Carvana to cut 1,500 jobs as online auto dealer’s troubles mount(bloomberg.com)
bloomberg.com
Carvana to cut 1,500 jobs as online auto dealer’s troubles mount
https://www.bloomberg.com/news/articles/2022-11-18/carvana-says-it-will-cut-1-500-jobs-as-company-s-troubles-mount
93 comments
https://archive.ph/99DvI
This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun sports car since it'll be super affordable?
There isn’t going to be a fire sale. Their margins per car are positive and have only contracted about 20%. The margin isn’t enough to sustain their business, but the cars are priced in line with the market. Worst case, they would restructure in chapter 11 and continue to operate retail as normal.
> There isn’t going to be a fire sale.
That depends on the interest to carry a car in inventory. Contracting margins plus increasing "floorplan" (what dealers call the line of credit they use to buy inventory) rates can be devastating.
That depends on the interest to carry a car in inventory. Contracting margins plus increasing "floorplan" (what dealers call the line of credit they use to buy inventory) rates can be devastating.
If they can’t carry their inventory, they’ll go to another retailer through wholesale auction or direct buy, and show up for sale elsewhere at market prices. Carvana even owns an auto auction chain, which they bought to secure access to inventory but now might use to preferentially liquidate.
The value of their inventory is plummeting and those margins will continue to contract for however long it takes the last couple of bubble years to work their way through the system. Maybe the brand would survive a bankruptcy, but the equity definitely won't, and the bondholders are going to take a serious haircut too.
Pandemic quality builds of large, expensive internal combustion vehicles at a time of soaring gas prices, limited parts, and rising labor costs.
Parting them out might make sense.
Parting them out might make sense.
Is that a joke? Parting out cars is very labor intensive and only makes economic sense in limited circumstances. Outside the HN bubble, most US consumers still want internal combustion vehicles regardless of gas prices.
Just a tongue in cheek way of suggesting the vehicles are worth less than the sum of their parts.
I don't know that there's a HN bubble. Devotion to ideology seems to be kept in check by people known for their work who'll occasionally come down off the mountain.
what's the difference between a bubble and a point of view? Is my BoF meetup biased because we're sticking to certain subjects?
I don't know that there's a HN bubble. Devotion to ideology seems to be kept in check by people known for their work who'll occasionally come down off the mountain.
what's the difference between a bubble and a point of view? Is my BoF meetup biased because we're sticking to certain subjects?
You're rich enough to be on here not working at Taco Bell. A taco bell employee wants a Tesla but will buy the ICE
> Worst case, they would restructure in chapter 11 and continue to operate retail as normal.
The market need that Carvana met was reducing the hurdles of buying a used car for those people who generally don't buy used cars. The biggest hurdle is financing. The second biggest is fear of getting a lemon, which is why they have those inspections, guarantees of service and taking the vehicle back. The last hurdle was doing this from the convenience of your home and not dealing with car salesmen. All of these were things that could be done by others, but with more frictions, and Carvana was lowering the bar.
In exchange for adding this value, they are able to charge a premium. That premium is not coming from expert selection of car inventory or buying the cars for less.
Unfortunately the cost that carvana spends to provide these value adds exceeds the premium they can charge. That was true before their margins contracted, and it's even more true now. In fact, carvana is being squeezed like a sandwhich, as as their funding costs are going up even as the willingness of buyers to pay a premium for carvana services are declining, causing the gross margins to go down.
Carvana's biggest cost is rising interest rates. They literally borrowed at 10% in order to extend 5% auto loans to their customers. This is the problem they are in. And there's nothing they can do about their funding costs - investors charge them a premium because it's not clear that carvana is going to be around. Declaring chapter 11 is not going to give them a lower cost of capital, so they will need to get rid of their fleet somehow.
Now whether the fleet goes for a big discount to end consumers has nothing to do with Carvana, because odds are some middleman will buy the fleet, rather than having them do a going out of business sale. We are talking about billions in inventory - an alarming accumulation of inventory:
https://www.macrotrends.net/stocks/charts/CVNA/carvana/inven...
At a higher interest rate, you need to move inventory more quickly, because you are effectively taking out a loan when you buy the car and pay for a warehouse in which it sits and does nothing. The cost of carrying that inventory is higher when rates go up. It is higher for carvana and for whomever buys the fleet. This applies to all inventory everywhere.
