What Happened To Carvana?
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- เผยแพร่เมื่อ 15 พ.ค. 2024
- From the outside, Carvana is one of the biggest innovations that has happened to the automotive industry over the past few decades. They basically single-handedly popularized the idea of purchasing and selling used cars online, completely eliminating the need to haggle with dealerships and car salesmen. But, there’s more to Carvana that you should know starting with its background. Carvana is actually the brainchild of a rather shady businessman and felon named Ernest Garcia II, who is the creator of the famous American dealership: Drivetime. After achieving success with Drivetime, Garcia the II threw all of this automotive might and resources into his son’s new startup, Carvana, and that’s how Carvana was born. Putting aside its background, Carvana also has several allegations regarding poor-quality cars, lacking registrations, and high markups. This video explains the dark side of Carvana and why the stock just crashed 99%.
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Timestamps:
0:00 - The State Of Carvana
2:18 - Controversial Origins
5:28 - Controversial Success
8:58 - Controversial Fall
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It's telling that Carvana can still exist despite all of this; it really shows how much people hate car dealers.
I've been trying to buy a used vehicle for several weeks and I keep coming back to carvana because of the straight forward price and title and tax being shown but then I quickly change my mind when I think of the risk lol
Pretty much. I invested when they were at 4 dollars a share because everyone was sure they were gonna fail. I'm up 10x right now
@@gabrielgalaxygh No you didn't or you would of sold off long ago kiddo. Move along.
@@OverwatchSIX you don't just sell immediately because it went up. I'm waiting for a hug price hike
@@gabrielgalaxyghBlud just sell now while you’re up it’s grits for them
My job used to do business with Carvana. We handled transporting vehicles sold to Carvana to one of their lots. Let me just tell you, getting into contact with ANYONE from Carvana is absurdly difficult. Not only that, but the warehouses that receive the vehicle were always unmarked with little to no security. Once we dropped the vehicle at it’s designated spot, we are supposed to leave the keys inside a lockbox for safekeeping. The problem is again, there was almost never any security and the parking lot was full of vehicles and I would not be surprised if people straight up just stole from their lot as well. We weren’t responsible for anything that happened to the vehicle after delivery, but it’s been about a year and my company still hasn’t renewed the contract we had in place with Carvana. I thought that they had gone bankrupt so it’s fitting knowing how shady the business always was.
Who would have thought buying cars from a vending machine was a bad idea! 😆
Only thing worse is buying USED cars from a vending machine.
The biggest problem was that they were desperate for inventory so they would just buy whatever. No haggling, they would give you the private seller price basically sight unseen. Anyone who sold a car to them knows how laughable it was, hard to make a profit when you bought a car for basically just as much as you're going to sell it for
Shut up.
Bought a used 2019 Model 3 LR from Carvana a couple years ago and it was an overall terrible experience. When I went to pick it up they couldn't show it to me because nobody knew how to open the door and I should've declined it right then. Long story short, I get the car home and drive it for 2-3 days before I realize the battery was draining quicker and had less range than anticipated; I go through the car settings and see that it's not even a Long Range model, rather a Standard model lacking AWD, dual motors, and almost 100mi additional range. Mind you the difference in cost between the two models is several thousand dollars, so I reach out to the company and they offer me $400 to compensate. Fortunately I was still within the 7 day return window and had them pick it up the next day. The whole thing was shady and there's zero chance I'll ever use them again or recommend anyone else do so.
Sorry to hear that man
The 7-day window should always be used to have a proper paid inspection done. Then you know what you're dealing with.
7 day return period??
2 years ago, sold an 02 corvette to carvana. Gave me more than i paid for it three years prior (no surprise there with the car market). What blew me away was the "inspection" was about 2 minute of a guy walking around the car, followed by a single lap around the housing addition at 10mph. There was nothing remotely investigational in what he did: i just thought to myself "this would be ripe for a scam". You could have incredibly easily ripped them off. I wonder how many people had brakes with the screech tabs broke off, or had autozone clear trouble codes, or just plain "fingers crossed" and dumped bad cars off because carvana paid no attention to the state of the cars they bought.
