Carvana bought my seven-year-old car for more than I paid brand-new(theverge.com)
theverge.com
Carvana bought my seven-year-old car for more than I paid brand-new
https://www.theverge.com/22923871/carvana-pandemic-used-car-prices-sold-online-chip-shortage
10 comments
>There are tons of 2014 Fits listed at $10-14K all over the place.
Pretty much mileage dependent and he did say his 2015 Sport was a rare manual transmission. Autotrader is showing zero 2015 Honda Fit Sport models in the US.
Here is a 2010 listed at Autotrader for 19,250...
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtm...
The MSRP for a 2010 Fit Sport was around 17,000. The used car market is inexplicable.
Pretty much mileage dependent and he did say his 2015 Sport was a rare manual transmission. Autotrader is showing zero 2015 Honda Fit Sport models in the US.
Here is a 2010 listed at Autotrader for 19,250...
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtm...
The MSRP for a 2010 Fit Sport was around 17,000. The used car market is inexplicable.
I am in the market for a new or used car, and I can confirm that it is absolute bonkers right now. New cars are 10-20% over MSRP and 30-90 days lead time, and some dealers are further price gouging by making buyers purchase a 'bundle' of accessories to have the privilege of buying a car at a markup. Used cars are absolutely going for more than a comparable new car, and I've considered it because the used car at least exists and is something I could drive home the same day. Worst part is the only reason I'm in the car market is that my actual vehicle that I own is in the shop after a minor collision waiting for parts since the beginning of October. All around the car market is terrible. For the time being I'm renting a car on a monthly basis, as it seems to be the least bad solution, and it's fairly bad.
> making buyers purchase a 'bundle' of accessories
When I was looking for a new car a few months ago, one dealer had a $2000 "low inventory markup fee". I asked what that meant and he said, "since we don't have very many cars coming in, we're marking up the ones we have".
When I was looking for a new car a few months ago, one dealer had a $2000 "low inventory markup fee". I asked what that meant and he said, "since we don't have very many cars coming in, we're marking up the ones we have".
To be fair, the majority of fees can be explained with a simple shrug and "supply and demand".
Sounds like Carvana might end up as the next Zillow Offers, but in the meantime I believe it…
I bought a pickup truck new just before the pandemic, and dealers are selling my model and year of the truck, with more miles, for $10-20k more than I originally bought it for.
I’d consider selling, but what would I replace it with?
New cars are just as expensive, hard to get ahold of, and on top of that have all kinds of corners cut because of the chip shortage…
I bought a pickup truck new just before the pandemic, and dealers are selling my model and year of the truck, with more miles, for $10-20k more than I originally bought it for.
I’d consider selling, but what would I replace it with?
New cars are just as expensive, hard to get ahold of, and on top of that have all kinds of corners cut because of the chip shortage…
Do you need a newish truck? In your situation I'd be inclined to spend $2000 buying and fixing up something that barely runs and selling the current vehicle. In two years you should be able to buy a new vehicle again at normal rates and get rid of the junker. Worst case for that would be something like donating it for a tax write off. In the end you should still come out ahead with extra cash and a slightly newer new vehicle.
That’s fair, and definitely something I’ve done in the past.. the tradeoff is whether the time and money spent wrenching on the old vehicle comes out ahead. I’d have to think about that carefully.
In my (and sounds like your) case the real benefit is that cars aren't depreciating. I bought a new truck in 2019 that is now somehow worth $4k more than I paid for it. To buy a brand new, 2022 version, would cost me about $2-3k out of pocket before taxes and fees. That's completely unheard of in my lifetime. Sure you don't -need- an upgrade, but just extending the warranty out that long is almost worth it.
If I weren't in a homebuying process at the moment, I'd have jumped all over it.
If I weren't in a homebuying process at the moment, I'd have jumped all over it.
From a real value standpoint the cars have to be depreciating. You’re presumably putting miles and real wear and tear on the vehicle. There’s a perfect trifecta of reduced supply, increased demand, and inflation.
I’m not sure it’s worth it to upgrade in all cases; the corners cut on the newer vehicles might mean that the newer vehicle is of a poorer build quality than your existing one.
I’m not sure it’s worth it to upgrade in all cases; the corners cut on the newer vehicles might mean that the newer vehicle is of a poorer build quality than your existing one.
What corners are they cutting? I’ve been looking at new cars and they have reduced options. In some case they even give money off the price since the features are lacking.
Reduced features, cheaper components, etc.
GM trucks are leaving out fuel management modules (reduced gas mileage): https://www.theverge.com/2021/3/15/22331766/gm-pickups-semic...
