Carvana

[BBatesokc]

I've tried twice now to buy from Carvana and struck out both times - as their prices were too high and the deal would take too long to get delivery on a cash purchase. Most recently was last week.

I wanted (and got) a barely used one-owner lease return Nissan Murano Platinum. The cheapest I could get it on Carvana (after fees) was $26,900. I walked into a Edmond dealership and bought the exact same car (and mileage within 3,000 miles) for $22K out the door and had the car the same day.

*Dealer's original price was almost $25,000 out the door on a cash deal. So, still cheaper with zero negotiations.

Had the same experience before when buying an Infiniti.

This may work for some people, but I don't see the allure.

[okatty]

^I’d second this. They were not close on a car I looked at a few months ago. Got a much lower price at a dealer making the entire deal by email and text. I’m sure it is different from deal to deal but my experience was like BBates. Have always had this experience with Car Max but was hoping Carvana would be different. At least in my case it was not.

[d-usa]

Caravana and Carmax and IKEA all have the same thing going for many people, including me:

It’s worth it for me to pay more just so I don’t have to deal with the hassle of dealing with people at the dealership or furniture store. You want a couple thousand extra just so I don’t have to have someone who lives or dies by their commission breathing down my neck, spend hours playing the “let me talk to my manager to see if we can make this deal” game, and avoid being haunted for up-sales? Here’s my money!

[BBatesokc]

^I’d second this. They were not close on a car I looked at a few months ago. Got a much lower price at a dealer making the entire deal by email and text. I’m sure it is different from deal to deal but my experience was like BBates. Have always had this experience with Car Max but was hoping Carvana would be different. At least in my case it was not.

For me, for a used car that is probably out of warranty, that I can't walk around, sit in, or test driver until it's paid for and delivered, it had better be a couple grand cheaper than I can buy locally or there is no way I'm doing the deal. Especially if local dealers are not more than $500 over Carvana's price or cheaper.

[okatty]

Easier and less hassle is worth a lot to many. And I’m sure quite a few (as have posted here) actually get what they feel is a good deal on top of that as well. I am not knocking it, but had same experience in terms of price as BBates posted.

[Thomas Vu]

Would it be too far of a reach to have the same analogy of buying on CL vs eBay?

[jerrywall]

Would it be too far of a reach to have the same analogy of buying on CL vs eBay?

I'm not sure that comparison fits. At the end of the day you're still buying the car from a dealer. The interaction is just all virtual here. Obviously, deals and pricing evidently have a "your mileage may vary" aspect to them. I know I was looking for something specific (a late model, low mileage, 6 speed, mazda3), and I saved a bit over anything I could find in local dealerships. And I never had to site down with a sales person, have the "manager" brought over to make me a special offer, then sent to spend hours with the finance manager, and have an extended warranty shoved down my throat, and such. And the 7 days to drive it around, have it inspected, and such, before deciding if I want to keep it? Better than anything any local dealerships have offered me (don't know if anyone knows any dealerships that let you do that). If the car price was a wash or better, it's a no brainer for me for the experience difference. Even if I had paid a bit more, it might have been worth it, considering the cost on my time.

[Richard at Remax]

It's fascinating to me that someone will spend thousands of dollars more to not deal with someone on a asset that depreciates probably double that when you drive it off the lot.

[jerrywall]

Just to be clear, I wouldn't spend thousands more, and I'm not sure anyone else has expressed that willingness either.

But the sales people add nothing of value whatsover to the transaction.

[d-usa]

Whatever the reasons, Carmax and Carvana seem to be in a market that supports them.

[emtefury]

When I was recently shopping for a used car, Carvana’s prices were above the advertised price of the local dealerships. Carmax was closer to the dealerships, but still higher. May work for some, but didn’t work for me

[Thomas Vu]

It's fascinating to me that someone will spend thousands of dollars more to not deal with someone on a asset that depreciates probably double that when you drive it off the lot.

Depends on how you value time. Also easier to swallow when you put it in percentages. The examples given seemed like 10% more or less.

[d-usa]

For some, there may also be a trust issue and the feel like there is less risk with a used car from one of those places than a dealership.

[SoonerDave]

I believe Carvana has differing profit/pricing models based on vehicle types. The price I paid for my 2015 Lexus ES 350 was at or below all three major pricing services and well below what I found for even roughly comparable cars locally. The closest local price was on a model with a prior collision history. And I had the balance of the manufacturer warranty.

