Given all the issues that Stellantis brands have had, you might assume that it would be a terrible time to buy a Chrysler Dodge Jeep Ram dealership franchise. Yet, that’s exactly what mega used car retailer Carvana did. Is this in order to start selling new cars? Perhaps, but there are much better reasons why Carvana might want a franchise and it has to do with three little letters.
It’s interesting that Carvana didn’t buy a Nissan dealership, or at least hasn’t purchased one yet. Nissan dealers seem to be a mess right now and one of their issues revolves around online ordering systems, which is something Carvana does quite well. If making cars is hard, so is selling cars. BYD might have the hot hand in China right now, but the company’s attempt to move vehicles in Germany hasn’t quite gone to plan.
Tariffs for the auto industry were in effect for about two days and were, as expected, quasi-reversed yesterday. What does this mean? Automakers are scrambling to explain how they’re going to build more cars in the United States before another deadline in a month.
You Down With CPO? Yeah You Know Me!
This week we learned that Carvana bought Jerry Seiner Chrysler-Dodge-Jeep-Ram of Casa Grande, Arizona, not far from the nationwide used car retailer’s headquarters. It’s a big deal. Carvana is a monster company and it’s managed to attract a lot of business by simplifying the used car purchase process and putting it mostly online. To some consumers, being able to pick a car online and have it delivered to their door is appealing. The company stumbled during the pandemic, but has roared back to life over the last couple of years.
Used cars, though, exist in a different universe from new cars. Someone can’t just start a dealership and call up GM, Ford, and Jaguar and just ask for new cars to sell. You have to buy a franchise from that automaker and, with that franchise comes a lot of rights as well as a lot of obligations. Selling used cars allows Carvana, within local and federal laws, to get around a lot of the obligations.
As Truman Capote once said, the problem with living outside the law is you no longer have the protection of it. The same applies to Carvana. The most obvious issue that Carvana faces as a seller of used cars is accessing used car inventory. Carvana, like dealers, accepts trade-ins. However, Carvana doesn’t lease new cars and, therefore, does not have access to off-lease vehicles, which is a big source of good used cars.
Here’s the current state of wholesale inventory from Manheim:
The market is up a bit year-over-year, but look how far it is from pre-pandemic levels. The whole industry is facing a huge shortage of high-quality used cars because, three years ago, tight supplies meant people weren’t buying or leasing as many new vehicles.
Having a dealership gives Carvana, which ships cars around the country every day, access to more high quality used cars. It can also, it’s assumed, participate in dealer-only auctions for cars. But it goes way deeper than that, as Car Dealership Guy points out in his latest email about this:
Right now (like many segments of the used car market) CPO cars are in shorter supply and will continue being tight this year. And by owning a CDJR dealership, Carvana can (in theory) certify Stellantis models under the automaker’s CPO program—adding warranties and quality assurances that boost buyer confidence and resale value. It’s a smart strategy that could elevate margins and reduce the number of returns.
Certified Pre-Owned cars historically command a higher price and, if costs are controlled, a higher margin. Being able to advertise CPO cars on the Carvana website would be a huge deal as, currently, Carvana only has “Carvana Certified” and not manufacturer-backed certified vehicles. Additionally, as CDG points out, Carvana could also get dealer wholesale pricing on parts and more help with service.
And all that’s from owning one dealership! In theory, it’ll sell new cars as well, but those in-the-know don’t see new cars as the appeal here for the company in the short-term. Long-term, obviously, if selling new cars is more successful it would be silly for Carvana not to pursue it, but then it’s competing with the Penskes and AutoNations of the world.
Nissan Has Had A Shop-At-Home Online Program for Years, Apparently
Did you know Nissan had a shop-at-home program? No? Me neither. In just another sign of how much work the brand has to do to get back to profitability at the dealer level, the company is going to try to improve a system that seems to be invisible to many consumers.
With broad retailer adoption, Nissan hoped the platform would standardize the shopping experience across national and dealership websites.
However, Nissan retailers have balked at the factory’s effort to manage the vehicle-selling experience.
“Give us the car on time, get the price right, and let us do the rest,” said a retailer, one of several interviewed for this story who asked not to be identified. “Let us sell the cars; that’s what we have invested in doing.”
Nissan U.S. sales and marketing chief Vinay Shahani said having a digital retailing solution is important as the shopping journey gravitates online.
“But it’s clear that the dealers don’t want just one solution,” Shahani said. “We have to figure out what’s the right offering so that the dealers have flexibility.”