So, don't look for special discounts from carvana, look in general for falling prices in the sector as a whole, as dealers and manufacturers continue to get squeezed by the twin rocks of rising interest rates and falling demand.
The market need that Carvana met was reducing the hurdles of buying a used car for those people who generally don't buy used cars. The biggest hurdle is financing. The second biggest is fear of getting a lemon, which is why they have those inspections, guarantees of service and taking the vehicle back. The last hurdle was doing this from the convenience of your home and not dealing with car salesmen. All of these were things that could be done by others, but with more frictions, and Carvana was lowering the bar.
In exchange for adding this value, they are able to charge a premium. That premium is not coming from expert selection of car inventory or buying the cars for less.
Unfortunately the cost that carvana spends to provide these value adds exceeds the premium they can charge. That was true before their margins contracted, and it's even more true now. In fact, carvana is being squeezed like a sandwhich, as as their funding costs are going up even as the willingness of buyers to pay a premium for carvana services are declining, causing the gross margins to go down.
Carvana's biggest cost is rising interest rates. They literally borrowed at 10% in order to extend 5% auto loans to their customers. This is the problem they are in. And there's nothing they can do about their funding costs - investors charge them a premium because it's not clear that carvana is going to be around. Declaring chapter 11 is not going to give them a lower cost of capital, so they will need to get rid of their fleet somehow.
Now whether the fleet goes for a big discount to end consumers has nothing to do with Carvana, because odds are some middleman will buy the fleet, rather than having them do a going out of business sale. We are talking about billions in inventory - an alarming accumulation of inventory:
https://www.macrotrends.net/stocks/charts/CVNA/carvana/inven...
At a higher interest rate, you need to move inventory more quickly, because you are effectively taking out a loan when you buy the car and pay for a warehouse in which it sits and does nothing. The cost of carrying that inventory is higher when rates go up. It is higher for carvana and for whomever buys the fleet. This applies to all inventory everywhere.
So, don't look for special discounts from carvana, look in general for falling prices in the sector as a whole, as dealers and manufacturers continue to get squeezed by the twin rocks of rising interest rates and falling demand.
> They literally borrowed at 10% in order to extend 5% auto loans to their customers.
how could that possibly make any business sense to do?
how could that possibly make any business sense to do?
Well summarized!
Probably more like July.
It's going to take a long time for these loans to get liquidated, and then processed through the repo markets.
And likely the lenders will hold the repo'd asset longer if they can to not create a glut of vehicles. The way this really get's great for buying repo'd sports cars is if we get forced liquidations from the lenders.
It's going to be a bloodbath.
It's going to take a long time for these loans to get liquidated, and then processed through the repo markets.
And likely the lenders will hold the repo'd asset longer if they can to not create a glut of vehicles. The way this really get's great for buying repo'd sports cars is if we get forced liquidations from the lenders.
It's going to be a bloodbath.
According to some video I saw on YouTube, there's already a large number of repossessed vehicles that banks are being very slow to release to the market, because they want to keep the prices high.
That's something that works when repossessions are still relatively low. Right now, most people are still employed and car payments are pretty high on the list of must pay bills, right behind mortgages. It's the same thing hedge funds do when taking or exiting a big position, move slowly to avoid spooking the market.
If someone like Carvana has to liquidate cars at a loss to keep the lights on, you're going to see a FLOOD of cars hit the market as you'll have a rapidly depreciating asset and nobody will want to hold.
If someone like Carvana has to liquidate cars at a loss to keep the lights on, you're going to see a FLOOD of cars hit the market as you'll have a rapidly depreciating asset and nobody will want to hold.
If that was the case, why isn't the same thing happening to Carmax and Vroom and the other Carvana-style used-car dealers?
Used car prices are falling and I assume it would hurt all of them, but it seems to be hurting Carvana more than the others.
Used car prices are falling and I assume it would hurt all of them, but it seems to be hurting Carvana more than the others.
Not sure about Vroom, but carmax actually performs proper car inspections before purchase. They are not moving fast and breaking things.
Not sure about Vroom, but carmax actually performs proper car inspections before purchase.