I had a 2015 Toyota Corolla I bought in 2016 for 13,500 with 20K miles and sold it for $12900 at the end of 2022 with 100K miles. A pretty much new car driven 80K miles for 600 bucks you really can't beat that.
What does that have to do with Carvana? That is Toyota’s high resale value.
@@TheVainakhTribesforget about that, 13k for a 15’ corolla with 100k miles is crazy 💀 bro definitely booked the dude who purchased it, there are older model cars that have less miles and 2 times cheaper 😂
Honestly, the only lesson here is how much the dollar has fallen since 2016.
I didn’t even know what Carvana was.
You are not alone
Woah, that’s crazy hahaha
@@LogicallyAnsweredI hadn't either. I've only ever heard about it from video's like yours. From what I've actually seen, they might just be a figment of other people imaginations.
I would see the big Carvana tower in Illinois, but I could never imagine approaching it physically
Same here 😅
I’ve been an automotive technician for 23 years and have worked for VW for almost a decade. I worked on three vehicles people bought through Carvana. All of them were refurbished with the cheapest aftermarket brakes I’ve ever seen, a Passat TDI that came from them came in the day after the customer took delivery. The check engine light was on and all of the wires for the diesel exhaust fluid system had been chewed through by a rodent. It took a week and multiple phone calls to get them to cover the repair. Then on an Atlas SUV someone bought from them, the customer had a clunk noise. Carvana performed a front brake service and left the caliper bolts loose. One had fallen out completely the other was barely halfway in.
My mom bought a car from Carvana. My friend was detailing it for her and found a bag of weed under the seat. They just do not care 😂
I like your videos that talk about stocks or publicly traded companies. Been studying the market for about a year now and all different looks are appreciated.
I remember seeing those cars on a tower wondered how they get those cars up there? That's all I knew about Carvana. Then I was recommended to sell my dad's car on Carvana. I did a quote and they wanted a VW Jetta that was around $9k KBB price for $3k. Never again.
Great video brother!! Thanks again for the amazing information!!
Thank you as always Daniel!
I had a great experience buying from them, and the more I learn about others experiences, the more I'm amazed how lucky I was, because holy crap that could have been a disaster. 😮
I’m in the same boat. No issues at all… high five!
I also brought a car from them, no issues at all. Very pleasant experience.
Same here
It's amazing how much more customers will voluntarily pay to not have to deal with salespeople. All you need to do is pay the asking price and you'll still come out ahead.
I wouldn’t buy a car sticker off of these guys let alone an actual car, lol.
😂
It's because they scam people. I got scammed by them. The car was supposedly inspected and certified, but within 3 months, the car needed rear shocks, a motor mount, and a transmission. Within 5 months, the car needed the entire rear subframe replaced. within 7 months, it started having major problems with not being able to keep running for long and not being able to go over 2500 rpm. First, the MAF code was going off and after replacing it several times, It occurred that it may be the alternator. Having been paying on the car for a year and having been able to drive it for maybe 3 or 4 months, I decided to stop paying altogether. Great for an "inspected and certified used car" huh?
I would never recommend them to anyone for any reason.
Caravana and Drive time have the same owners AND they are completely open about their joint activities. If you don't think they can make Caravana show a profit one quarter and then yank it away by changing some numbers, you deserve to invest in this stock
It’s a wide known issue where I live, that they do not send people their car titles and refuse to do anything when people complain. The DMV will laugh and tell you this if you ask for help getting your title. The DMV is tired of the complaints and couldn’t care less. They will not make any effort to help you either.
I was one of those people who was thinking about buying a used car through Carvana. I needed one to get around town. However, that ended when I read that Carvana was banned from selling in my state of Illinois. I ended up at a local dealership (the car I bought hadn't even gotten to there when I made my choice).
Put 13k in at 8.50 a share & still holding
There is a company called We Buy Cars in South Africa that does the exact same things and they are extremely criminal.