Hyundai is trying something similar with Amazon, with mixed results so far. This seems like an easy thing to do yet, in practice, hasn’t been a slam dunk for most retailers.
BYD Wants To Sell In Germany On Features, Not Price
In all of 2024, BYD sold 2,891 vehicles in Germany. That’s not a lot considering that BYD wants to be a real player in the market at the level of something more like a Volkswagen than a Maserati. Additionally, BYD has two factories planned for the region (if you include Turkey) and is considering, at least, taking over a Volkswagen facility in Germany.
How do you square this? There are now two people in charge of making BYD a success in Europe. The first, Stella Li, is one of the most senior managers in the whole organization. The other, Maria Grazia Davino, was a former Stellantis exec in the UK you might remember as the woman who kinda threatened the UK government.
They both spoke with Manager Magazine about the issues BYD has had in Europe thus far:
MM: Ms. Li, there is a lot going on in Europe against BYD at the moment. Not only is the mood against Chinese products, but the euphoria about electric vehicles is also dampened. The likely new Chancellor, Friedrich Merz, announced during the election campaign that he wants to overturn the proposed ban on combustion engines. You are pushing electric cars onto the market. Doesn’t that harm you?
Stella Li: In the short term, this may unsettle buyers. But in the medium term, we are convinced that BYD will be successful in the market.
MM: What makes you so sure?
Stella Li: We offer the best technology, we bring innovations to the road, our cars are “cool stuff”.
I find this argument fascinating. While the interview goes deeper into the nitty gritty of adding dealers and differing management styles, the idea that BYD doesn’t see itself as a cheaper alternative but a better alternative would worry me if I were a European automaker. Japanese automakers took decades to transition from cheap-but-good to just-plain-good. Korean automakers did it in roughly half the time. What if Chinese automakers cut that time in half again?
The Detroit Big Three Get A Tariff Exemption… For Now
I guess the idea of $12,000 potentially being out on the hood of a new truck was too much for The White House to defend, so Press Secretary Karoline Leavitt announced that there would be a one-month pause for certain automotive activities.
Here’s how the Associated Press describes it:
Asked if 30 days was enough for the auto sector to prepare for the new taxes, Leavitt said Trump was blunt with the automakers seeking an exemption: “He told them that they should get on it, start investing, start moving, shift production here to the United States of America where they will pay no tariff.”
Trump had long promised to impose tariffs, but his opening weeks in the White House involved aggressive threats and surprise suspensions, leaving allies unclear at what the U.S. president is actually trying to achieve.
Automakers are already trumpeting moves to bring more jobs to the United States though, at least in the case of Stellantis, these appear to be moves that were already planned. Most carmakers can’t suddenly change all their production, nor is it particularly efficient to do so. Could GM or Ford move all their production to the United States? Maybe, but it wouldn’t be instantaneous, so how does this resolve? Can automakers just say a bunch of stuff and convince the Trump administration that this is good enough?
At the very least, President Trump has done the seemingly impossible and has made Canadian Prime Minister Justin Trudeau and his beleaguered Liberal Party suddenly popular ahead of elections this year.
What I’m Listening To While Writing TMD
Hey, it’s Manchester’s own super weirdo Freak Slug with “Spells” off her new album. Actually, the album came out in November and I totally missed it. That’s still “new” right? Either way, give it up to the Future Former Mrs. Adrian Clarke.
The Big Question
Have you ever shopped for a car on Carvana? Did you buy one?
Top Shot: Carvana/wolterke/stock.adobe.com
I’ve alsmost sold 2 cars to Carvana. I check them, Carmax, and Give me the VIN when im ready to trade a car in. Then use this as leverage to get the dealers up from their insane lowball offers they give. Only once has a dealer offered me more than them on the initial offer, but that was peak pandemic, and the car was “Highly” modified according to the big dealers. It had higher end coilovers and wheels.
I’ve never heard of Freak Slug and I’m surprised. But now that I know, I’m into it. Thanks, Matt!
Carvana, for when Carmax is just too cheap and transparent about the cars history.
In all seriousness, I look at Carvana exclusively to see what they would give me should I want to sell a vehicle, and to see how much audacity they have on a given day with pricing their vehicles. Spoiler, there’s a lot of audacity.
I tried to use Carvana once, but while it seemed fine at first I had some odd encounters with their staff that just gave me a bad feeling and I decided I wasn’t going to trust their return policy for a car bought sight unseen. I don’t see myself ever giving them another shot.
