The Dramatic Fall of Carvana, “The Amazon of Used Cars”

It’s a bright red in the portfolio of Carvana’s shareholders, an online used car platform.

In a year, their stock had lost most of its value, no doubt giving them the impression that they invested in penny stocks.

But still Calvana (CVNA) – Get Free Report At the end of 2021, the wind was blowing in the sails.

The company was Amazon’s counterpart in the automotive industry.

It had become a place for consumers to buy and sell used cars. The company’s business model was fully symbiotic with the economy moving online due to restrictions to limit the spread of the pandemic.

He vowed to transform the notorious used car market with an innovative business model and win the trust of used car customers. The Tempe, Arizona-based company says it has found a formula that makes buying a used car a satisfying transaction for its customers.

one stop shop

Carvana wants to be your one-stop shop for used cars. In fact, the company offers its customers a turnkey purchasing solution. We inspect, repair, finance and sell vehicles purchased for resale. None are original at the moment, and there are used car dealers now offering the same service.

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The difference is that you can access your inventory from your company’s virtual catalog. His patented 360-degree imaging technology allows you to see each vehicle through the glass. Customers can have their cars delivered to their homes.

You can also visit one of the giant Carvana vending machines in over 25 US cities to pick up your new purchase. Yes, our collection of 24 used car vending machines is Carvana’s specialty.

With one of these vending machines, customers can easily pick up their new car while dropping off their old one. Alternatively, Carvana will ship the purchased vehicle directly to the consumer. Each vehicle is covered by our 7 day return policy.

This model gave Carvana an advantage as the US used car market is highly fragmented. There are now about 43,000 used car dealers, of which nearly two-thirds are independent.

The problem is that the company doesn’t seem to have anticipated the headwinds. In particular, the slump in the used car market, especially with a potential recession and a sharp rise in interest rates, has made auto loan financing expensive, signaling a normalization of the market. new market.