Automotive bubble....has it burst?

benXJ said:
Carvana isn't a scam no more than any other used car dealer is. They are all flash and make their money on financing.
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.... except that the company doesn't make money.

Because it's a scam.
 
shawn said:
.... except that the company doesn't make money.

Because it's a scam.
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Lots of companies dont make money.
Either because of poor management or because of loss leader marketing or...a myriad of reasons.

You seem to have some deep thought here and I'd love to read it because I have no love loss for carvana...but saying they are a scam because they don't make money is...disjointed.

Airbnb, Uber, Zillow, Spotify, Chewy, Boeing, Bed Bath and Beyond...none of which have turned a profit (ie made money) in a while (if ever)....but that doesnt make them a scam.

I think a better descriptor is Carvana is a marketing vehicle (pun intended) for a fairly successful (albeit slightly predatory) lending company...
 
Carvana was bullying their way into the market with venture capital $ and overpaying for used vehicles, to drive competition out. That's not a scam, its been done plenty. Too bad for them the market is tanking and the VC money is running out. That's not a scam either, thats bad luck/planning.

They still sell used cars (where they are still allowed to)
 
When gas prices went sky high a couple months back, I remember Carvana had cornered the market on a specific vehicle I was looking at (Chevy volt FWIW). It was weird, because 95% of the volts were being sold by Carvana (at a HUGE markup). They had such broad market share, that their pricing set the standard for the model in the industry. Everything at Carvana was considered a "good or great deal" because it was representative of the "market value".

Do some searching on them, you will find lots of stories of people waiting years to get the title to a vehicle they purchased. Genius when you think of it....there is no brick and mortar store to go raise a fuss at, all you can do is fight through the phone and email....

AWFUL!
 
See…my limited experience with Carvana is completely different...but I've only seen the selling to carvana side. I think I even started a thread about it several months ago. My mom and dad, both, have traded their way in 'free vehicles' over the last 5 years. Carvana was making them offers every 12-18 months. They'd roll whatever Carvana paid them in to the next one...and the offers were usually what new MSRP was at the time of purchase, if not $5-7k higher. They're just driving little Jeep patriot/renegade things, so they'd go to whatever dealer was offering the best incentives/cheapest NEW Jeep patriot/renegade replacement. By the 3rd or 4th time this happened, no more car payments, and they both drive brand new vehicles. Edit...and it's important to note that my folks are the types to finance a vehicle for 84 months, so it's not like they were on an expedited payment schedule, skewing back end cash.
 
UTfball68 said:
See…my limited experience with Carvana is completely different...but I've only seen the selling to carvana side. I think I even started a thread about it several months ago. My mom and dad, both, have traded their way in 'free vehicles' over the last 5 years. Carvana was making them offers every 12-18 months. They'd roll whatever Carvana paid them in to the next one...and the offers were usually what new MSRP was at the time of purchase, if not $5-7k higher. They're just driving little Jeep patriot/renegade things, so they'd go to whatever dealer was offering the best incentives/cheapest NEW Jeep patriot/renegade replacement. By the 3rd or 4th time this happened, no more car payments, and they both drive brand new vehicles. Edit...and it's important to note that my folks are the types to finance a vehicle for 84 months, so it's not like they were on an expedited payment schedule, skewing back end cash.
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this doesn't argue for Carvana being a good business model....
 
Ron said:
You seem to have some deep thought here and I'd love to read it because I have no love loss for carvana...but saying they are a scam because they don't make money is...disjointed.
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Company is structured to funnel money to the Garcias (personally) and to other Garcia-owned businesses. Class A/B share structure ensures they can operate like a closely-held company despite being publicly traded. They have only had one profitable quarter, even after going through one of the most profitable periods for car dealerships in recent history. Meanwhile, the Garcias pocketed billions (with a B) buying and selling class B shares in the open market. CVNA buys inventory from other Garcia-owned businesses (Drivetime, etc), then sells them at a loss. That wouldn't be remarkable if the intent was to make money on the financing, except that they don't do that, either. As the company has grown, their loss per vehicle has increased. There never was any shareholder value there. Now that the share price has collapsed, we'll see how low it has to go before the Garcias offer to take the company private.