Remember, too, that Carvana doesn't add "fees," but tag, tax, and title that you will pay either way. So it is important no one get the impression they are tacking additional profit on their quoted price. BBates, did your price include tag, tax, and title? Would be important for a true apples-to-apples comparison.

Like many retail outlets, Carvana will work for some, not for others. It worked great for me. As with all things, YMMV.

[BBatesokc]

Depends on how you value time. Also easier to swallow when you put it in percentages. The examples given seemed like 10% more or less.

I don't get that comment. In my example, the difference was 18% ($4,900) hardly pocket change. Also, how is throwing away 10-20% saving time when the dealership process might take from 1-3 hours and Carvana takes several days to get your vehicle? Plus, who here has time that's really worth a couple thousand dollars for a couple of hours when car shopping? But, considering lots of people buy brand new knowing it's probably the single worst financial decision they could repeatedly make - I guess people can make anything make sense. The car I bought was originally purchased just two years ago for $39,000. So, it lost 44% of it's original value in only 2 years - insane IMO. I personally try and save every penny when car shopping simply because I start loosing money on day one. The only car that ever made me money was my Prius (got totaled in the recent hail storm). I drive enough that the mileage deduction/reimbursement actually caused the car to make me money.

[BBatesokc]

...Remember, too, that Carvana doesn't add "fees," but tag, tax, and title that you will pay either way. ...

No fee? Then what's the $299 delivery FEE?

And yes, I'm including my $1,000 (and some change) registration and tag. I always call my insurance and the tag office before we buy any car so I know what I'm getting into.

[jerrywall]

? I didn't have a delivery fee. I know some areas do but Oklahoma is in their free delivery area (or was in January)

[Thomas Vu]

I don't get that comment. In my example, the difference was 18% ($4,900) hardly pocket change. Also, how is throwing away 10-20% saving time when the dealership process might take from 1-3 hours and Carvana takes several days to get your vehicle? Plus, who here has time that's really worth a couple thousand dollars for a couple of hours when car shopping? But, considering lots of people buy brand new knowing it's probably the single worst financial decision they could repeatedly make - I guess people can make anything make sense. The car I bought was originally purchased just two years ago for $39,000. So, it lost 44% of it's original value in only 2 years - insane IMO. I personally try and save every penny when car shopping simply because I start loosing money on day one. The only car that ever made me money was my Prius (got totaled in the recent hail storm). I drive enough that the mileage deduction/reimbursement actually caused the car to make me money.

26900 listed price for carvana
25000 listed price for dealer
difference of 1900
.10 * 26900 = 2690
2690 > 1900

If you want to take your anecdotal scenario and broadly apply it to everybody, that's your deal.

[SoonerDave]

Inadvertent duplicate.

[SoonerDave]

No fee? Then what's the $299 delivery FEE?

And yes, I'm including my $1,000 (and some change) registration and tag. I always call my insurance and the tag office before we buy any car so I know what I'm getting into.

Fair enough. That just means you were looking at a vehicle that was not within Carvana's OKC free delivery zone. When I was shopping at Carvana, among the dozens of vehicles I saw, I think perhaps *one* fell outside then one and had a delivery fee. Perhaps it has to do with the scarcity of a specific type, style, or feature set on a given vehicle. Sorry it didn't work out for you. As with all things, it's important to do your research. The point is that the general transaction for Carvana doesn't add arbitrary garbage fees like local dealers do, such as "prep," "doc fees," "transaction fees," or similar nonsense. You generally pay their price plus local tag, tax, and title costs, plus delivery when applicable

I don't mean to be a Carvana shill, because I'm not, but just as you, I can only report on my own experience, which was a total success in all respects for me, including price. And I honestly never thought about the time and gas I *didn't* spend chasing cars down private lots or from other ad sources.

[Filthy]

For some, there may also be a trust issue and the feel like there is less risk with a used car from one of those places than a dealership.

CarMax and Carvana buy all of their inventory from the EXACT same places that Bob Moore, Bob Howard, Smicklas, Hudiburg, Eskridge and all of the other OKC area dealerships secure all of their inventory from. The exact same pool of cars, dealer auctions, factory off lease sales, rental fleets. Period. There's no magic sauce, that CarMax or Carvana sprinkles over their inventory that makes them better/nicer/less prone to mechanical malfunction.

