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JG Pasterjak
JG Pasterjak Production/Art Director
4/9/19 12:14 p.m.

By now, you’ve certainly seen the commercials or—if you’re in one of the now 107 markets served by Carvana—one of their giant automotive “vending machines” next to a major highway. Standing nearly 100 feet tall, these vending machines look like every automotive fantasy you ever had when you were putting your Hot Wheels into their carrier. Carvana’s vending machines are the architectural manifestation of their promise to bring the public a “new way of buying a car.”

But is their new way any better? As a journalist, I wanted to know. And as someone who realized they didn’t need both a pickup truck AND a minivan, I also wanted to know.

So, I took one for the team and found out, the hard way. Which turns out to have not been so hard after all.

It all started online late one night—as most great adventures do—when the realization began to sink in that, although I liked my 2015 Ram Promaster City minivan, owning both it and a half ton pickup was a bit redundant. Then there was the Suddard Boy, all smug and gasless with his fancy electric car. Seeing Tom’s Nissan Leaf at the office daily made me miss the days when I drove a Chevy Volt and filling up meant electrons at $.10 per Kwh instead of hydrocarbons at $3.00 per gallon.

Just as I was deep in thought, a Carvana commercial came on, promising great deals, an easy transaction, and peace in our time.

“Pshhh. Bullcrap!” I exclaimed. Probably. Since I say that a lot anyway. “Anything that seems too good to be true probably is.”

Moments later, I found myself on Carvana’s easy-to-navigate website looking at Nissan Leafs.

Prices were a bit steep compared to other segments of the market. Larger used car retailers like CarMax or Autonation seemed to be a few percent below what Carvana was looking for—and private party sales were cheaper still—but the Carvana choices seemed uniformly nicer and lower mileage. Plus, the search functions were quick and intuitive. Best of all, every facet of the pricing was laid out on each car’s page, so I knew exactly what I was getting into when I was shopping.

Then I entered my trade info, which consisted of the VIN from my Promaster, and a few simple questions about its mileage, condition and options. I hit a button, and their system spit back an offer for my trade.

It was… fair. Generous, even. While they were asking high-book for the Leaf I was shopping for, they were also offering high-book for my trade, which was more than any other retailer had offered and as much or more likely than I’d be able to get on the open market, with the added bonus of not having to deal with the assembly line of idiots from Craigslist.

As it turns out, paying a premium for trades and stock acquisitions was not an isolated incident for us in the Carvana world. In hearing from associates in the auction business, they uniformly report that Carvana reps at the auctions are professional and courteous, but not at all shy about outbidding their competition on quality cars.

And that auction scene was even the genesis for the entire concept of the company. We spoke with Amy O’Hara, Carvana’s Associate Director of Communications, and she made the connection from the wholesale market to the retail concept. “Our founder, Ernie Garcia, comes from a background in wholesale. He was used to going to an auction and making transactions on cars in a matter of seconds with little hassle and wanted to find a way to bring the best parts of that streamlined experience to the consumer.”

So far, so good. At this point I was impressed with their offer on my trade, satisfied with their price on my purchase, and even delighted with their in-house financing rates, which were only about half a percentage point more than I was currently paying with my credit union. Sure, you can bring your own financing or cash, but the difference was a few bucks a month, and for that I didn’t want to further complicate what seemed like a fairly easy process by getting another party involved. Plus, at this point I was basically committed to living or dying by the full Carvana experience. For you, the reader. It should be noted that I—possibly a rarity among automotive journalists—have really good credit. I can’t speak to the rates for someone who’s run into some snags along the way, but typically in-house financiers like this are not as kind to the credit challenged.

Now, we play the waiting game.

My new Leaf—which I had confirmed through a VIN search was a one-owner, just-off-lease car from the Atlanta area—was coming from within Carvana’s ‘free delivery’ area. Delivery fees for in-stock vehicles ranged from free to about $700 to ship a car all the way across the country. Additionally, I scored a $500 off “coupon” merely by posting on a Reddit thread that I was looking to buy a Carvana car. A previous customer contacted me and shared a loyalty code that got me the discount and got her a small kickback as well. I was also within 100 miles of one of Carvana’s signature “vending machine” delivery centers, so I was eligible for free personal delivery of the new car and pickup of my trade. Outside that 100-mile radius, customers have the option of traveling to a delivery center or having the Carvana transporter meet them somewhere within the 100-mile radius.

