The Decline of Carvana...What Happened?
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- Опубликовано: 31 июл 2024
- Less than two years ago, Carvana was a rapidly emerging, successful company. Today, many believe they may be on the verge of bankruptcy. This video talks about what has been happening.
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You really shouldn't have glossed over the lawsuits in Michigan and Illinois. They are much bigger issues than you think. Not only they are breaking laws, they will almost never give you the title. There have been countless examples of people waiting half a year+ to get a title. And the worst part is that they can't even legally drive the car without the title.
Completely agree with this. I have a friend in IL who waited 22 months to get his title from Carvana...22 months with a friggin car he couldn't drive legally. He was not given an explanation nor an apology after finally getting the title.
@@mickey221 I had a friend who was facing a temporary tag expiring as well. She pressured them and they rented her a Jeep from Enterprise for over 3 months. No way they made any money. Very disorganized...
Huge lack of credibility in this episode. The title issue is a big issue. Their legal problems are just beginning. Quantity over quality for this episode.
They also got their license pulled in NC too
Unfortunate- I was looking at trying out Carvana this year or next year for a used car but it seemed too good to be true. The title issue is massive.
I bought a car from them. It was in 2019 and the vehicle was an Infiniti Q50 with less than 2000 miles and zero imperfections. When the car was delivered, there were scratches all over it from transportation and no heated seats (which were listed as equipped). The delivery guy told me I might be able to get a better deal if I took the vehicle and contacted Carvana about the issues. I accepted the vehicle (I had already sold my vehicle this was replacing) and contacted them. For all the scratches and no heated seats, they offered me $100.00 off my purchase. I sent it back collected my money and never even thought of using them again. The crazy part is, all their vehicles have scratches in the same places due to the straps they use in transit. I can pick out their cars in about five seconds.
$100?!?! What a fuckin joke!
The compensation should be price for heated seat upgrade and total cost to remove/repair all scratches from a reputable body shop.
I definitely did not have a problem with scratches on my cars when I got them from Carvana. It may be the Carvana in your area that's not doing something right.
that's nuts brother. I wonder what their BBB score is😂
@@micknightmare3 BBB is a racket. They are a scum of the earth organization.
Haha! Sounded like you got catfished, but with a purchased car!
Two people I know used Carvana and both received a car with no title, no paperwork. One of them could never drive the car because they were never able to register it in their name, nor did they have any paperwork to prove the car was theirs. The other person was able to get their hands on the paperwork for their new car 1.5 YEARS later. Also, those lawsuits in Michigan & Illinois are the reason I realized how shady this company was. We really shouldn't overlook those. Without those lawsuits, they most likely wouldn't be suffering THIS much when it comes to income and sales.
I guess the apple doesn't fall far from the tree.
I sold a car to them at the tail end of the pandemic. It was an amazingly simple process. But, what really shocked me is that that they bought my car at a very good price (for me). I got the Kelly Blue Book price for a 6 year old car that had it's fair share of dings and dents. Typically, if you're selling something, say, at a pawn shop... you'll get a ridiculously lowball offer-- often half it's market value. But, Carvana bought my car at a primum... and the deal was done in 8 minutes over the internet without a human being inspecting it. I remember at the time thinking, "this is too good to be true." Turns out, it was-- for them.
Had a very similar experience selling my car to them, got an amazing price for it. Then things started falling apart for them about a month later. I got really lucky, which is rare for me.
Curious to know what kind of car 😂😂😂 it had to be nice
The good deal for you was most likely due to the used car shortage. Supply for used cars were low... and demand was high, so used car values were high.
I had a terrible experience with them. They offered me $150 for a Toyota 4Runner with 290k miles because of “unusually high mileage”. The vehicle was a Limited trim, year 2006. They were extremely rude.
@@void5239that is a lot of miles though
Used to work for Carvana, was a delivery driver that would deliver cars to people's homes. While there are plenty of upsides to the process, there are a load of issues.
The cars are supposed to go through a 150 point inspection, but the inspection crew went from, say, 30 people with 20 minutes each to go over specific areas to less than 15 people with only 10 minutes per person to check various parts of a vehicle. It actually got to a point - because of the high demands - they'd check to see if the car turned on and if so, just passed it through unless there was major cosmetic issues.
Logistics were a nightmare. The cars are stored at inspection centers and only sent to the vending machines when their delivery dates were to approach. More often than not, a semidriver wouldn't receive the car needed so therefore we advocates would have to call the customers on delivery day to inform them we wouldn't be able to deliver their vehicle - we wouldn't find out until the day of.
Communication between "store level" and higher ups was nonexistent until things fuck up. The higher ups would ride on our supervisors' asses and pressured to "just get the cars delivered." Basically, any issues - unless it was a major safety issue - were attempted to be hidden or just encouraged to do an "after sale repair." Which sounds cool, except the partners with Cavana (whos name I cannot remember right now) were always rude and unless they were simple issues like dents would turn customers away.
If a customer traded in their car as part of the car buying process, they had 7 days to change their minds. Sometimes, instead of getting their car back, they do a swap for a different car. EACH customer only gets THREE swaps. With each new car, they'd get 7 days to test it out. However, if by the third car doesn't turn out right and they want their original car back - chances are VERY likely that the traded car is already in an inspection center getting worked on - because they only keep that car for 7 days, whether or not the customer swaps for a different vehicle.
Then there's the licensing issues. Working in Indiana, we were often used to deliver to the eastern edges of Illinois. When their license to sell in Illinois was lost, they "worked around it" by sending us there - then we were told we couldn't sell IN Illinois, so they made the Illinois residents come to Indiana. Then it turns out, we couldn't do that cause they couldn't legally deal with any registration with Illinois.
They'd force drivers to work 10-12 hour shifts without breaks or lunches meanwhile trying to do as many deliveries as possible during the shift. We've had drivers pass out from exhaustion (luckily he was still at the shop and not in the truck) and told to just "take a 15 then try to get the next one done."
