Carvana bought my seven-year-old car for more than I paid brand-new

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.

On Tuesday, December 14th, at 4:46PM, the Carvana agent rang to say she was waiting outside, ready to relieve me of my wheels.

I handed over the keys, and she got to work checking the odometer, tapping information into her tablet, taking a few cursory pictures, but she performed no mechanical inspection and asked no questions. Just sign the title, sign away ownership, sign for smog inspection, and here’s your pre-printed check.

Later that week, my bank told me the check looked fine and credited half the balance to my account. The rest cleared the day before Christmas.

So long, 2015 Honda Fit.
Photo by Sean Hollister / The Verge

Charlie Chesbrough, senior economist at Cox Automotive, doesn’t quite believe it. (Cox Automotive publishes Kelley Blue Book, Autotrader, and runs Manheim Auctions.) “I’ve heard crazy stories, but I haven’t quite heard one with a seven-year-old vehicle selling for more than you originally paid.”

Chesbrough explains that it is a wild time to be in the used car market, though — unlike anything he’s seen in 20 years as an analyst. “The only time we might have seen something similar to this was during World War II when the factories for making vehicles shut down, and they switched over to making airplanes,” he tells me.

For the past 21 months, car prices have been rising at an unprecedented rate. Initially, demand dried up in March 2020 when states started

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GM’s CarBravo takes on Carvana, CarMax

With CarBravo, GM aims to boost employed-motor vehicle profits in the confront of escalating level of competition. CarBravo can be certain that a lot more GM cars are held in-household, rather than sent to auctions in which utilized-car or truck suppliers these as Carvana, Vroom and CarMax Inc. typically obtain them.

The announcement comes about a calendar year right after Ford Motor Co. started out a applied-vehicle platform termed Ford Blue Benefit.

“It was about time the factory was undertaking a thing to stave off Carvana and Vroom and anything else that’s heading on,” Corazza stated. “As extended as they guidance it the way they explained they would aid it and advertise it and get it out there to folks, I assume it will do the job.”

Chevrolet, Buick and GMC sellers can enroll right away, and the client launch is predicted to commence this spring, GM said. Cadillac is creating a independent system, GM North The us President Steve Carlisle claimed.

CarBravo, backed by GM’s electronic retail system, will incorporate pricing, motor vehicle record reviews and 360-diploma sights of the auto. The vehicles will be inspected and reconditioned to GM’s requirements.

Qualified autos will occur with trials of OnStar and SiriusXM radio. GM hopes that broader access to its in-car attributes will raise subscriptions, Carlisle stated.

“All of the profits that we get on a new auto write-up-sale, we’re anticipating to get that revenue by the used cars and trucks,” he explained.

Todd Ingersoll, dealer principal of Ingersoll Car of Danbury in Connecticut, who participated in a pilot of the site, expects CarBravo to raise dealers’ World wide web prospects.

“Collectively, any time you can pool your inventory and raise the amount of organic queries that you have, that in a natural way is likely to provide in extra Net leads and drive additional business to our channel,” he claimed. “And which is ultimately what we are seeking to do: raise the small business and hold the cars and trucks in our family members.”

A further sizeable edge to CarBravo is the potential to promote non-GM automobiles that are up to GM’s criteria, stated Corazza.

“It enables us to offer a qualified non-GM car, like a Honda, Toyota, Kia, no matter what, which we normally failed to do extremely properly with on our made use of-vehicle large amount simply because we couldn’t actually supply persons a licensed brand name,” he explained.

GM dealers have about 400,000 applied cars in their stock these days, and GM sells much more than 500,000 GM Money-owned autos annually.

Source has been constrained as the chip disaster hampers new-car or truck creation, pushing additional clients to the used-automobile market place. But Corazza expects a substantial improve in income of non-GM applied autos this yr simply because of CarBravo.

John Allen, basic manager of Allen of Monroe, a Chevy dealership in Michigan, mentioned he’s glad to see GM taking immediate aim at nonfranchised retailers this sort of as Carvana and CarMax. He claimed executives manufactured

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