During the time before my delivery, I contacted Carvana a few times to clear up some “surely this is too good to be true” questions. Their reps answered all my concerns thoroughly and professionally.

“When you deliver the car, how long do I get to inspect it? What if it sucks?” Customers get up to 60 minutes to evaluate their purchase upon delivery, including a 15 minute test drive. At any time, the customer can pull the plug on the transaction with no obligations whatsoever.

“What if my trade is worse than I said it was? Will the deal change?” Like the consumer, Carvana can also call the deal off on your trade if they show up and there’s a family of marmosets living in it that you failed to mention previously. While you’re evaluating your purchase, the delivery driver will also be looking over your trade to confirm it’s what you said it was. Once your trade is loaded and hauled away, though, the value is locked. There’s no getting it back to the mothership then trying to renegotiate.

“I never really got to test drive this car. I’ve had it three days and have now realized something I hate about it.” Well, that’s not really a question, but Carvana does give you a seven-day, 400 miles, no questions asked return policy. The only cost you’d be liable for is delivery outside the normal 100-mile free delivery radius if applicable. The one other catch is that if you return three cars, you’re put on hold for 90 days before you can buy another one, which seems like an entirely reasonable policy.

Still, even with all these generous safety valves in place, O’Hara told us that fewer than 10% of cars are either refused at delivery or returned inside the free-return window.

On delivery day, it all basically went according to plan. The delivery driver showed up at the appointed time, and I let him know that I’d be using every second of my allotted inspection time. I probably have better resources to inspect a car than most folks—the driver did admit this was the first time one of his deliveries has been thrown on a lift and had all four wheels removed and a WiFi dongle hooked to the OBDII port before someone even heard the stereo—but there was no pressure to make a hasty decision, and it was reinforced that I was under no obligation to take a car I wasn’t 100% satisfied with.

In the end, though, I was satisfied, and the driver was satisfied with my trade, even complimenting its cleanliness and presentation. The paperwork was signed in about 10 minutes, and a few minutes later, my new car was in my driveway while my old van was leaving it.

And so, my experience, while limited to a sample space of one, was certainly positive. Could I have found a cheaper deal on a car from a private seller? Sure. Probably. But how much effort and time would I have expended to research, shop, negotiate and acquire that deal? Would that deal have come with a no-questions-asked week long guarantee? A 10-day warranty? No and no.

Is this the better mousetrap? It was certainly not much more hassle than buying some speaker cable on Amazon, and by far the least stressful car purchase I’ve ever been involved in. In fact, much of the stress of the process was me calling or chatting Carvana reps basically asking them “Really? Is it really this easy?” With the answer mostly being “Sir, this is a Wendy’s, I think you have the wrong number.”

The other question, from an industry perspective, is whether or not this business model is sustainable. So far in their early history, Carvana appears to be in startup mode, working hard to build a culture and customer loyalty, not worrying much about profits. Some financial commentary outlets were reporting that every car they sold was costing them over $1000 in their early days. But O’Hara—and their latest shareholder reports—tell us that trend is reversing and heading rapidly toward the black. Additionally, much of their focus at the moment is on changing the culture of car buying as much as the process. O’Hara said that their hopes are to not only be delivering upwards of 2,000,000 cars a year to consumers in the foreseeable near future, but they also want to demystify and democratize the car buying process, eliminating much of the needless complexity that lies between the consumer and the product.

Ultimately, my new Leaf was probably even better than I was expecting. Their photography process is thorough, but the photos aren’t the greatest, and certainly not as flattering as I’d expect from someone trying to “sell” me a car. But I guess that says more about my expectation of how the process should be rather than how Carvana is actually doing it. The car that showed up seemed cleaner than it did in the photos, and the paint chip that was referenced in the listing was barely even noticeable in person. Honestly, if I had been selling that car, I’d have probably not have even mentioned the chip, and I’d have dramatically photographed the hell out of the thing like it was going on the next cover. But that’s me coming from a frame of reference that Carvana is specifically trying to leave in the past.