During our busy period, we were all working 6 10-12 hour (if not more) days a week, the only reason we didn't work Sundays is because it's illegal to sell cars in Indiana.
Then while working these crazy hours, they laid off a BUNCH of people - no warning at all until the day of. Then because we lacked help, the hours continued. Then it went down to the more reasonable 40 or so a week. Then 36... then 32.. then 28.. then I quit at that point. Because despite being given only 28 hours that week, to "make up my time," they gave me a schedule that had me going from 7am to 10pm... when our specific lot closes and sets up security (our location didn't have a vending machine at this point, so we operated out of an Adesa lot) at about 8-9 or so.
So... yeah, Carvana deserves their failure.
Interesting read to say the least. So what would happen to those people who would do a trade in and then swap their purchase multiple times, was it a hassle to get their original car back at that point?
@@Cornelius87 in this scenario, there was never a non-issue. Sometimes it'd take the threat of a lawsuit to get the ball rolling on getting them their original cars back. Depending on how much time has passed, it could be in different stages of inspection - including potential repairs. I've seen cases of people waiting months to get their car back.
I used to work at carvana on the customer service side and everything this man said is true lol. I think the partner your referring to is silver rock
i've heard from many truckers that carvana was a nightmare to work for, but never heard any details. thanks for putting that out there.
@@markt9608 SILVER ROCK! Omg.. yeah fuck those guys. Rude as hell.
In the Summer of 2021 I sold a car to Carvana. It was the easiest experience ever. Like...they didn't even care what condition it was in. They offered me more than I had paid for it the previous summer. Their driver shows up, sign over the title, take the check, and never heard from them again. If they're so not picky about their inventory...it's no wonder they're having a hard time. I feel like these "disruption model" businesses are so irresponsible. They burn through cash like there's no tomorrow...and for some of them, literally there is no tomorrow. It's sick.
Carvana was great as a seller, terrible as a buyer.
The Silicon Valley tech bro motto 'Move fast and break things' is the stupidest most irresponsible mindset for business I have heard and don't know why it is still pervasive.
Lmao weird, makes me think carvana maybe looking into all that separately through service reports and whatever and just not trusting the buyer at all. That was also right during the huge car boom which I’m sure was a major factor. Used cars had just skyrocketed and they wanted EVERYTHING. But there’s gotta be no shot they wouldn’t at least separately research the cars they’re buying right?
The problem is the way our laws are written. The people in the "C" suite are not held personally responsible for their idiocy. The company folds and they get their golden parachute and walk away with millions. The laws need to be changed such that they are held criminally responsible with the threat of massive personal fines forfeiture of personal assets or jail time. I bet you would see much more responsible actions by CEO's if they had real skin in the game.
@@MMMMatt Because, with any luck, you can cash out for billions before everything goes wrong.
One other major factor you didn't mention is that Carvana is in major legal trouble with multiple states for taking far, far too long to get people their registrations, in many cases sending multiple temporary tags instead of properly handling their role in registering cars they've sold. They've done a lot of damage to consumer trust.
You forgot #4: Taking as many as 15 months to deliver registrations: Its like in all the news reports. How could you not mention this?
You buy a car from them and you have like a 75% chance of NEVER getting your Title. I had 4 Coworkers in 2021 that all had the same thing happen to them.
Yep. Go to the Carvana subreddit and every other thread is about it this. Hundreds of them.
Imagine paying to commit grand theft auto
That is conversion... do you not have strong tort laws?
Had that happen at a regular dealership. Took me 6 months to get it sorted.
I've heard that as well
I believe you may have grossly understated the extent of their legal troubles. They have a terrible BBB rating, have had their license to sell pulled from several states and have multiple class action lawsuits against them for fraud and not giving people the titles to the vehicles they purchased. Even issuing license plates from multiple states to a car owner to cover the lengthy and sometimes indefinite delay in receiving titles and tags.
The bbb is in no way connected to the legal system or government, lol
@bmhyakiri never said it was. But due to all the legal troubles their ratings are deplorable.
@@bmhyakiri Riiiight, and thus the Better Business Bureau is absolutely inconsequential in the discussion of business quality? Lmao ok
@@5h4d0w5l1f3 the preceding statement is specifically referencing legal troubles and I said it's not affiliated with the government. I said nothing about any effects the BBB has on businesses or their perceptions.
@@bmhyakiri a lot of the BBB ratings left for carvana involve the legal issues, the comment wasn't implying the BBB itself is a government/legal body
Company man, I did buy a car from them. A 2019 Challenger r/t. Had a good experience at 1st. Was easy, stress free and overall quick. Problems started once I got pulled over and the car was reported stolen out of CA. My car was impounded and I had to go through 2 months of court to prove I paid and bought my car from Carvana. To make a long story short, the car had taxes still owed out of CA and whoever owed the car before me reported it stolen. My lawyer told me that for whatever reason Carvana had very similar situations going on all over the country. At that point we were just trying to get our money back and Carvana wouldn't respond to emails or calls until the court reached out. Thank God after months I we were reimbursed. I'll never go that route again. Yes dealerships are long stressful and annoying but I would much rather deal with that over buying a car that was never legally purchased in the 1st place... Also great channel bro. Keep up the great work! 👍
As someone who worked for them during the decline and 2500 employee layoffs, it was not just the lawsuits in the two states. Losing their dealers license in 2 other states, titles being behind up to 3 years (a situation I had dealt with), not to mention the countless warranty claims that were denied even if it was a serious safety issue. Also don't think the 2500 employee layoff (which was caused by the Adesa aquirement) was the end of it. After the layoff, the frontline employees were fired for being as little as 17 seconds late from breaks, or for no reason at all (I left before I would of likely been fired after being written up for being late a minute or two late from breaks from over 6 months prior). This company has a lot of problems that I wish they could learn from and fix. It's a good business model but it has been executed poorly. Would be a shame to see it go to waste.