Tesla removed a backup steering motor: https://www.cnbc.com/2022/02/07/tesla-cut-a-steering-compone...
BMW pulled touch screens from their cars: https://www.theverge.com/2021/11/5/22765709/bmw-chip-shortag...
GM leaving out wireless charging: https://www.theverge.com/2021/7/13/22575836/gm-wireless-char...
I’m sure there are more and these are just the ones making the news. All things being equal I wouldn’t expect a 2022 car to be as good as a 2020 car.
GM trucks are leaving out fuel management modules (reduced gas mileage): https://www.theverge.com/2021/3/15/22331766/gm-pickups-semic...
Tesla removed a backup steering motor: https://www.cnbc.com/2022/02/07/tesla-cut-a-steering-compone...
BMW pulled touch screens from their cars: https://www.theverge.com/2021/11/5/22765709/bmw-chip-shortag...
GM leaving out wireless charging: https://www.theverge.com/2021/7/13/22575836/gm-wireless-char...
I’m sure there are more and these are just the ones making the news. All things being equal I wouldn’t expect a 2022 car to be as good as a 2020 car.
> real value standpoint
What does this even mean, if you ignore low supply and high demand?
What does this even mean, if you ignore low supply and high demand?
In the long run wear and tear on the vehicle will eventually render it unusable.
Unless you’re parking it in a climate controlled garage you’re contributing towards that wear and tear, using up a fraction of it’s lifetime utility, and thus reducing it’s real value.
Unless you’re parking it in a climate controlled garage you’re contributing towards that wear and tear, using up a fraction of it’s lifetime utility, and thus reducing it’s real value.
He did not say in the article how many miles the car had on it or how much sales tax he paid.
Carvana is selling a 2015 Fit, 10000 miles, for $21,990
https://www.carvana.com/vehicle/2189442?utm_source=vdp-socia...
I see a 2012 Fit going for $19900...
https://www.carvana.com/vehicle/2177428?utm_source=vdp-socia...
I am sure Carvana is looking to get a piece of the financing from buyers too.
Carvana is selling a 2015 Fit, 10000 miles, for $21,990
https://www.carvana.com/vehicle/2189442?utm_source=vdp-socia...
I see a 2012 Fit going for $19900...
https://www.carvana.com/vehicle/2177428?utm_source=vdp-socia...
I am sure Carvana is looking to get a piece of the financing from buyers too.
Eh this reads as a sponsored content piece for Carvana. On the other hand, here’s a more interesting take on the “ponzi” model behind this co: https://seekingalpha.com/instablog/767332-clastic/5659699-ca...
I don't think it comes off as a sponsored article at all though. In fact, it's very skeptical of Carvana's business model and pricing algorithm throughout the article.
At the heart of every scam is an offer you cant believe to be real. You clearly see how stupid other party is and how your own cleverness will make you some serious $$$.
"look at those idiots overpaying for used cars" is a perfect advertisement for a scam.
"look at those idiots overpaying for used cars" is a perfect advertisement for a scam.
Carvana is owned by Drivetime,
They make money because they supply the note when it's sold.
Markup to 23k, APR at 23% or whatever is the legal limit.
Their main target audience is subprime lenders. Cars depreciate normally, and this can be another bubble that will burst in the next 2-4 years that may or may not drive electric car adaption.
They make money because they supply the note when it's sold.
Markup to 23k, APR at 23% or whatever is the legal limit.
Their main target audience is subprime lenders. Cars depreciate normally, and this can be another bubble that will burst in the next 2-4 years that may or may not drive electric car adaption.
That's great insight. Do they hold the notes or package and sell them off? Would be interesting to follow the money and short the ultimate debt holders if the market appears to be bubble prone within the timeframe you stated.
> Carvana is owned by Drivetime
Can you find a citation for this? Looks like an independent company now. https://www.nyse.com/quote/XNYS:CVNA
Can you find a citation for this? Looks like an independent company now. https://www.nyse.com/quote/XNYS:CVNA
Exactly. TFA is just "wow I can't believe BHPH dealers will buy X for Y" but with higher numbers and higher class.
The best part is that the latest gen of the vehicle in the article, Honda Fit, is not even sold in North America. Due to lack of demand, presumably[0].
Guess this means I'm driving my 2nd gen 2010 Fit until the country runs out of replacement parts, because there isn't a subcompact out there with a comparable cargo space configuration.
And in the Bay Area, each time I'm driving somewhere I see a Fit or two - which people aren't selling, looking at Craigslist. Older Fits with 2x mileage sell for 2x what I got mine for ($4500 in 2017).
