They're basically a bank that makes money on the loans. Kind of like an airline that makes far more money from credit card fees than they do actually flying people around (hint, this is every major domestic carrier).

Selling cars is just how they corner a market for loans. The same way operating flights and offering loyalty points is a way to corner a set of credit card users.

I don't think they're long for this world and definitely VERY exposed to rates more than a normal dealer, but not as "fake" as that substack leads to believe. But multiple things can be true, because their market cap is well beyond what they're actually worth.

I think CarMax is also struggling pretty bad. Sitting on large inventory that they can't sell without taking huge losses. Probably a different issue than what's going on with Carvana.

I think there was a dealership in Houston years ago that sold everything on sticker price, no negotiations. Supposed to be a good deal. But I guess people like thinking they're getting a good deal by negotiations.

bigtruckguy3500 said:

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I think CarMax is also struggling pretty bad. Sitting on large inventory that they can't sell without taking huge losses. Probably a different issue than what's going on with Carvana.

I think there was a dealership in Houston years ago that sold everything on sticker price, no negotiations. Supposed to be a good deal. But I guess people like thinking they're getting a good deal by negotiations.

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Doug Demuro had an interesting segment recently about the downfall of Carmax. I had no idea Carmax was founded by Circuit City.

Teslag said:

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Buck Turgidson said:

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Somehow we have two trucks in our driveway from that fake dealer. Both were good experiences. They may not be a profitable business in the long run but Id buy from them again in the future.

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Same have had several good experiences with them both as buyer and seller.

Carvana has also started selling new Jeep/Rams in the DFW area as they expand into new vehicle sales.

Everyone who hates dealers and salesmen should be cheering on Carvana. I am.

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Several problems.

1. Where will you test drive? YOU may know what you want or even what trim, but a lot of buyers don't. With carvana, you order it and get it. If you're going to go jerk a dealer around driving his cars, you'd like find out that they'd offer you whatever deal you think you'd get at Carvana.

2. In a lot of cases, maybe not all, the dealership price is actually cheaper. Here is one example of what is clearly the exact same vehicle.

Carvana: https://www.carvana.com/vehicle/4209574?refSource=srp

DFW Dealership: https://www.autonationchryslerdodgejeepramnorthrichlandhills.com/inventory/new-2026-jeep-wrangler-sport-four-wheel-drive-sport-utility-1c4pjxanxtw160144/

The dealership, by their ad, is $2500 cheaper. I'd bet you can get a lower negotiated price inside. That's just one example. I found others where the pricing discrepancy was as much as 10 grand in the dealership's favor, but I couldn't confirm trim levels. So it might not have been quite that much, but it was lower.

3. While you can probably get more on any trade with carvana, you can do that without buying from them. I told my last dealer to go jump in the lake on their trade offer; got 50% more from Car Max -- but I did buy the car I was looking at from them.

4. Every new car, and most used cars, I've bought in the last 25 years (approximately 10) have had some form of service special included. Toyotas included at least a year, maybe 2, of service. While you can argue they build that price in, I got pretty decent deals in both cases. I bought a new 4Runner, traded it for a Tacoma, and didn't pay for an oil change for close to 4 years.

5. Dealers suck because they don't make any money on the sales floor. They make their money in service and other areas. Thus, they're a pain to deal with in many ways. But that's due to intense competition. When Carvana has to compete, and I mean REALLY compete, I can assure you the experience won't be as great as you think it is.

So has anyone had challenges getting a title from Carvana?

Curious how close to your asking price they were. I got an online bid from Carvana for an 18 Chevy 2500 gas today and I thought they were way low. But it does have a cracked windshield, a few dings, and 180k miles.