This company was started by a couple of crooks. They have sold cars that were known to have been in accidents and given mediocre repairs. There were also reports of people not getting the cars owed them. I hope they fall hard since this has been long overdue.
The Son “worked his way up the ladder”
😂😂😂😂😂
I died laughing
I thought that was silly too lol
It reminds me of an Onion video titled "CEO Worked Way Up From Son Of CEO"
This is exciting. Your channel just entered a new phase. It used to be the businesses started their decline because of the 2008 financial crash. Now it's going to be because of the pandemic
Have we not learned yet that a company buying A LOT of advertising space/time suddenly is NEVER making any real cash.
Something to keep in mind when framing their legal issues. It is not that their troubles were isolated to a few states, the behavior was everywhere, but only a few state had the laws and desire to address them.
I have never in my life had so much trouble spending money. Carvana can kick rocks.
Soon the CEO will be jumping off one of the vending machines
Rigby
I absolutely agree I tried 3 separate times to buy vehicles from them. I finally got a deliver time and date. I got all the way to the site only to be told with 15 minutes notice that I wouldn’t get my car that day. I canceled the order and went to a dealership instead.
@@joshuarebelak416 lmao yup. I think they were showing cars that were never actually available for sale. Total scam.
@@joshuarebelak416 happened to me too. I ordered a car and like 15 minutes before they call me sayinf the car had "mechanical issues". I ended up canceling and going to CarMax.
Sometimes in business, events (such as the pandemic) occur unpredictably and greatly affect the demand of a product. A company will want to match their supply to that sudden spike in demand because that means a lot of money for them. However because of the unpredictable nature of this spike, it is difficult for companies to do this and they very often have a lot of leftover inventory. Remember how after the pandemic died down and suddenly everybody had pallets of hand sanitizer selling for pennies? Sounds like Carvana overshot their supply as well.
This is wonderful!!! I’m so sick of those stupid focus group ads they run all the freaking time. They will not be missed!
I used to work auto loans at a credit union. My experience with Carvana was mostly negative from the behind-the-scenes perspective. They were a very difficult company for lenders to work with. I could never get the same rep twice, and getting the paperwork that I needed from them was like pulling teeth.
I bought a car from Carvana around 2021 and 8 days later the front left tire literally fell off. They obviously had serviced it and someone forgot to tighten the bolts. They fixed the mechanical damage but refused to fix the body damage. It was relatively minor so I went on with my life.
But then I had some extra cash and decided to pay out the remainder of the loan early, and it took them a full year for me to get a clean title. I kept calling them and they said they had sent it out and I should be receiving it soon, but I was only able to get it once they send a lien release letter that I had to take down to the dmv myself to get the title cleared. Never using Carvana again.
a year is fucked
Dont take put a loan for a car lol
@@TheRealSlimShady509 why not? If I can use the money that's not tied up to a depreciating asset (a car) on investments that yield higher returns, I would absolutely take out a loan for a car.
Go ask your financial adviser about your statement. Meh, you probably don't have one anyway
Especially given that I have good credit and this was during Covid so the interest rate was practically nothing.
@@Yvaneify if your financial advisor advises acquiring debt be my guest
I was in desperate need of a reliable car, and I looked to Carvana because I thought that a used car would be the way to go. After weeks of research and poking around, I found that it would be substantially cheaper to buy a new car from a dealer, like thousands cheaper. So I was faced with paying a few thousand more for a used car or a few thousand less for a 2023. This was not at all limited to make or model. It seems to be a pretty widespread reality. I can only think that the reason one would go with Carvana is if you couldn't qualify for a loan otherwise. And for that, they definitely have value. But for the average car buyer, I can see no reason to even consider using them. Your video is really insightful. Thank you!
I thought I heard they had problems in Florida as well, and most probably a bunch of other states too. I heard one thing they were inept at, was looking over the paperwork for cars they bought, sometimes never having the title, then reselling the car, and the new owners getting left with a new car without a title that they were unable to register.
It's not just those two states, the local Carvana here where I live in PA had their ability to issue and transfer titles and registrations revoked by the state. There are frequent news stories in the local media featuring tales of people who never got their titles after buying a car from Carvana and thus weren't able to legally drive their car. There's actually a class action against them in the state of PA for the whole title issue.
Apparently North Carolina too
In December 2021 they offered me $19,000 for my 2017 Corolla LE with 45,000 miles on it. If they could offer that much to buy, I can only imagine what they were wanting to sell it for. Basically $4K less than brand new. There’s no way that was sustainable.
I would think not. If you sold that car yourself, you'd probably get $15K, tops, but you don't have to mark it up for a profit cos you're not a business. You don't have a building where you do that, that you have to maintain, full of people you have to pay. And even if you did, you still wouldn't need a fleet of thousands of trucks that you pay people to drive all over the country. So how the hell could they pay $19K for it before they've even touched it, or seen it, and ever expect to make money on it? First off, if it's worth $15K on the normal Guy Sells His Own Car market, they're already eating $4K before the ink in your signature is dry. Then they pay a guy to drive an expensive flat truck to get it, pay more guys to fix anything wrong with it (admittedly, very few things at age 4, but still), pay a guy to stick it in the vending machine (which they pay more guys to maintain), then pay a guy to drive another expensive flat truck to the buyer. They'd probably have to sell that car for $30K just to break even. But as you said, it was only worth $23K new. It doesn't take an economics major to figure out where that's going. Hell, if I bought that car for $19K and sold it an hour later in my driveway, without touching it, I'd still eat it hardcore, and I don't have any employees or flat trucks, and my house is already here, so it's a prepaid expense.