At the end of the day, CarMax and Carvana are great business models, because they cater to individuals who are scared/insecure and/or nauseated by the thought of having to deal with a real live salesperson. And clearly, there are a lot of those individuals out there. So kuddos to them.

But the fact remains the same, one of the main reasons CarMax and Carvana are such great business models is that they hold their margins, by offering their no haggle/no hassle experience. On a like/like apples to apples comparison, 9 times out of 10, you can step foot onto any pre-owned lot here in OKC, and walk away with a better out the door final price on just about any make and model car, that is just as nice, or possibly even nicer than whatever Carvana has to offer.



Easiest example-

Lets say there are a handful of 2016 Lexus IS cars at an auction. (Offered by Lexus Lease return)

Carvana buys one, and Eskridge Lexus of OKC buys one. (2 cars, sitting right next to each other, at th same auction, with pretty much exact same history. No accidents, perfect carfax, blah blah....etc. Just for fun, let's say they both pay exactly $25,000 for their cars.

Carvana sets their profit margin at $4,000 and parks it in a vending machine, and online for a No haggle/No Hassle price of $28,998.

Eskridge Lexus of OKC sets their profit margin at $7,000 and parks theirs on their lot and online for a price of $31,998.

This is where you enter in the two different types of consumers/personalities/mindsets.

The CarMax/Carvana type B consumer, will see both posted online and seeing that the Carvana price is already a great deal. They will go and buy that car, and be happy with their purchase, love the total experience, and tell everyone that will listen how great of a deal they got. (Paying $28,998)

The traditional type A consumer, will see both posted online and agree that the Carvana price is better. However, they decide to also head down to Eskridge Lexus, to see what they can buy that one for, before making a buying decision. Walking in, telling the Dick Cheese sales guy or manager, that they know that Eskridge only gave $25,000 for the car, and they can either sell it for $25,500 and put a deal on the board...or lose a customer to the Lexus store in Dallas. They will then buy that car, and not feel like they need to tell everyone how great of a deal they got. (Paying $25,500)

Rinse/Repeat

[TheTravellers]

...
The traditional type A consumer, will see both posted online and agree that the Carvana price is better. However, they decide to also head down to Eskridge Lexus, to see what they can buy that one for, before making a buying decision. Walking in, telling the Dick Cheese sales guy or manager, that they know that Eskridge only gave $25,000 for the car, and they can either sell it for $25,500 and put a deal on the board...or lose a customer to the Lexus store in Dallas. They will then buy that car, and not feel like they need to tell everyone how great of a deal they got. (Paying $25,500)

Rinse/Repeat

How does the prospective buyer know that Eskridge gave $25,000 for the car? I haven't bought in over a decade, so things might've changed, but I seem to remember that the price a dealer pays for a car is something they like to keep secret.

[jerrywall]

How does the prospective buyer know that Eskridge gave $25,000 for the car? I haven't bought in over a decade, so things might've changed, but I seem to remember that the price a dealer pays for a car is something they like to keep secret.

You can make an educated assumption, based on the value of the car. This wouldn't be 100% accurate, but it gets you close.

[Dob Hooligan]

I think the vending machine is a psychological pre-qualifier for a customer. A person who sees a car as an appliance, or a commodity. A smart person who believes a faceless big company is more honest that a "slimey", local used car dealer. A vending machine always delivers a fresh, icy cold Coca-Cola, doesn't it?

Now, how does a person dispose of their previous car, and how do they get their Carvana purchase financed? I assume Carvana handles both in some fashion, but they are also a part of the "good deal-bad deal" equation (AKA "You Got Screwed").

[SoonerDave]

I think the vending machine is a psychological pre-qualifier for a customer. A person who sees a car as an appliance, or a commodity. A smart person who believes a faceless big company is more honest that a "slimey", local used car dealer. A vending machine always delivers a fresh, icy cold Coca-Cola, doesn't it?

Now, how does a person dispose of their previous car, and how do they get their Carvana purchase financed? I assume Carvana handles both in some fashion, but they are also a part of the "good deal-bad deal" equation (AKA "You Got Screwed").

I sold my old car privately and made more than I expected. Trade-ins are a loser proposition, and my car was an age where I'd have been lucky to get anything for it LOL.

Carvana will give you the option of financing through them with a rate offer based on a soft pull of your credit at the time of purchase. They offered me a good rate, but not better than my credit union.