I bought a car, waited a month with an actual delivery time and date. I only found out they sold it to someone else after I called when it didnt show up.
Glad my experience with them went smooth. Took a while to get the title but they just kept the temporary ones coming for a few months. Definitely overpaid but I had to buy right in the middle of the chip shortage. CarMax was even more expensive 🙄.
I own a dealership in New Jersey. I see so many of their vehicles listed in the auctions.
Carvana just offered me the most money for my truck. Literally drove there. 10 min inspection, write me a check and I was on my way. So easy. I would sell but not buy.
@8:23 u said that the profit margin per car is 61%, which is very very unlikely. The articel said it rose by 61%, not up to 61%, which means it increased 61% from whatever value it was the year before. So if the profit margin in 2022 was 10% (as an example), in 2023 it would have been 16,1%, if it would have risen bei 61%
Bought my 2014 fusion in 2020 and it ended up getting totaled in 2023. I had it refinanced a few months after I bought it and I found out that Carvana never gave the title to the new lender. Took me a month to sort it out and even longer to get my insurance payout because of it.
hey hari nice adding ur face in the video but not for too long still keeping it interactive with illustrations ur one of my fav channels on yt
Really appreciate the positive feedback man!
When I bought my Audi q7 back in 2018 I had to return 2 of them because of interior damages they have horrible quality control
Oof, sorry to hear that man
@@LogicallyAnsweredwell I now know not to use them😂
Great video as always
Thank you as always Balpreet!
Never had to haggle with a used car salesman, but I do know it's important to test drive a used car before buying it, so "buy without trying" just screamed trouble.
Every aspect of this company failed the smell test, as far as I was concerned, but that's arguably the worst part! Why would anybody pay for a car they haven't so much as sat inside yet? That is pure insanity. You've got to kick the tires and slam the doors at least! Never in my life would I buy something like a car completely online, it blows my mind that this is considered a major selling point.
I sold a car in 2021 to them. They paid 30% more than any other dealer and 15% over private party. The 20 year old employee spent literally 3 minutes looking at my car and then handed me a check. There could have been major issues with it that they wouldnt even have noticed. I imagine a lot of people took advantage of them. It almost seemed to good to be true. I have no idea how they could have made money on my car.
I bought through them at lower market price for my car about four months ago. Overall, good experience. They were just maybe a day or two late on the registration and plates but other than that, nothing bad. The car was bought from a dealer and had an excellent service history. Considering they were also selling the car for 4k less than market I just hopped on it.
You have to do a video on TSmC and NVIDIA. TSMC is now making AI chips for NVIDIA and look at TSMC revenue is 5x of NVIDIA, yet the stock is lower.
You'd hope a company that couldn't stop themselves from selling stolen rental cars would go out of business
A child would agree that a Car vending machine is an Incredibly STUPID idea.
Not really. VW has used one for decades. It depends on density. Do you think parking garages are stupid?
It’s quite a cool idea though haha
@@LogicallyAnswered it would be if it was done properly, which will not happen.
I can't even fathom how much those goofy things costs. Although, at least for the Atlanta location, it allows them to have a pretty small footprint which probably saves quite a bit.
It’s a shame Carvana has gone downhill so far. I bought a car from them in 2019. The price was good for the car I bought and it was so easy and convenient. I also had a lot of cars to choose from. It worked out well, so it’s sad to see they couldn’t make this business really work.
Same, I had a great experience in 21 buying a car from them, no complaints
This explains why they never registered my car
A total disaster of a company. Delayed my car 5 times over the course of almost 2 months. Cancelled and went to car max instead: stay away from caravana. They’re snake oil salesmen with a public stock
Oof, sorry to hear that man
So you chose CarMax? Wow I guess someone has to be buying from them. Yikes
@@jerbear7952Process went smoothly. The car physically existed and I was assured a delivery time. I got to test drive the car, and I’ve had zero mechanical issues. Would recommend again
2:21 Love the animation
🙏
in Aug. 2021 it was a 375.00 dollar stock, but it has been rallying pretty good the last few years. it's now at 75 bucks.
