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Originally Posted by Redfoot
Not in the business at all, but been intersting to watch the last few years.
How has Carvana impacted your business? Curious to hear from an insider.
The Carvana recently opened in Michigan had their license pulled for some regulatory infractions- not sure if they resolved them or not, but I am sure the local car dealers made sure the city governments are all getting nice deals on their cars for the next few years.....
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If anything Carvana has made the regular customer more dealer savoy and for me that's a plus. Now more then ever before people check the carvana offer and use that as a bench mark as value. I'm always happy to explore any vehicle someone is looking to sell outright, its possibly the best way to acquire vehicles.
Carvana has been a fascinating thing to watch over the years. Early on back in 2018 the writing on the wall was pretty obvious to anyone in the business, overpaying for most inventory, terrible customer service, and worst of all a massive cash burn. I was actually so confident that they would fail I personally entered a short position which I can say my ass was handed to me (bad timing looking at the stock now)
. Thinking back yes that was stupid but hey at least I'm fortunate enough to laugh about it now.
They most likely had their license in Michigan pulled for not producing titles which seems to be the common issue across the country with them. There bread and butter is selling high interest loans to first time customers that really don't know any better or cant get approved anywhere else. Carvana has never made a profit and I suspect there best days are behind them now. I think one of the major things that hurt their business was not being able to purchase any off lease vehicles in the height of the market. A lot of manufactures stopped third party buyouts when these lease had a ton of equity in them, it could have been tremendous for carvana. Honestly at the end of the day I'm envious of what they did, took a basic idea, sold it to investors, and cashed out at the top for billions....
Heres some history on the founder
https://en.wikipedia.org/wiki/Ernest_Garcia_II