me $21k for it.
Crazy.
A vehicle like your Jag is going to sell more to an enthusiast.
I think Carvana wants stuff that is mass market, fast turnover.
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