The first time I saw a Carvana ad on TV, I thought two things: 1. Who the hell would buy a used car sight unseen? and 2. There's no way they can compete with normal used car lots that don't have to pay guys to drive those flat trucks around at 2 MPG. No F& way. And here we are...
@@emilyadams3228 I really can't help but wonder what exactly their pitch was for VC funding.
"Hey we've got an idea for a used car lot, but get this... it's all around the country! AND we're tacking on a bunch of unnecessary and expensive overhead costs, and buying cars at face blue book value without even doing any inspections!!!"
Who signed on to that???
@@shabustinkslol I'm guessing the whole thing was intended to be a massive financial failure, by the founders and everyone who put up the money for it. An IRS Chrysler Truck, if you will. You know, a Tax Dodge.
Either that, or a front/money laundering scheme for criminal activities on a scale you dare not imagine, if you enjoy restful sleep.
@@shabustinkslol That's not the market they conceived the business in. Remember this is a story of selling a used car in the upside down economy of the pandemic. Used cars went way UP in value. My 2015 Corolla went from a KBB of $12,000 to $18,000 in 18 months. If I had decided to sell it, I could pay off the loan and have cash left over. The original business model was to purchase lease vehicles that were returned at the end of the contact, and sell them for less overhead than traditional dealers bc they wouldn't have to maintain dozens of large lots to store and service their markets. They could use centralized stations servicing an entire region. The car towers themselves have relatively small foot prints, being mostly vertical. Mot of the issues I've heard they have are about managing a major unpredictable sudden shift in the cost of their product and not managing quality during a rapid expansion. The first thing is nearly impossible for any company to manage successfully. The second thing is a problem most successful businesses face at some point.
traded my 2015 malibu with a questionable transmission, a dented in driver's side quarter panel with rust, and a dented in rear bumper for over 15k??? they paid off the rest of my loan on it and I ended up with a newer vehicle with fewer problems. What?
It’s been a busy week when I’m 5 days late watching Company Man.
I never knew Ugly Duckling was a Phoenix local thing. I remember them re-branding to Drive Time because they had such a bad reputation. You didn't buy something from Ugly Duckling unless you burned all other options. The only thing worse than their predatory loans was the quality of their used vehicles. Your vehicle was guaranteed to hard brake before your 10 year, 30% loan was paid off.
I really hope that one day we can get rid of a law that keeps car dealerships in business and just allow us to order directly from the manufacturer. We already pay for a delivery charge so why not be able to get exactly what you want, delivered to your house.
The AAFES car program is the only way to do that. When the family and I were still in Korea, (when I was still in the Army) we ordered a brand new minivan before we left. We saved thousands of it being shipped for free to Hawaii, our next duty station. We saved some other costs too. However it was nice to just pay for the brand new minivan without the hassel.
The challenge is the OEM :Dealership relationships.
They both need one another. ie Warranty Service Work
As a consumer it makes sense. But within the automotive industry itself ,no dealerships would hurt OEMs overall.
Just what I learned working on both sides in the past🤘🏾
Dealerships lobby the politicians. And the government passes laws to require a dealer's license which prevents regular people from buying cars at auction to "protect the consumer" from shady people who would do illegal things like roll back odometers.
To put it simply, you want to keep automobile dealerships, especially for new cars under warranty. Dealerships that sell new cars are required to service and repair them by the manufacturers. They also have to have all the proper, up to date diagnostic tools and special tools required for repairs; something independent garages likely won’t have. Also, dealership service department technicians undergo several hours of training each year to understand and work on new systems as they come out; also something the local independent won’t have. Dealerships get a bad reputation, again, mostly from bad customer experiences with non-dealership repair facilities. Yes, some are bad but the majority aren’t. Speaking as a service consultant at a Chevy dealership for 30+ years who dealt with a lot of issues customers had from going to a non-dealer garage or tried to fix themselves. That worked in the 70s, even the early 80s, not so well from then on to the present.
You are painfully ignorant about how dealerships work.
The ultimate final boss of car salesman
😂
My sister wanted a C-Max and Carvana seemed to have bought them all up from our area. Every time one was traded it would almost immediately be bought by Carvana before it could even be "reconditioned" by dealers. She bought one with a clear CarFax. When it arrived the entire passenger side had been repainted. She traded it for another one the next week, but it took a month for the insurance and registration to get sorted between the two and another month to get the title and registration. Quite a cluster
I love It. I really just skipped a carvana ad while watching this video.
I am always highly suspect of some company whom you’ve never heard of and suddenly they’re in every TV and internet ad.
I worked for Vroom, Carvana's major competitor in the mid to late 2010's. The titling process per state is pretty varied and a lot of states require manual paperwork for title transfers. This manual process with the state takes a very long time due to out of state transfers, missing titles, inaccurate information, etc. Until the states update this process it won't get any better. This is a huge problem when selling used vehicles. You cannot put a vehicle on your insurance if it doesn't have a license plate, you can't get a license plate without appointing a title (either owning it or who owns it, like a bank). People have bought cars from Vroom and Carvana just to put them in a garage and can't drive them.
You can insure a car without the title. You just need the VIN. You need proof of insurance to register the vehicle
The problem with Carvana was not their difficulty or speed at handling titles, at least not alone. They also got caught selling vehicles they did not have the title in the first place, and rather than try to correct the issue, they would give customers the run around in the hopes they would go away and eat the cost of the car.
@@neeneko The Carvana's that those people were dealing with must be an issue. My sister-in-law was able to return her car within the 7 day return period for a full refund when she changed her mind on the car that she got. There was absolutely no hassle involved and no questions asked.
@The Real Luigi the issue for these customers is that, after the 7 day period, they would still be without proper documentation for the vehicle (title, registration, license plates). Carvana would promise to give the paperwork to the customers, so the customers continue to wait. After the 7 days, the customer can't return the car, and if they never got the title for it, they also can't re-sell the car, meaning they're just stuck with it.