Those CarMax inspections are so valuable that vultures patrol the parking lot, and if you leave without selling your car, they'll follow you home and make an offer on your car.
It happened to me. CarMax said the car was worth $8,500. I wanted to bring in my other car for an evaluation to decide which one to sell. A guy followed me to the grocery store across the street, approached me in the parking lot and started his pitch with, "I'll give you a thousand dollars more than whatever CarMax offered you."
I asked him if he wanted to look under the hood and take it for a test drive or anything, and he said he didn't need to, because CarMax had already done the hard work for him.
(My life situation changed shortly thereafter and I didn't end up selling either car.)
Those CarMax inspections are so valuable that vultures patrol the parking lot, and if you leave without selling your car, they'll follow you home and make an offer on your car.
It happened to me. CarMax said the car was worth $8,500. I wanted to bring in my other car for an evaluation to decide which one to sell. A guy followed me to the grocery store across the street, approached me in the parking lot and started his pitch with, "I'll give you a thousand dollars more than whatever CarMax offered you."
I asked him if he wanted to look under the hood and take it for a test drive or anything, and he said he didn't need to, because CarMax had already done the hard work for him.
(My life situation changed shortly thereafter and I didn't end up selling either car.)
Haha. In Austin I hear radio ads from a chain dealer (Henna) where they promise to pay you $500 more than whatever Carmax appraised your car at.
Is there any evidence of this? I assumed they buy cars at wholesale auctions, maybe wash/clean them, and put them on sale, like any used car dealer does.
I have asked a couple of used car dealers (not CarMax specificially as there isn't one near here) if they do anything to these cars to prepare them for sale. They just laugh. The margins are not there to repair any problems, so what is the point of inspecting them?
I have asked a couple of used car dealers (not CarMax specificially as there isn't one near here) if they do anything to these cars to prepare them for sale. They just laugh. The margins are not there to repair any problems, so what is the point of inspecting them?
Of course there is.
I detailed cars at a dealership and my friend detailed cars at carmax when we were young.
Used car dealers are bottom feeders in the car sales. They generally have crappier cars than big dealers. I'm sure there are exceptions. When I worked at one they did shady fixes and would never purchase car from one.
CarMax performs multi point inspection. They have their own detailers, paint and repair shops. CarMax knows exactly what they are doing and their business model is sustainable.
Purchasing cars ala carvana is insane. In the car groups people often talk about offloading cars with issues to carvana and them sending a tow truck to pick it up. Zero inspections.
I detailed cars at a dealership and my friend detailed cars at carmax when we were young.
Used car dealers are bottom feeders in the car sales. They generally have crappier cars than big dealers. I'm sure there are exceptions. When I worked at one they did shady fixes and would never purchase car from one.
CarMax performs multi point inspection. They have their own detailers, paint and repair shops. CarMax knows exactly what they are doing and their business model is sustainable.
Purchasing cars ala carvana is insane. In the car groups people often talk about offloading cars with issues to carvana and them sending a tow truck to pick it up. Zero inspections.
I don't haven't been following CarMax, but CarLotz was another new entrant to the field that went public via an SPAC IPO in 2020 at a value of $1.9B that now has a market cap of around $24M. They are also trying to merge with Shift, which is in a similar state.
Noticing a trend in these "disruptors" in that they can't survive. I'm really not sure how CarMax and these other vendors are even being considered in the same category.
Pardon my ignorance, but why would used car prices necessarily impact a used car dealer? Surely these dealers have to pay more to buy these cars and so their margins should be unchanged? Or is the issue that they are buying used cars and prices are falling so fast that their margins are shrinking?
Because they need to keep the cars on their lots on their books. If car prices drop 25% they lost 25% of the value of their inventory.
Not that car values have crashed 25% or will.
Not that car values have crashed 25% or will.
I bet they will crash 25%. On the wholesale market, that might have already happened.
I was seeing 20-year-old Ford Rangers and Chevy S-10s with 200k miles listed on Craigslist for $10k a month ago. If you adjust for inflation that is actually more than they cost when they were new! Pick pretty much any make and model of car and you will see the same thing.
Even just from looking at Craigslist occasionally I have noticed a significant drop in prices for used vehicles in the past month.