Related:

www.forbes.com

Feathered Nest

Ernest Garcia is turning Ugly Duckling into his golden goose.
www.forbes.com www.forbes.com

Ron said:
Airbnb, Uber, Zillow, Spotify, Chewy
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Distinction without a difference. $chwy? Fucking scam. $ba different (737 max). $bbby death spiral

$ba:

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vs:

1668037932847.png
 
img_1_1669517346478.png
 
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UTfball68 said:
I’m not even sure how to process what’s worse there…144month finance period, 25.89% rate…or the fact anyone would $90k to someone that needs 144 months or only qualifies for a 25.89% rate.
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The worserest part is the $98k finance charge on a $90k vehicle.
 
LT1JEEP said:
If you do the math 144 months X $2,149.86 = $309,579.84 surely somebody didn't pay that for that.
There must be something written wrong or a typo. Surely nobody is that stupid.
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You’d be surprised. All I saw was a beautiful green M3.
 
How much does that thing sticker for? Hope you like as much in 12 years as you do now. You could have bought you a Bentley cheaper than that car.
 
LT1JEEP said:
How much does that thing sticker for? Hope you like as much in 12 years as you do now. You could have bought you a Bentley cheaper than that car.
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I have to assume someone on skid row kicked the crack habit, saved a bit of coin and they’ll be pulling all the ladies in the tent city for the foreseeable future.
 
LT1JEEP said:
How much does that thing sticker for? Hope you like as much in 12 years as you do now. You could have bought you a Bentley cheaper than that car.
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I'd take a purdy green M3 over a Bentley any day.
 
LT1JEEP said:
If you do the math 144 months X $2,149.86 = $309,579.84 surely somebody didn't pay that for that.
There must be something written wrong or a typo. Surely nobody is that stupid.
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I didn't even get around to that yet. Could be fake too. But I worked with a girl who had a 400 credit score and around 20% rate on an 84 month loan for a 10 year old Honda Accord that she bought from a sketchy overpriced car lot.
 
I know a few people who has a buy here pay here car lot, They get double what the cars and trucks are worth and most have salvage titles. I have sold them several cars over the years and i made good on them when i sold them.
 
LT1JEEP said:
If you do the math 144 months X $2,149.86 = $309,579.84 surely somebody didn't pay that for that.
There must be something written wrong or a typo. Surely nobody is that stupid.
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I'm pretty sure this whole thing is fake
 
RatLabGuy said:
I'm pretty sure this whole thing is fake
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Yeah…I actually googled a few minutes to see if 144month term was actually a thing. Thought maybe being Cali they had some sorta first time car buyer thing with a low income kicker…didn’t come up with anything.
 
I got offered 90 month financing on a used Subaru last night. I thought he was joking, but he was dead serious. I was amazed when he told me the average payment and term that they see is $900 a month and 84 months. Not like it was a high end place, it’s just a dang Subaru dealer.
 
thecj3man said:
I got offered 90 month financing on a used Subaru last night. I thought he was joking, but he was dead serious. I was amazed when he told me the average payment and term that they see is $900 a month and 84 months. Not like it was a high end place, it’s just a dang Subaru dealer.
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Every now and again on my FB feed there’s a channel that pops up and does ‘what are you driving and what are you paying’ with employees at dealerships. I have a navigator, financed for 36 months, I did put 50% down…but figured my monthly would be higher than most. This channel, the majority of responses are in the $1000-2000/month category. Maybe it’s all scripted and for clicks, but even if only part of them are true…no wonder Covid revealed 75% of Americans couldn’t afford a $4000 emergency.
 
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