@@ryanparrott6866 I see, in that case it was wrong on Carvana’s part. If they wanted to do the customer right then they should have made an exception. Yeah, I think that I would have got an attorney involved at that point.
Damn... working for a company and then having Company Man make a Decline video on it is such a weird feeling LOL
As someone who works at a dealership, I can tell you with 100% certainty, that most of our vehicles have a $6,000 markup vs what we paid for it.
Hey Company Man. I am a former employee of Carvana and let me tell you, it’s a terrible company. I’d love to tell you about the mistreatment of employees and the lies they tell. They don’t care about the customers and I would never buy a car from them. Worst place I have ever worked for. Let me know if you would like to do some kind of interview or something.
Fake and same-sex
I worked at the Tempe headquarters. I even met the douchbag ceo Ernie.
Ooo tell me!
@@michaelweir995 it’s too much to type out.
Well that was a lame ass let down.
They have been in trouble in NC and FL for titling issues. You totally missed the titling issues. They have had issues in about every state. When you buy a car you are supposed to get a title and tag within 30 days. People have been going 6 months and still running temp tags.
And that gets into the business fundamental that they failed at. If you are unable to provide the service that your business is built around, then you don't really have a business, you have a half assed ponzi scheme.
You have no idea what you are talking about mate!
Anytime my parents talked about Carvana, I just kept joking about how they wanted to buy a car, but not the title
used to work at their headquarters location in tempe az, and they seem to be in a mindset of extreme growth faster than they are capable of and then leveling out when necessary.
as an example, for a long time during covid carvana hired anybody with a pulse and a car to get to work. and then when they faced issues they immediately let go of 10% of their employees. everyone was unsure if they would have a job every following week. strange that it was often pointed out in meetings carvana has not had a profitable quarter since inception, yet they never had stopped hiring while i was there.
i ended up leaving the company due to mistreatment of employees, and when addressed with my manager, no action was taken.
A friend sold them his car..a Chysler 300 I think with a blown engine for an insane amount of money. I remember wondering at the time how they could make money paying so much for a car that needed so much work. I guess they couldn't.
They where relaying on people being desperate and that laws around there bullshit wouldn't change.
I wonder if your friend told them it had a blown engine.
Finally, I always found these types of businesses were extremely sus
Yup especially how popular they became in 2 years sound sus to me
What "types of businesses?" Internet version of existing business? Like Amazon?
@T P that any car dealer
@T P suspicious, boomer
It makes the mattress industry look good
Great video! Just found your channel and really been enjoying it. I bought my 2015 Kia Soul from them in 2018 for about 10k. I'm due to get another car because mine is about to die, so I went to see what they had. Literally the exact same car (2015 Kia Soul) is now around 17-20k. A NEW 2023 Kia Soul is 22-25k. I still love everything about this company, except their prices are now insane for all the reasons you reviewed. Also LOL at the abandoned vending machines comment at the end
I don’t know why RUclips don’t show your video in my homepage. I have to always actively search for your channel.
Respectfully, this video could’ve been better researched. They have lost their license to sell cars in multiple states because of their incompetency and providing bad vehicles because they didn’t do their due diligence in inspecting and because they don’t process the titles for these cars efficiently so consumers, cannot even drive them on the road legally after the grace period ends.
He did the same amount of research Carvana did when they purchase their cars.
Can you please post your sources of where you got that information of what states that they lost their licenses in? I would like to see that.
@@therealluigi ruclips.net/video/wZSV_p8rEDI/видео.html
I lucked out and got a damn near mint car. Cashed in on a diselgate car when they were sold well below value
@@therealluigiThey are not licensed in Illinois and Michigan as far as I know. There may may be a few other states too. The main reason for this was that they were not delivering titles to customers. Then, instead of getting them the titles, they would send temp tags that were illegal.
They've been in a ton of trouble for not delivering titles in a timely matter. Usually this is a sign that the company isn't making the payoff on the car before they sell it so the lienholder still has the title. I'd avoid doing business with them because if they bust and you sell them a car you run the risk of the bank demanding your payoff with no car to show for it. If you buy a car you run the risk of never getting your tags because you can't get a clear title, especially if Carvana used floor plan funding to buy the car because that car will be tied up in the bankruptcy.
I was actually looking into buying a car from them late in the pandemic when I was going to have to start driving back to work everyday when work from home was ending. The problem I faced was a lot of what effectively amounts to as bid-sniping like you get on eBay. The model I was looking at (BMW i3) would get bought up as soon as one was listed. And it was just frustrating. I ended up getting one from a Carite dealership, because it just ended up being easier.
The first time I heard about Carvana, I thought to myself, "There is no way that business model will be sustainable." It took a while but I guess I was right.
Did you just quote yourself?!?! And then praise yourself?!?!
Yeah, buying stuff online never works.
Carvana paid me substantially more than any local dealer was offering for my 7 y/o Nissan. They can't do that and expect to turn a profit. And yet, media keep running their ads, even though it's obvious they're not going to get paid until the bankruptcy court gives them a small fraction of the bill. Gotta book that quarterly revenue, get the commission check, and worry about collecting payment later.
$500 million in Advertising? That had to have been going into someone's pocket. I legit haven't heard about Carvana in years!
Plus, they had a history of making just three ads and running them for years.
They've been sponsoring major teams in NASCAR IMSA and Indycar for the last few years, that's not a cheap thing to do.
It's not unusual for companies to sink $100.000.000+ into sponsoring top level racing teams in just a single season, back in the 90's when Texaco/Havoline sponsored teams in nascar and indycar they were spending a couple hundred million dollars a year just on their exclusive sponsorship deals with Newman/Hass and Robert Yates Racing.
I'm curious how much digital advertising they've done. NASCAR and the NFL are great, but they're mostly shown on they dying media that is T.V.