I was seeing 20-year-old Ford Rangers and Chevy S-10s with 200k miles listed on Craigslist for $10k a month ago. If you adjust for inflation that is actually more than they cost when they were new! Pick pretty much any make and model of car and you will see the same thing.
Even just from looking at Craigslist occasionally I have noticed a significant drop in prices for used vehicles in the past month.
They will lose money if used car prices drop because they will have to sell their inventory for less than they paid for it.
Supposedly Carvana went crazy and overbid everyone for cars sight unseen online. This massive inventory is now depreciating at full percentage points on a weekly basis with volume way down.
Maybe. Yes, the constrained supply caused a lot of people to overpay for cars, and the average monthly payment for a car surged over the last year. The deep sub prime folks will be struggling, especially as layoffs happen and people with no savings are stuck with a $700/m car payment. Repossessions have already started picking up, and there are reports of huge parking lots being filled with repo'd cars, and those cars failing to sell at auction. Obviously, if the big players can control supply enough, then I don't think there will be a fire sale. But it remains to be seen if they can accomplish that (I'd be surprised, I'll bet they'll have to liquidate and like you say, it'll all come crashing down). In any case, the Carvanas and Carmax type places, as well as unemployed consumers that have a big car payment on a soon-to-be-worth-a-whole-lot-less car are really in deep shit. Smells kind of like 2008, but this time with cars instead of houses.
Source: https://www.consumerfinance.gov/about-us/blog/market-monitor...
Source: https://www.consumerfinance.gov/about-us/blog/market-monitor...
Any reason those cars wouldn't sell at the going (probably high) used car rate at the time? e.g. https://publish.manheim.com/content/dam/consulting/ManheimUs...
>Is March of 2023 the right time to pick up
I hope so. I've been without a car since just before lockdown in 2020, and it has been long enough (by some time now). It's just an insane time to buy a car, so the time without continues to extend. I might be able to survive another 6 months ;)
I hope so. I've been without a car since just before lockdown in 2020, and it has been long enough (by some time now). It's just an insane time to buy a car, so the time without continues to extend. I might be able to survive another 6 months ;)
Yes.
This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities
You say "potato," I say "potato."
You say "potato," I say "potato."
The concept is great. But the volatility in the used car market has been historically unprecedented, and there's no easy way for them to hedge this.
As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation.
That is an insane move on a durable asset.
As an FYI, I sold a car this spring for 8% over what I paid for it 6 years prior, i.e. it was worth about 85% of orig price adjusted for inflation. Today, edmunds appraises it for 45% of orig price adjusted for inflation.
That is an insane move on a durable asset.
The concept is great but I never really saw the point of Carvana when CarMax already exists.
Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.
Unless your plan is just to leverage easy capital to push CarMax and traditional dealers out of the business like Uber and taxis.
Carvana did deliveries to your home (apparently), while CarMax would deliver to their nearest lot, which might be a long way away.
I scrolled through Carvana inventory, picked a used car, purchased it, and it was delivered to my driveway like a week later. I live very far from any decent-sized car dealership.
I did all this laying in bed on my phone.
I have some complaints about the quality of their service, but the value prop is pretty amazing.
I did all this laying in bed on my phone.
I have some complaints about the quality of their service, but the value prop is pretty amazing.
Did you get the real/legit title of the car signed over to you?
I purchased a car from CarMax earlier this spring online and it was an easy process. Filled out some forms online, went through some questions on the phone and then had a car dropped off in my driveway a few day later.
Carvana came to my house and picked up the car I was selling. It was all done in a few minutes. I didn't have to take any pictures, just describe it on the web form, and sign some papers when they showed up.
Have you looked to see if they followed through with the paperwork with the state to ensure the state no longer thinks you own the car? One of the complaints I've seen is that they are woefully behind in areas like this so that the new "owner" isn't really the legal owner because some paperwork hadn't been completed by Carvana
I filed it myself in California. Doesn't matter who I'm selling to, I file the release of liability immediately. I don't want to pay for someone else's parking tickets or other much worse crimes.
I am sure it was but that is a ridiculous business model when the secret sauce of the whole operation is economy of scale along with no ability to improve margins much.