Convenience is a luxury that many are happy to overpay for. Carvana is the used vehicle world’s application of that hypothesis. Their prices are higher, and their trade-in offers are lower, but they are more convenient for non-enthusiasts to use than going through a dealer or private seller.
Other sellers will give you the runaround and try to hide things, hoping to screw you before you realize it.
Carvana takes away all the confusion and screws you in the most straightforward way possible.
Bought a car a few years ago from Carvana and I’d agree to some of this. The convenience was amazing, and an overall low hassle experience. Carvana’s customer service was top notch too.
On the trade-in, they way overvalued my car though. Carvana offered $12k while local dealers were only offering ~$6k. Now I did overpay for my car for said convenience, but the trade in value more than made up for that. I could have just sold my car to Carvana and purchased elsewhere, but Carvana did give me a much better interest rate than local dealers.
Our vehicle in question was a 2016 Odyssey with ~23k miles, purchased in 2022 from Carvana. Given the age and mileage, there weren’t a lot of comps at the time. The price we did pay could’ve gotten us the newest gen from a local dealer, but with at least double the miles.
I do recall when shopping that Carvana put a huge premium (sign of the pandemic times) on any car that was of the latest generation, with a pretty big drop off in price if you went to the previous gen design.
I think I’d still do it all over again despite paying a higher price for my car between the convenience, condition of the car we got, and our trade in value.
No matter what I plan to do with a car I’m getting rid of, I always check Carvana and CarMax. Sometimes they’re low, sometimes they’re high, and knowing what they’ll offer will NEVER hurt. Personally, I probably wouldn’t buy from Carvana, but I almost sold to them. And their offer got me a better offer from the dealership I traded in at (not a higher value, but close enough that the reduced sales tax made it the better offer).
Yup, my number 1 advice to anyone looking to sell or trade in their car is to check Carvana and Carmax for quotes.
In my instance, the Carvana offer was so much higher that local dealers weren’t even interested in considering matching my Carvana offer.
I bought my 2018 Cayman from Carvana in 2023. The buying experience is outstanding compared to going to a “normal” dealership. The trade value I got for my 2017 Golf R was in line with my expectations. And since you have a week or so to return the vehicle, that was plenty of time for my local Porsche dealer to give it a clean bill of health and insure there weren’t any shenanigans. Overall, the only negative to the experience (and a minor one at that) was that the vending machine part of my local Carvana wasn’t working so I didn’t get to put the big coin in the slot and watch the vending machine deliver it to me at ground level. All things considered, I would definitely buy from them again.
If I understand correctly, the US needs to build cars here to avoid tariffs. So where would the raw materials come from? Also, the labor cost for assembly of individual parts would skyrocket along with many associated areas. Increased labor cost would exceed tariffs.
Wanting to increase US ship building is a great idea. A large ship takes 1~3 years to build. Of course that’s after you decide what type of ship you want and figure out who can build the thing!
But I guess that’s faster than building a WALL!
I wouldn’t hate a return to shipbuilding for national purposes. China’s largest shipyard exceeds all of our shipbuilding capacity, combined. Our days of cranking out ‘Liberty’ ships every 14 days (or whatever it was) are over. We no longer have the national will to do so or the trade skills to accomplish it.
So, if we returned to shipbuilding, it would, IMHO, be because those two items returned.
My dad bought his car from Carvana in 2020. They were (still mostly are) overallowing quite a bit when buying cars so it was likely he was going to sell his car to them anyway, the extra would have more than made up any sales tax difference vs. buying elsewhere. It just happened he found a harder-to-find trim level he wanted in their network. It was a quick process and he had no issues, although would have rather had the ~10 minutes from the whole vending machine theatrics back.
Would he shop it again? Maybe, but more if they’re throwing some kind of promo or repeat/loyalty offer in the mix. He’s subscribed to the valuation email updates for their cars, and I’ve sold to them, so that option would still be in the running. I’ve browsed it but not looked seriously or at the pricing; it would need to be just the right spec and even then I’m iffy.
I am a little surprised at the number of plain, basic, common cars I see around with Carvana plate frames. I get being averse to new car dealers when you’re more looking for Any Used Car, but not sure what tipped those people there instead of CarMax. Could just be pricing, even if Carvana were high, CarMax pricing seems to always be the highest.
Maybe it’s the vehicles I look at, but I have not found this to be the case. But I’m willing to shop their website and have something shipped, so it might be a lot different if I were only looking at what’s on the lot. They aren’t usually a screaming deal, but they are usually competitive with Carvana and often better than the “local” dealerships (so many of them have been bought up by the big national chains, I don’t know what, if anything, counts as local now).