That car with the words underneath was sick
I got a car from them and didn’t notice they didn’t include tire pressure caps until later
TBH, I've been waiting on Washington D.C.'s alphabet soup of DOJ, SEC, FBI, IRS, FTC to investigate García II, García III, García III's frat bro General Counsel of Carvana, Drive Time & its subsidiary subprime banks & warranty company, as well as Carvana & their holding of the wholesale auto auction house Adesa. All of these are ridiculously shady AF. Thank you, Hari for speaking to this as the García's have burned so many innocent people.
It's weird how I've never seen an ad for Carvana, yet they're "burning advertising money"😅
😂 guess you’re not part of the target market
@LogicallyAnswered Well, I'd say obviously and agree with you, but I have actually been watching the market for the past few years and figure it would/should have affected my algorithms somehow. Especially considering I've been personally called by other online car sales companies. Nor have there been any ads on regular layman's television.
Seems like we've just confirmed one of their problems🤷🏻♂️
Never knew what they were. Saw the weird sled looking trucks all over the place. And the fact that they had custom license plates with their logo on them
I didn't even know that they went out of business
Carvana only posted a profit because of renegotiated debt payments, not because of better business practices.
If I'm spending more than 2k on a product I want to see it in person first. I think a lot of people feel the same way about cars. Other than real estate a car is one of the biggest purchases the average person will make, and buying unseen is plain stupid.
Great, video on great reasons. On why, Carvana is going down hill.
🙏
I didn’t know it was banned in Illinois. Guess that’s why I stopped getting ads
Technically it was a profit last quarter, but not really.
They refinanced a loan with a lower loan with the cars as collateral meaning that the reduced loan amount could be seen as profit.
I've debated on useing them but I've heard horror stories of people being falsely accused of theft and arrested when they buy from them
Just run the vin.. most people have good experiences, just don’t use their financing if you don’t have to, you’ll get a better interest rate with outside financing
The title issue was the most infuriating thing to go through. Instead of abiding by the state law they launched a petition for their customers to ask ALL the states to just ignore the rules that they were blatantly ignoring.
U know it ain’t going to last when there no Sellman when it come to cars industry 😊
Carvana could had been awesome if they had actual integrity. I've considered them because I really hate dealerships. Oh well
The other side of the coin with markups is that Carvana likely got sweetheart deals from people looking to offload their cars with as little effort as possible.
Ah yep, I’m sure that’s the case
They’re a bunch of crooks. They’ve had like 8 attorneys general go after them
I've bought 2 cars from Carvana and had a good experience both times
Glad to hear that :)
There is a zero percent chance I'll ever buy a car sight unseen. That's just crazy.
Didn't they do some kind of debt reconfigure loan that has balloon interest payments due in 2030 or something like that? Seems they are still doomed to fail, just extending the fall.
Very possible, but they are profitable rn. I guess we’ll see how long that holds up.
@@LogicallyAnswered I wonder if the profit is actual cash or an accounting gimmick.
I bought a car from them in 2019 before covid. Didnt have any problems with it, only thing i didnt like was the high payment and high price. Other than that it was a vey easy process and good car. Guess i got lucky huh...
I've sold countless cars to them. They definitely pay top dollar. Idk about buying anything though lol
I'm surprised they're still kicking after all this time.
Excelent, tx.
Carvana was only popular when interest rates were at rock bottom. Once rates went up, interest for their cars fell off a cliff. Their cars are a ripoff, you are sooo much better off buying from a locally owned dealership or a private owner even
i hope carvana goes under and has to sell their cars at dirt cheap prices, theyre the reason cars are so expensive
This explains why I just got out of prison for car theft
Their slogan shudda been "Buy a used car sight unseen".
Yeah, they might just as well restate this miraculous quater report in a couple of years...or quarters.