I am sure they could cut the lawn and feed the dog while there also but none of this sounds profitable in the long term.
It almost sounds like we were in a giant bubble...
I am sure they could cut the lawn and feed the dog while there also but none of this sounds profitable in the long term.
It almost sounds like we were in a giant bubble...
Getting a quote just by entering your license plate was also brilliant.
Certainly shocking that they are struggling with excess inventory and need to cut jobs.
Carmax is an Amazing operator. Shift has now cut test drives at home.
I was just looking into the market for my own comparison. I bought a 9 year old minivan back in January, and I can't find any deals quite as good as what I got (granted, I spent a few weeks finding that.) So I guess in my area (Virginia) I upgraded at a good time.
I'll confirm your sale anecdote though. I sold a 16 year old car in May for 19% more than I paid for it in 2018, having driven it about 45,000 miles over that time (120K -> 165K)
I'll confirm your sale anecdote though. I sold a 16 year old car in May for 19% more than I paid for it in 2018, having driven it about 45,000 miles over that time (120K -> 165K)
Very similar experience selling my car to Carvana last fall. I wish I put the obvious pieces together sooner about how they can't keep overpaying for cars and stay solvent.
I've purchased 2 vehicles through Carvana, and honestly the process was fantastic. I feel I got a fair deal on both vehicles, the quality was good, and everything as advertised. I did all the paperwork online and when I showed up to pick the car up was in and out in just a few minutes.
The only problem I had was that the delivery tower didn't work when I dropped the coin in both times. First time the car was for me and I didn't really care. The second time it was for my son I would have really liked their gimmick to work.
The only problem I had was that the delivery tower didn't work when I dropped the coin in both times. First time the car was for me and I didn't really care. The second time it was for my son I would have really liked their gimmick to work.
This is completely anecdotal but there's been a couple of times during COVID when I was stuck at a light next to a Caravana truck on it's way to drop off a car and I noticed what appeared to be non-trivial issues underneath the car.
I just don't get how people can buy a used car without seeing it or sending over a professional to look at it first.
I just don't get how people can buy a used car without seeing it or sending over a professional to look at it first.
I bought a Nissan Rogue two months ago with Carvana - it had a 7 day no questions refund, free repairs for a year, and we got to test drive for 30 mins before they signed it over to us. Overall I felt very comfortable with this purchase, much more than a small local dealership or even worse a stranger on some FB group.
I buy older cars than Carvana seems to deal in, but I love the Craigslist and FB cars.
I get to the meetup point early (better if it's at their house where I can make judgments from that), and then I watch them drive up. Talk to them for a while, see if they're knowledgeable, etc. Then inevitably you get a name over the course of messaging/texting/email, and you can get more insight about their background. You get to talk to them for a while and find out why they're getting rid of it. If you've gotten to the point of trusting them (otherwise, you're long gone), ask specific questions about car history, and you can have reasonable hopes that they'll tell the truth.
Anyway, the car's been great, and he told me some problems that I would have taken 6 months to discover on my own.
I get to the meetup point early (better if it's at their house where I can make judgments from that), and then I watch them drive up. Talk to them for a while, see if they're knowledgeable, etc. Then inevitably you get a name over the course of messaging/texting/email, and you can get more insight about their background. You get to talk to them for a while and find out why they're getting rid of it. If you've gotten to the point of trusting them (otherwise, you're long gone), ask specific questions about car history, and you can have reasonable hopes that they'll tell the truth.
Anyway, the car's been great, and he told me some problems that I would have taken 6 months to discover on my own.
It's been a while since I bought a car, but this approach has worked out very well for me as well with every vehicle I've bought from a private party. Meet the previous owner, talk enough to decide if you trust them (walk if you don't), and learn about what the car's gone through. I'm much more nervous to buy a car from a dealer who usually has no idea what the car's been like aside from the state in which they brought it in.
If there's a specific model or models I'm shopping for, I do some research (reviews and forums) to try to get to know their quirks and pitfalls so I can check for them when I go to see the car. I tend to over-research big decisions but with cars it's useful to know what I'm getting into and what to watch for in the future.
If there's a specific model or models I'm shopping for, I do some research (reviews and forums) to try to get to know their quirks and pitfalls so I can check for them when I go to see the car. I tend to over-research big decisions but with cars it's useful to know what I'm getting into and what to watch for in the future.
