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 ...
Maybe time to start a repo company...or too early?
Funny how the author never mentioned how many miles were on the car when Carvana bought it.
Thanks.
If you read to the bottom of the article where they show a “comparable” car with 13,697 miles and then say the car in the story had 17,000 more, I’m guessing 30,000 miles.
Repeat after me, “Too big to fail.”
I’ve bought and sold to Carvana several times since 2015. Nothing but great experiences.
“the company [carvana] averages over $4,000 in profit for every car it sells. “
that right there sounds suspicious as all get out ... i get that used car prices are going through the roof, but that would make it even more difficult to add $4,000 profit on top, ESPECIALLY if they’re paying top dollar to start with ...
“They must be making money on these somehow.”
or lying about it ...
$4,000/car profit per used car sale?
“They came back with $595. It’s worth probably 10-15 times that.”
sounds like yet another “glitch” in their algorithm ... either that, or there are a bunch of little ol’ ladies from pasadena that they’re shaking down, and that’s how they supposedly make $4,000 profit for every car sold ... still, that would take A LOT of little ol’ ladies ...
Well, sure because they know that they can turn it around and sell it for 24 or 25k.
Yes.
I was saying to a friend I’d like to buy a new car that doesn’t have all that stuff. It’s nice but not necessary.
It’ll get worse.
TechnoTotalitarianism is real.
Financing and 7 year loan terms??
They came back with $595. It’s worth probably 10-15 times that.
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Yeah, they get it wrong a lot, and it can go either way.
They offered 4,500 more than I paid new on one of our cars, but they were also way underpriced on our truck.
“Financing and 7 year loan terms??”
that would do it ... i’d forgotten about car loans since i pay cash ...
Same here. A few months ago it seemed like they had like 10.
I love signing in to certain websites where I have to prove to a robot that I am not a robot!
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;-)
I’m supposed to turn in my 2018 F-150 company car in the next few days. I can buy is for $17,000. I think I can resell it for $25000.
I work part time for an auto parts store delivering parts to repair shops. I am running my entire shift to different shops. They are all very busy and trying to hire help. People are fixing their cars rather than buy new. I chat with everyone at these shops. They are raking in the bucks. I see every car imaginable in these shops. Most are probably just out of warranty and have under 100k miles.
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