Based on some near-personal experiences (i.e. looking at cars I nearly bought from Carvana but ultimately didn’t for very real title/registration reasons), Carvana appears to get most of their inventory from people dumping problem cars on them and then flipping them with the bare minimum cosmetic work done to fool people into thinking they are fine. Or they buy cars at auction and do jack shit to them other than throwing a bucket of water on them and then sell them “with a warranty” that pretty much no one can use without hassling the shit out of them. Their business is 100% set up to get people to buy out of what appears to be convenience, but judging by the nightmarish reviews of them, the convenience ends IF the car is even delivered.
I have a car right now that was at one point sold to Carvana and I can see why. Let’s just say it has some issues that are a little bit odd for the type of car that it is (like it was abused).
I will say that my warranty experience with Carvana (they give all cars a 90 day warranty) was pretty good when my battery died. All it took was a call from the shop I was at to sort it out and I didn’t pay a dime for the new one.
Otherwise the car has been rock solid since we bought it almost three years ago.
Jerry Seiner has 9 car dealerships in UT/NV/AZ (plus a couple Isuzu Truck stores), so he’s a pretty big player. Given the current state of Stellantis in the US, I’m sure he was more than happy to offload his CDJR dealership.
I tried Carvana once. It couldn’t find the vehicle I specified (which was out of production) by one year, so they had two dealerships contact me to try to sell me vehicles other than the one I specified, which I didn’t like. Luckily these dealerships read my explanation and accepted my no.
Carvana is a glorified scam and run by a guy that used to own sleazy used car dealerships and his nepo baby son. You are paying A LOT for the convenience of their process. Their prices are not particularly competitive, and the fine print is even worse. Their in house financing is Buy Here, Pay Here levels of bad.
I have excellent credit and the numbers they were throwing out for me were absolutely laughable. If you can get them under 10% interest you’re doing pretty well, and I can’t even begin to imagine what sort of rates they con the average normie with a 650 credit score into. I’m sure they’re well into the teens or even 20s.
So yeah, you’re getting convenience…but you’re paying more up front AND more long term for it. You can do your own financing and save some money for sure, but the cost of entry is still steep. There are also endless horror stories out there about cars people bought from Carvana being lemons and the customer not being able to do anything about it. CaRvAnA cErTiFiEd my ass. Again…it’s a scam.
When I dropped my car off at Carvana, the two people in front of me were buying an Audi S5 and Land Rover. I really wanted to tell them not to do it but they seemed so happy with their terrible choices in the moment.
Was it two separate people or a couple buying both? Because the latter was my first assumption when reading and it’s funnier that way.
Separate people unfortunately.
Honestly as far as questionable used Audi decisions go that 3 liter turbo 6/ZF8 combo is pretty reliable. I’m sure you’ll still deal with many of the usual German gremlins but I see Porsches and Audis with that engine hit 6 figure mileage without much issue. Basically…if you’re going to roll the dice on a depreciated German car an S5 isn’t THAT reckless. Angrycatmeowmeow has a pair of Audis with tuned versions of that mill and they’ve never given him any trouble.
…buying a used Land Rover on the other hand is one of the dumbest things you can do. I mean, I get it. I see lightly used Range Rovers with the supercharged V8 and Discoveries with the straight 6 in the mid to high 30s and it sure is tempting. They’re great looking cars, they’re capable cars, they have supple interiors, and hey…that badge comes with a lot of clout.
But it’s a siren song that must be resisted at all costs. I’ve heard nothing but horror stories when it comes to Land Rover ownership and if you think they’ve depreciated when you buy a secondhand one just wait until the bottom falls out. A 10 year old one with anywhere near six figure mileage is going to be worth like $7.
If you absolutely MUST have one for whatever reason just lease it. Do not pass go, do not collect $200.
A $7k Rover sounds like a good deal for someone who knows how to wrench and does not have a 20+ mile commute.
If you want to get there, you take a Land Rover. If you want to get there AND back, you take a Land Cruiser.
Truer words were never spoken.
Buying a used Audi is definitely a roll of the dice, buying a used Audi from Carvana is rolling dice that you have to assume are rigged against you.
I have a friend with very poor credit, who needs a car. While not at Carvana the financing rates she could get approved for on a ~$10k used car were 19%-29%. She didn’t seem to think much of it and was close to pulling the trigger on something, until I did some quick math. At the high end, she would be paying nearly the price of the car itself, in interest alone. I wonder how many people just don’t realize how much interest they’ll end up paying over the life of the loan? I knew a guy in college who bought a Fiesta and his rate was so high that he paid nearly $10k in interest alone. I seem to recall that his rate was something at or above 30 fucking percent.