How did your best and worst story go when it comes to this?
30 minutes and 7 days is not a lot of time to find out if something is wrong.
You can return the car in within first 7 days for any reason.
Doesn't it feel a bit insane to do things in that order though?
Most car sellers I've encountered will allow a prospective buyer to take a car to their mechanic to to be looked over BEFORE purchase.
The biggest downside here is if you trade your existing car into Carvana. Sure you've got 7 days to get that newly-purchased car inspected, but what happens when you get the inspection results back and decide you want to unwind the transaction - Carvana will take back the car you purchased but they will not bring your trade-in back to you. Not to mention the general paperwork hassle and the hit to your credit score (if you're financing), all for a car you're not keeping.
Most car sellers I've encountered will allow a prospective buyer to take a car to their mechanic to to be looked over BEFORE purchase.
The biggest downside here is if you trade your existing car into Carvana. Sure you've got 7 days to get that newly-purchased car inspected, but what happens when you get the inspection results back and decide you want to unwind the transaction - Carvana will take back the car you purchased but they will not bring your trade-in back to you. Not to mention the general paperwork hassle and the hit to your credit score (if you're financing), all for a car you're not keeping.
Is there any way to actually know that was a car out for delivery, and not being picked up? When you sell your vehicle to Carvana they come to you with the same flatbed truck and haul it away.
Not that I don't doubt the cars they sell are sometimes (often?) trash. I sold a 370z to them this summer and the amount of due diligence they performed before paying was practically nil. They didn't even open the hood, or drive it more than the half mile around the block staying <20mph and probably <20% throttle too. It was mildly horrifying to this ex-gearhead who's bought and sold over a dozen cars/bikes in my time.
Great way to sell your car, awful way to buy your car.
Not that I don't doubt the cars they sell are sometimes (often?) trash. I sold a 370z to them this summer and the amount of due diligence they performed before paying was practically nil. They didn't even open the hood, or drive it more than the half mile around the block staying <20mph and probably <20% throttle too. It was mildly horrifying to this ex-gearhead who's bought and sold over a dozen cars/bikes in my time.
Great way to sell your car, awful way to buy your car.
non-trivial issues?
When I was shopping for a used car in late Summer 2020, Carvana was priced 10-20% above traditional dealerships in the area for same make/model/trim/year/mileage. The traditional dealership process sucks so some people will pay the premium for a better experience, but as everyone's financial calculus has changed recently it may be that the number of customers who want to pay for that experience is receding.
I hate traditional dealerships, I usually would take an entire day off work to do the silly price/trade-in/finance dance because without exception it takes the better part of a day. The cost of using a vacation day (for a SW person) is close to a wash with the overhead cost of Carvana, Vroom, etc. They have much more selection on colors, trims, mileage, etc. than any local dealership and decent used cars have been scarce the past couple years.
With the 7day/100day cushion (100 days or some # miles for mechanical/safety repairs like brakes) I thought they might be losing money because the car had issues which their repair firm had to take care of. Not many local used car lots are going to do that. Maybe they were scooping up less than ideal inventory and its eating away their profits with the repairs.
With the 7day/100day cushion (100 days or some # miles for mechanical/safety repairs like brakes) I thought they might be losing money because the car had issues which their repair firm had to take care of. Not many local used car lots are going to do that. Maybe they were scooping up less than ideal inventory and its eating away their profits with the repairs.
Just buy directly from a private seller. I've never haggled more than 10 minutes over the price of a car (hint, most of them don't like it any more than you do). Make a fair offer, hand over the cash, and drive home. It's the only way I do it now.
As an aside, it's kinda sad that you need to cost your vacation days (unless you're a contractor). One of the better EU laws is that you must take your holidays and can't just cash them out, which is better overall, I think.
I've had numerous heavily subsidized Lyft and Uber rides, and it was pretty great. I'm currently a member of WeWork All Access, and it is pretty great.
Edit: I think I misinterpreted your review as glowing, but it was just stating your experience. The towers not working is pretty sad. It reflects the company operating in la-la land though.
Edit: I think I misinterpreted your review as glowing, but it was just stating your experience. The towers not working is pretty sad. It reflects the company operating in la-la land though.