Personally, I think they could have reached more people by sinking those dollars into online platforms. This would also allow them to better reach their target demographic, people looking to buy a car.
Dude, that s*** was not all advertising. Looks like the owner was putting a lot of that money into his f****** pocket.
Carvana was also taking forever to register cars during pandemic. Lots of unhappy customers because carvana took months to get them plates.
Whoa things didn't run smoothly somewhere during the pandemic?! So unexpected.
Just wanted to comment a bit more on the legal drama with Carvana in Illinois, as I feel like it wasn't touched on or factored into why the company is struggling enough.
If you look into the state of Illinois laws surrounding license plates, you might notice they're a tad more strict than others, requiring both front and back plates. From personal experience, cops around here are more likely to notice expired plates than a tail light being out. I've been seeing tons of articles (including the one featured in the video) about how Carvana is not supplying its customers with plates in time for them to meet state requirements. Illinois will only issue temporary plates for so long, and Carvana was not able to provide their customers with license plates before their temporary plates expired. In one article, a man reported he wasn't able to get license plates from Carvana for two years. I would be a very dissatisfied customer if something like that happened to me, especially if I was getting pulled over because of something I couldn't control.
I got a 2016 Camry with 27k miles on it last summer. The experience was pretty great. They came to my place and dropped it off and if I kept it, they pointed out a paint chip that wasn't mentioned online when I ordered it and fixed it for free. I wouldn't have noticed unless they pointed it out. I'm pretty sure I paid a premium because it was on the back end of the pandemic, but I can likely drive that car for 10 years without many maintenance issues, and I needed a car so an extra 1-2k over that time isn't the worst.
In January of 2023, the state of Michigan revoked Carvana's license to sell cars in the state for three years. This was after many complaints of delayed titling of cars after the sale. Michiganders can still buy the car online and pick it up in Novi (near Detroit) or have it delivered to their home. But the vehicle will be registered to Arizona so the buyer must then go the Michigan Secretary of State and have it retitled like they moved across the country.
How ironic!
I've never heard of DriveTime, but I just seen one of their commercials immediately after watching this (the commercial was on cable TV, so not something influenced by an algorithm seeing me watching this). The commercial was specifically talking about and advertising in-person sales at a dealership rather than online.
i bought a car from Carvana about two years ago. it took four months to get my permanent license plates and they lost most of the paperwork i signed when i received the car. the purchase of the car itself was seamless, but dealing with them afterwards was an absolute headache. LOVE the car though (2015 Golf TDI) and the model of buying a car online - i would absolutely do it again, but preferably either from another company or afte Carvana gets their crap together.
on a side note...i worked at their competitor Vroom for about three weeks. it was without a doubt the worst job i ever had in my entire life. the management blatantly told us that we only got hired so they could make more money...i wasn't about to belittle myself by working for what was essentially a legal pyramid scheme.
Bought my Benz from Carvana. Simple process, and the vending machine was super exciting. But, getting my tags transfer was a nightmare. Paper tags expired and they shipped another set of paper tags from another state. Drove around with expired tags and kept getting harassed by cops. It was blah
Carvana expanded too fast, and the high costs of operating a giant vending machine, compared to a car dealership! Most places don’t want to build a ten story building just for storing used cars, it’s too expensive for developers to build and operate!
Yeah makes sense that the guy looks like a fool. They could have just put em on a lot and sold em online still. And if someone wanted to go look at it, they could, reeling in the traditional customer base at the same time.
@@ak_getright9905 people just want to see the vehicles in person, this whole online thing is just too complicated!
Is the vending machine more expensive? A dealership has employees to pay.
@@3DJapan it’s more expensive to build the vending machine and to operate it in the long run! Because there’s lots of maintenance and if there’s any issue, they can’t sell anything! I feel a dealership with employees is more flexible, because they don’t need to use that much power! This is why real estate companies don’t want to approve these vending machines anymore!
@@3DJapan does carvana not have employees? Lmao they probably have just as many. No one person of handful of people is running their websites, doing all of that marketing, analysis and risk, oh and buying and selling tens of thousands of cars a month. LMAO!
2:40
That, I have. From that exact DT pictured as a matter of fact.
They glossed over the fact that the vehicle used aftermarket internals. It broke down within two years of me purchasing it, it was barely 5 years old when I bought it too.
my experience was buying a car, waiting nearly two months for it, constantly having the delivery date pushed back till i just got pissed and canceled the sale. The car was never where they said it was, first telling me Louisville but when I said Id come pick it up it was suddenly in North Carolina or Texas. Within minutes of me canceling it the car was back on the website.
For once, I was really lucky and had no issues with Carvana. Bought a car during the pandemic right before the boom, so I got a great deal on a great car. When they drop it off, you can take a look (scratches) and test drive it to see if you want to start the 7 days. Then you have 7 days (500 miles) to have a mechanic look it over, drive it, and then they call you to see if you are going to sign the paperwork and buy it. I did, and they walked me through every step just as they would if I was there. I had 100 questions on wording and they were so kind and patient with me Absolutely no issues with titles, financing, warrantee, and the car was in near perfect condition. I'm happy I got lucky, but they really shot themselves in the foot afterwards, it seems.
Same experience here. 🤷🏾♂️
Me as well
Same here! It was a wonderful experience. I had no problems at all.
My experience with them was also very good! I picked mine up in the tower in Cleveland. No issues and the car had less blemishes than advertised.
I got lucky too, bought a used Kia Forte with 34k miles. Drove that little car into the ground until 160-180k miles with the alternator going out at 160k mark and the radiator fan around 150k.. but that was all the issues, and each part was less than 200$ to replace.
Thankfully I started dating a mechanic right before this all happened 😂 so no labor cost.
**forgot my oil sensor broke. 20$ part. Could’ve been costly if I didn’t know about cars and let the oil spew from the car. This was around 160k as well.