To many cars got stuck in the vending machine
Personally I've never had any issues with them no bad cars no problems. My only issue was the loan company that comes bundled Bridgecrest. This company is the main issue they are the ones that generate the interest rates carvana has to raise the price to compensate. Then the load is crazy aggressive. They will call you they day your bill is due and tell you you payment is late and would be trying to repossess almost same day.
2:45 Being mayor of Gallup New Mexico isn't much of a brag. Even been there? It's among the most dangerous cities in America.
I've seen a few delivery trucks more than normal c
Not only that but When people buy a car from Carvana it doesn’t come In the condition it was brought in. I have heard that many people are filing lawsuits against Carvana over that issue. I would never ever buy a car from them never. You can’t trust what they sell.
I like the subtitles!
3 months later, stock has peaked
Thanks. Time to short their stock
70 billions dollars 😮😮 really that how much it was worth
Crazy right?
@@LogicallyAnswered Yea
Well Carvana has it's competitors even car dealerships giving them a run for it's money.
it took them over a year to get me my registration. I paid for the car in full on the day of purchase. they said it would be in my hands within a short time frame. they never owned the car before selling it to me. they then claimed to have lost the title and had to request a new one which they couldn't do from not owning it. they had to work with the previous owner. my temporary registration expired and i could not legally drive the car i paid for, for about 4 months. they did not want to exchange it for a similar model/same year/ comparable etc. they wanted to come take the car and give me money towards a new one, but being that covid had caused used car prices to skyrocket, i wouldn't be able to purchase another car in full without paying almost 10k more than what i paid for my vehicle. They were unwilling to simply swap with any of the other exact make/model/years they were selling and grew frustrated with me when i refused the refund. I wanted my car and the title as agreed, not be forced to spend substantially more than i already had just because some idiot forgot to get the previous owners signature before putting the car up for sale.
This business relies on your customers being complete idiots. Certainly explains why it did so well for a while.
😂
I wouldn't even by a Matchbox car from Carvana
The Americans discovered you can sell cars. WOW
Hahaha
I've heard too many bad things about them.
What did you expect if your cars are overpriced and non-negotiable.
This aged terribly as the stock is rising fast right now…
Can you do vroom next
Thanks for the suggestion man
If ever there was a used car salesman. Never using carvana.
Eventually Carvana won't hold its reputation long term. They almost got bankrupted but managed to bounce back for doing cost-cutting layoffs and branching to idk where in Asia(I called one of their customer service and one of them confirmed they're in asia). I wouldn't be surprised if the asian people got laid off when Carvana just used them as leverage to keep the business but still with the same service 3 yeras ago
They want to sell cars 2 -5 k over market with higher mileage than Normal and want 4-5 k cash down. Yet somehow people cars from them still
So how can they be profitable now if the fundamentals are shaky?
Technically it was a profit last quarter, but not really.
They refinanced a loan with a lower loan with the cars as collateral meaning that the reduced loan amount could be seen as profit.
Pretty sure the founder was in trouble in the past for scamming with his previous used car lot name.
“Massive stimulus checks”
$2000 isn’t massive 😅
Dude…
His dad was mayor of a town of then less than 20,000 and owned a liquor store. That’s not a hot bed of powerful friends…
Hahaha true
The idea of Carvana was ALWAYS weird, I'd need to drive a car before I just get it. Then delivering it was cool in theory
You get a 7 day completely no questions asked return policy instead of a test drive, so its a actually better then most dealers.
I realize You Tube is mad at her- and many channels are "coincidentally" making $BANK$ off of the controversy- but yah it was herself, Illluminaughti who did an expose on Carvana a year or so ago. And I appreciate this update.
Wife and I got contacted to sell our equinox back to carvana we purchased a year ago. We did. Seamless very nice employees came. But with the dell, had I walked inside the house the. Carvana would have taken the wrong car from our driveway. lol I had an old Tahoe sitting beside the equinox. Honest mistake but I’ve always wondered just what could have happened lol
I was wondering how much caravana would offer for my 2010 nissan Xterra with 115000 miles. They offered me 750 dollars what a joke 😂 I sold it for 10000 in like one week.
Real