I contacted Honda at their email customer service[1] line, and got this response:
>Thank you for contacting American Honda regarding your sales experience . We want to thank you for providing us the opportunity to respond to your message. On behalf of American Honda Motor Co., Inc., we apologize for the circumstances which prompted you to contact us. American Honda documents and uses feedback in developing training for dealership management. We want to ensure that all customers have a smooth and stress-free sales experience. As such, we have documented a formal dealership complaint on your behalf.
As generic as this is, some extra nagging from all the Fitniks out there certainly wouldn't hurt. Though most likely, they won't care unless it's a Tweet[3].
[0] https://www.caranddriver.com/news/a33337398/honda-fit-discon...
[1] https://crrs.secure.force.com/service/hondaownerw2c
[2] https://sfbay.craigslist.org/search/cta?query=honda+fit&min_...
[3] https://twitter.com/the_roman_kogan/status/14918465253490278...
Guess this means I'm driving my 2nd gen 2010 Fit until the country runs out of replacement parts, because there isn't a subcompact out there with a comparable cargo space configuration.
And in the Bay Area, each time I'm driving somewhere I see a Fit or two - which people aren't selling, looking at Craigslist. Older Fits with 2x mileage sell for 2x what I got mine for ($4500 in 2017).
I contacted Honda at their email customer service[1] line, and got this response:
>Thank you for contacting American Honda regarding your sales experience . We want to thank you for providing us the opportunity to respond to your message. On behalf of American Honda Motor Co., Inc., we apologize for the circumstances which prompted you to contact us. American Honda documents and uses feedback in developing training for dealership management. We want to ensure that all customers have a smooth and stress-free sales experience. As such, we have documented a formal dealership complaint on your behalf.
As generic as this is, some extra nagging from all the Fitniks out there certainly wouldn't hurt. Though most likely, they won't care unless it's a Tweet[3].
[0] https://www.caranddriver.com/news/a33337398/honda-fit-discon...
[1] https://crrs.secure.force.com/service/hondaownerw2c
[2] https://sfbay.craigslist.org/search/cta?query=honda+fit&min_...
[3] https://twitter.com/the_roman_kogan/status/14918465253490278...
My dealer is offering me 5k over what I bought my '19 Fit EX for and that's with a pending 1.8k repair (infotainment screen is broken). Anything with adaptive cruise and lane keep has had its price sky rocket.
I'm not selling as the only thing comparable size wise would be a Focus or Fiesta but those are in crazy demand too due to being discontinued. It sucks for long car rides (stiff as hell suspension) but it's so much fun to drive.
I'm not selling as the only thing comparable size wise would be a Focus or Fiesta but those are in crazy demand too due to being discontinued. It sucks for long car rides (stiff as hell suspension) but it's so much fun to drive.
I sold a vehicle to CarMax a few months ago for 8% over what I paid for it six months prior.
It took them two months and selling it for less than I paid to get it off the lot.
Same thing happened about 4 years ago though; they bought a car for what I paid for it and took a pretty solid loss.
In both cases they overvalued on a rare color that I liked but the market did not.
It took them two months and selling it for less than I paid to get it off the lot.
Same thing happened about 4 years ago though; they bought a car for what I paid for it and took a pretty solid loss.
In both cases they overvalued on a rare color that I liked but the market did not.
Do they have policy against you buying your own car again? It would be funny to sell it to them and then buy it for cheaper earning money this way.
I’m selling my car to Carvana in a couple of days. They’re giving me $1700 less than I paid them for the same car 4 years ago. Pretty nuts, but I’m not complaining.
Carvana is great. I always sell to Carvana and buy from CarMax.
a what now? you bought it you deal with it
>Last Friday, I got Carvana’s final answer. The short version? It’s not a bug — at that moment in time, Carvana’s algorithm believed it could pay me that much and still make a profit.
algorithms dont have a belief system, they have bugs. There are tons of 2014 Fits listed at $10-14K all over the place.
It sounds to me like I could flood car marketplaces (optimally ones carvana uses) with grossly inflated sale offers for my particular make/model/year and then sell it to Carvana at hilarious margin.
>Carvana’s executives think of it like a portfolio — there’ll be winners and losers
they might be losing money on every single unit sold, but they make it up in volume! It used to be just a joke, but in todays economy merely having big turnover on paper suddenly produces $Billion$ valuations despite no profit.
Oh look what we have here https://seekingalpha.com/instablog/767332-clastic/5659699-ca...
"with the exception of Q2'21, Carvana has lost money on each and every used car they have ever sold"