I remember seeing a story like two years ago during the pandemic and Carvana’s growth where the algorithm priced a persons 10 year old Honda fit and paid him roughly what he bought the car for 10 years earlier. That’s the kind of stuff that definitely cost them a lot of money. I’m sure it happened more than just this one person.
The vending machine in Indianapolis was torn down to make room for highway expansion.
The loss of dealer license was a big problem, but I think the nail in the coffin was when they laid off a bunch of workers and acquired Adesa within a week. I'm not sure if Adesa can float them up or if they're both going down.
Those of us who work in the car business knew this would happen. Overpaid for vehicles, easy return policy, can't license and register cars. No matter how much people complain about buying a car, they need to come and sit, drive, and work within a system set up to license and register the vehicle
Only a fool overpays for a vehicle sight unseen.
Thank you for posting the video. I've always wondered about the decline of Carvana.
I would never buy anything as expensive as a car online without inspecting it in person first. I always thought Carvana seemed like a bad idea when I saw the ads.
the fact that we're in the online era, that doesn't mean the online experience will always be satisfactory. Old school will never die, physical presence is necessary, wether you like or not. Don't be lazy and have fun with person in person experience 😊
Wow! I had no idea. I had bought my car from this company several years ago, and had no problems. I guess that I got lucky.
Same, I had no issues as well. I still have my vehicle but unfortunately it was a sonata with a bad engine. Luckily I took it to Hyundai and got it replaced for free.
I got my car from here also and no issues! Maybe we all got lucky lol
I bought 2 cars from them and no issue with title or car.
“Most known for their car vending machines.”
Actually most known for not giving people their titles and selling shady cars.
There’s also a lot of horror stories of people purchasing their vehicles and they end up being busted and have a lot of cosmetic issues
A close friend of mine got a car from Carvana and she said it was hell. The car they were giving up had major transmission problems and Carvana promised to send the new car to them. Days later, they told them they could transport the car to them, they had to drive some distance to meet up with Carvana. And on top of it, they were days late with the car. Luckily their old car didn’t die on them but the fact that all of that happened to my friend, along with the stress it gave them told me to never even consider Carvana as a choice for where to go for a car.
I'm a bit surprised Carvana has such a reputation. In my experience with them, they treated me pretty well.
Back in May of 2020, I was seeking out a car since I had just wrecked mine at the start of that month. I came across a 2016 Buick Verano that looked pretty good. I got everything filled out and waited for them to deliver the car to me.
Before I got it, the car was discovered to have a serious problem with its electrical system. They told me this and said they would have it fixed and then send it.
It ended up being seriously broken, and Carvana recommended I choose another car. So, I chose another Verano that was a 2015 model and had fewer miles on it.
I've been driving it since June 2020 and runs well with no major issues. Whoever at Carvana notified me of the issue before it arrived and is a hero. Saved me a BIG headache.
One of their issues was lack of consistency. Poor training, vague policies, and high turnover. So one CAN get a good rep, but that is just a skilled individual, not someone who has been trained and has a support structure behind them.
With all due respect to you, they were absolutely not a hero and helping you was not their motivation. They discovered the car you wanted was a pile of poo and wouldn't start or run. They had no choice but to contact you and tell this and "request" you choose another vehicle. They have a lot of bad cars in their fleets.
Seems like you had enough issues that they actually took care of you. Most people didn't get their issues fixed, or in my case they wouldn't even try to sell me a car I was trying to buy in the first place lol
My experience’s with Carvana have all been positive
Very interesting video as always on this channel. We were supposed to get a new Carvana in the Polaris Parkway area in Columbus, Ohio pretty close to where I work. They tore down the building which used to be a family fun center called Magic Mountain which had video games, miniature golf, laser tag, and go carts. Anyway, they tore the place down and I kept waiting for the construction to begin because I would be able to see it on my drive home and thought it would look really cool once built. It's been about a year, and so far nothing has been built yet and now I see why. Thanks for the great video on the decline and very well likely going out of business of this company.
lmao damn that sucks. RIP Magic Mountain
I purchased a car from them in 2021. It did take like 6 extra months to get my license plates, but in the interim, a temporary tag was always provided. I paid the vehicle off at the start of this year and got the title less than a week later.
I bought a 2020 Toyota Supra from Carvana and after having it for only two days, the check engine light came on. I took it to a Toyota dealership and after about 30 minutes they called me into the garage. Turns out the previous owner straight piped it. In other words the catalytic converter was completely scooped out. Don’t get me wrong. It sounded great and was a blast to drive but before I could pass inspection I would have to replace the catalytic converter. Carvana was dragging their feet about replacing it so I sent it back, got my deposit back, and bought one from a Porsche dealership. Moral of the story: buy from a dealership
I actually lucked up with Carvana. Got approved for a loan with my bank as they were running a special deal with Carvana. Traded in my used car and they definitely overvalued it because instead of inspecting it, they took the KBB at face value, despite some hits, dents, and mechanical issues.
You lucked up but someone else lost out lol. Not a great business model
If I recall Carvana got sued for consumer fraud. When they claim to do a “150 point” inspection, to verify they’re getting a quality used car. Instead they were giving vehicles barely held together, just long enough for the customer to get the vehicles.
So they can get bigger profits margins for even worse cars, they got for cheaper for the litany of problems the vehicles had.
I think it's a great idea that dealerships will copy. It makes more sense to allow your customers the option of speaking to someone in your dealership before purchasing or picking up a car they ordered online. Additionally, when you go and pick up your order, you have the opportunity to speak to a salesperson and ask additional questions. It's really a great idea for dealerships to implement.
The car vending machine you're talking about is basically a parking lot/machine in East Asia in high density areas.
Selling junk cars at high prices and often-times not even sending you the title? How did they ever even become a brand known for anything other than ripping people off?