They've been shut down in Illinois twice and they're still in legal hot water. Blame interest rates and inventory yadda yadda but they've been moving fast and breaking things too long. Their VP is facing 50+ criminal charges in this state alone.
https://jalopnik.com/carvanas-legal-counsel-ordered-to-appea...
https://jalopnik.com/carvanas-legal-counsel-ordered-to-appea...
Meh, looks like a bunch of regulatory capture by existing auto-dealerships.
Failure to transfer title would make me extremely mad as a customer
> “The State of Illinois has charged me because Carvana delivered a car to a customer’s home,” Breaux said in a statement provided by Carvana.
Sounds like they transferred the title but it wasn't "by a dealer", so it was illegal. In addition:
> In a separate filing on May 12, the agency charged Breaux with two counts of Carvana operating as an unlicensed used-vehicle dealer.
You can of course look up the relevant code on Illinois' wonderful online legislation document: https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=0625...
Sounds like they transferred the title but it wasn't "by a dealer", so it was illegal. In addition:
> In a separate filing on May 12, the agency charged Breaux with two counts of Carvana operating as an unlicensed used-vehicle dealer.
You can of course look up the relevant code on Illinois' wonderful online legislation document: https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=0625...
I had the same issue with Beepi. Had a friend who worked there -- I got the sense that complying with a bunch of interstate car sales was rather tricky and they often had issues getting through the state DMVs.
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I find it interesting that Carvana's CEO is the son of DriveTime's CEO.
https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-e...
edit: space
https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-e...
edit: space
Carvana is destined for acquisition or bankruptcy. They have WAY too much inventory that they overpaid for. Consumer demand has plummeted and new car supply is bouncing back (up 78% year over year). They have too much debt on their books to make the model work. Good thing the CEOs dad cashed out when he did.
Why does an online car webpage need 18k+ employees? I don't get why they are so huge in employees.
The webpage is the simplest part of the business. They need drivers to pick up and deliver cars from every address in the nation. They have a fleet of hundreds of custom car-hauling trucks to maintain. They inspect, appraise, repair, detail and take 3D photographs of half a million cars a year -- that's thousands of mechanics, detailers, photographers. They deal with vehicle registration, state inspections and titling in 50 different states and all the 3000+ counties within. At any given time they have 50-100K vehicles all around the country to track, with lots of them in motion at any given time, a big 24/7 logistics and regulatory problem.
I'd be curious to see what amount of the staff is actually lost and from what divisions. I doubt it'll be anyone working on the actual vehicle side of the business.
Carvana is a DriveTime spinoff, and leverages their existing infrastructure for all used vehicle processing -- massive warehouse-style facilities designed to process those vehicles as rapidly as possible and stage them around.
Carvana is a DriveTime spinoff, and leverages their existing infrastructure for all used vehicle processing -- massive warehouse-style facilities designed to process those vehicles as rapidly as possible and stage them around.
Not every address in the nation. No availability in Hawaii, at least not on the Big Island.
Carvana likely has very few engineers. Most of the employees are in operations facilitating car purchasing, inspecting, pricing, etc.
Bro, are you kidding me? How the cars get to the dealers? How is the inventory managed? Delivered? Purchased? Service Centers? Customer Service? Legal? Etc etc etc.... Its not "Just a website" and your incredible oversimplification is atrocious.
The engineers make a fuss when you ask them to clean and appraise cars and make the website at the same time
Kids these days...
Rather detail a car sometimes than deal with Jira.
All of the iBuyer like companies are going bankrupt. Turns out there just no way to cut costs enough to make a profit in these low margin, capital and asset intensive industries. The idea that Carvana, OpenDoor, Redfin, Zillow, etc. were ever going to achieve something like a monopoly over their respective industry was laughable at best. Doomed from the moment they opened the doors.
Carmax is very successful, not sure what they have to do with these tech companies
Whoops, didn't know that they were that profitable. My bad.
That’s a huge impact to the Phoenix job market, which isn’t quite as robust as the bay.
Can one negotiate with Carvana?
That's a bummer. Wonder how many cars are sitting unsold.
Had a pretty bad experience trying to sell a car to them so not surprising