I feel bad for her because it sounds like she’s between a rock and a hard place but her best move is to pay cash for the nicest used Honda or Toyota she can afford.
Yeah, she had her last car (a 2012 Beetle) repossessed, which sucks. But, on the other hand, she ended up driving way more than she used to, and would have been making payments on it after cresting 200k miles, assuming it made it that far. The 2.5 engines seem pretty robust so maybe that was a possibility.
I keep telling her to go the Honda/Toyota/best low mileage car in budget route but she’s insistent on another VW, either a Beetle or Jetta. At least I talked her out of Mini Coopers and BMW 3 series, and any VW with an engine other than the 2.5. Her mom might end up financing something for her, which could help, but I still wish she’d just take the $3500 cash her mom offered her and buy something outright.
One the things I did in a previous job was auditing credit unions that serve low income communities, the amount of loan applications I saw for 15+ year old BMWs and Mercedes pushing 200K miles at 15% percent was sad.
I still don’t understand how usury has been allowed by credit cards, and auto loan lenders. Suspect lobbyists have something to do with it. Nothing new, but clearly illegal, and now that the CFPB has been neutered by maga, I don’t see it getting corrected.
Yeah, absolutely. If you do find a good deal from them, DO NOT FINANCE. Looking at the FAQs should already terrify anyone with reasonably good credit:
They’ll finance your car if you make less than $500/month, despite the fact that searching by estimated payment shows TWO vehicles at $240/month (and who knows whether that’s a real payment on those $12k cars–I’m not letting Carvana pull my credit). There is no reality in which their financing arm isn’t raking people over the coals after approving financing they can’t afford.
I’ve shopped Carvana quite a bit, but I never quite end up buying. The pricing just doesn’t ever seem to be quite good enough to buy something I am not physically inspecting ahead of time, especially given their reputation for title issues and such.
I wouldn’t rule them out if the deal is right, but I need a better overall deal from them than I do from a local dealer/private seller.
For national companies like this, I tend to shop CarMax a lot more, since I can get cars shipped from a couple other locations to the local one and drive them without any obligation. Their prices aren’t better, but they usually aren’t much worse.
I window shop on Carvana as the 360 degree views are awesome, so it helps get an idea of the layout of the car especially inside. But as far as buying from them probably wouldn’t, like being able to kick the tires.
When I was shopping for a used Mini, they had the biggest inventory (or at appeared to by listing their nationwide inventory as being available within 50 miles of my house). But no way I’m buying a used car without a test drive of the specific car I’m buying. I could accept buying a new car sight unseen, knowing it shouldn’t have been abused and coming with a full factory warranty. But a used car’s value is way to determinate on how the previous owner(s) treated it.
Ding ding ding. And there are tons of nightmare stories out there about Carvana and abused cars being sold as cream puffs to customers.
Someone I know bought an used Pacifica from Carvana with a warranty. They already replaced the engine and the car was a rental based on how it looked when it arrived (Base spec). It was probably more expensive than local dealers but they have bad credit, Carvana is the Nissan of used cars. At least with the warranty they still have a functional vehicle.
I used carvana to buy a 14k mile EV at 50% of the new price. The plate/title issues are real and I had to stay on top of them to get temp tags renewed and get the plates in. Still happy because I didn’t have to deal with salespeople in my face judging me by the wrinkly clothes I wear.
Sold my Tesla to Carvana; they gave me more money than anyone else was offering and I walked out no longer owning a Tesla. It was a double win for me.
I looked at them for my last used car purchase last year. At the time, pricing was higher than even Carmax. Plus, I was buying in the $14-16K range and inventory was low. I also wanted to really inspect the purchase before hand. I know they have a liberal return policy, but I’d rather avoid extra steps by just looking at it before.
Looked during pandemic, but prices were even higher than carmax. Wouldn’t buy from either company.
Carvana’s stumbles here in Illinois over the last few years, including sort-of forgetting to send buyers their titles and pissing off the good people of Skokie with (now-abandoned) plans to build a car vending machine near a forest preserve, have put me off ever buying from them.
Did look but did not purchase.
During Covid times.
Not sure what the final outcome will be re tariffs but do expect the short show to continue. And totally appreciate the good people of Canada responding to the bullshit in kind to what is obviously ridiculous behavior from the White House imbecile in chief here.
But in the short term I expect this tariff game and daily turmoil to continue almost non stop.