I live across the street from a carvana lot lol there’s no vending machine here, and they just laid off their entire 2nd shift after being built just a few years ago lol
Carvana are also known for their partnership with 7-Time NASCAR champion Jimmie Johnson. They sponsored his Indycar starts from his NASCAR retirement through this previous season. Upon Johnson’s re-entry into NASCAR at this year’s Daytona 500. Their partnership would continue through their bankruptcy up until they were bumped off his next few starts by Club Wyndham. Side note: I live not too far away from their complex in Gaithersburg Maryland. Thing has been empty for years and I want to see it made into an adventure park
The first issue I had since day one was you couldn't see the car before buying it
Couple reasons why they’re failing first rule of buying a used car is to NEVER buy site unseen second reason is it’s a scam
For Carvana to have their dealer license suspended in several states, you have to be making MAJOR missteps. This is a huge factor. Carvana has had very low integrity business activities to get to that point. Huge huge huge impact
Hey company man, can you do a video on Lumen Technologies?
I love your content been watching you for over a year now!
A thing to point out, is to get a used car, you often have to sell a new car. New car dealerships get those trade-ins and get them cheap. Many make very little on the new cars sells but their used car division will really bring in the money. With Carvana only being used cars (and I can see why because new car dealerships must have physical territory) they lose out on those 2-year-old low mileage trade-ins. Instead they would have to get the vehicles from other Carvana customers and from wholesalers that get them at auction. But auction cars are more likely to have problems because the vast majority of them are bank repos.
That stock chart at the minute mark is not a accurate depiction of the company's rise and fall. Almost every other major company's stock chart is similar to that. They all fell sharply at beginning of pandemic and rose abnormal amounts in between before returning back to 2019-2020 numbers as of today
This is why CarMax says they're the way car buying should be
They suck too, but at least they're not as bad as Carvana.
I think you missed the fact that the company has major customer service issues. I tried ordering a car from them twice and with both cars every time the delivery date came up it would get pushed back two to three weeks. A quick online search showed that this and other issues were common.
As much as I liked the concept of Carvana, any analyst that ever referred to them as an "industry disrupter" should probably be looking for a new line of work- considering they've NEVER turned a profit.
Tbh the reason why I know of Carvana is because Jimmie Johnson, former IndyCar driver and part-time NASCAR driver, sponsors them.
Not to go off on a tangent fr the topic of the vid, but I noticed he wasn’t at the St. Pete Indy race.
Is he not participating this season?
@@jbllc6873 no
@jbllc6873 He's done with IndyCar. He's now just a part-time driver for a team he partly owns in the NASCAR Cup Series, Legacy Mortor Company.
@@XxmetalHeadxX88 thanks.
Lol turn left turn left
We bought a 2018 Subaru Forester from them and later found out too late that the transmission and engine had been swapped with older parts prior to sale. It was burning oil by 2020. Fortunately, we were able to trade it in for more than we paid due to the pandemic and got a Toyota RAV4. So far so good on the Toyota.
I've worked at a traditional dealership for years. I love the idea of Carvana- that's the way of the future and I'd love to buy a car like that, but if we were so irresponsible, we'd be out of business ages ago. Carvana has known issues with not inspecting cars, not getting title to cars, and not properly registering cars. As a dealer, I cannot let you take a car home until I have the title, and I cannot even let you sign the sale paperwork until I have the title. My cars have to pass a state safety inspection to be sold, and if they won't pass or it's not economical to fix them enough to pass, I cannot legally sell the car. Cutting corners and breaking the law is what got Carvana in trouble, and paying far over dealer retail if you sell your car there? No wonder they're in trouble.
I love the *concept* of avoiding the car salespeople and dealership but I don’t think Carvana has executed it well. I’ve heard from acquaintances that cars don’t arrive on schedule, they’re not as described or missing titles, there’s no support from customer service, etc. I wish we could just buy online straight from the manufacturer. 🤷🏻♀️
Starting off by explaining a previous fraud scandal, never a good look for long term success.
the photo you used for Drive Time is the location in my home town of Mishawaka, Indiana !
My purchase with Carvana is a perfect example of them spending top dollar on trade-ins during the peak of the pandemic and making bad investments.
In December 2021 I purchased a low mileage Chevrolet SS from Carvana for a fair price that was lower than other examples. I also traded in my six-year old Sonic with 22k miles and they offered me more for it than what I paid when it was brand new. It was too good to pass up.
The Sonic languished on their site and it finally sold about eight months later after several price reductions.
They simply paid too much for these trade-ins in the hopes that the demand remained high.
Unlike other stories here, I had a great experience. The delivery of the SS was delayed multiple times, but the staff was always friendly, the transaction and paperwork were seamless, there were no title issues, and the SS was in fantastic condition. I wouldn't have ever thought of buying online and it was intimidating not seeing the car beforehand, but the experience was wonderful and I have always recommended Carvana ever since
Holy heck you went from a sonic to an SS?!?!? What a major upgrade lol! Congrats on the Holden Monaro!
@@805NAVE Thanks! It was a huge upgrade and I wanted a new SS when I bought the Sonic in 2015. The SS/VF Commodore was my dream car. Just couldn't afford it back then and spent years saving up until that moment. The SS had only 8k miles, so it was practically new.
One big factor that you didn't mention is that they don't have a good track record of providing good customer service and quality products. If you look at the reviews for pretty much any carvana location, about 3/4 of them are one and two star reviews complaining about how it took people months to get their car titles so they had purchased a car that sat in their driveway for a long time because they couldn't drive it, and there were a lot of other complaints about the cars being in poor mechanical shape in spite of them being advertised as in good repair.
My brother-in-law tried carvana and he bought a Nissan that was advertised as needing no repair. Within a week, the car was starting to experience problems so he brought it into the dealership and there was a whole laundry list of stuff wrong with the car, the repair bill was quoted at almost $6,000.
To their credit, carvana gave him a full refund outside of the quoted warranty period.