Would I buy a ‘specialty’ car this way? Not sure. If I were looking for my next track or autocross car, it would probably have a very specific set of options that I’d want to examine and confirm in person. Likewise, when questioned about the possibility of expanding into specialty or collector markets, O’Hara made it clear that Carvana wanted to focus first on the widest possible marketplace before adapting the business model for more specific niches, although she didn’t rule out that the business model could be adapted for more specialized markets.

But would I buy my next daily driver through this process? Heck yeah. Shopping for non-fun cars is a hateful process. Anything that can be done to decrease that misery is a win in my book. In the meantime, if anyone wants a loyalty code for a discount, just hit me up.

Read the rest of the story

AnthonyGS
AnthonyGS HalfDork
4/9/19 12:46 p.m.

After my wife’s CX-9 was stolen, I used Carvana to get her VW.  It was the most painless car buying experience ever.  It was easy, fast, clean, and no stupid add ons and upcharge attempts galore.  

 

 

gnichols37
gnichols37
4/9/19 1:55 p.m.

What a load.  This rig is nothing more than a Japanese vertical parking lot with glass sides.  And you, of all folks, should know that buying a vehicle without sitting in it  - and taking it for a test ride - is perhaps the dumbest idea ever for buying a vehicle.

Ian F
Ian F MegaDork
4/9/19 2:08 p.m.

In reply to gnichols37 :

Hmm... obviously didn't read the article and first post is trolling... frown

Vigo
Vigo UltimaDork
4/9/19 2:14 p.m.

I liked the write up, and i'm going to look at their website. I know a lot more about Carvana now than i did before reading this. Sounds like mission accomplished to me, and i didn't even get a Leaf!

Ashyukun (Robert)
Ashyukun (Robert) UberDork
4/9/19 2:59 p.m.

We saw a lot of signs advertising them on our drive to and from IoP for Spring Break last week and I was planning on checking them out to see if it was a viable option for replacing the Dancer's ailing Mariner. Good to hear that it might be a workable option- though we would need to check a few things in general (like if what she usually needs to transport will fit as easily as it does into the Mariner) in person on a model of SUV in general. 

AnthonyGS
AnthonyGS HalfDork
4/9/19 3:20 p.m.

My wife drove 4 different SUVs at Carmax.  Carvana had a cleaner better equipped one, lower miles and lower price.  It was a no brainer at the time.  You can also return the car if you don’t like it and you take a test drive before signing the dotted line.

Brett_Murphy
Brett_Murphy UltimaDork
4/9/19 4:18 p.m.
gnichols37 said:

Spot the traditional car salesperson.

 

Busajeff
Busajeff
4/9/19 4:27 p.m.

Last time I shifted cars I went to the carvana site and their offer for my trade was about 25% of what I could find anywhere else. It really didn't matter what they had for sale, I never made it past the trade evaluation stage. I eventually traded it in for approx the value I found pretty much everywhere else. I'm well aware that any dealer can shift discounts on the new car to add money onto the trade but carvana was so so so far off....

JG Pasterjak
JG Pasterjak Production/Art Director
4/9/19 5:24 p.m.
Busajeff said:

Last time I shifted cars I went to the carvana site and their offer for my trade was about 25% of what I could find anywhere else. It really didn't matter what they had for sale, I never made it past the trade evaluation stage. I eventually traded it in for approx the value I found pretty much everywhere else. I'm well aware that any dealer can shift discounts on the new car to add money onto the trade but carvana was so so so far off....

That's not what I've experienced. After I bought my Leaf, we were curious what my wife's 2016 Mazda CX-5 was worth to them, so I did an appraisal and their offer on it was also surprisingly high. To the point where we've got an alert set up for 2016+ Chevy Volts with them. Now, I'm sure there are a ton of factors that go into the appraisal beyond just teh car itself, like geography and current market conditions, so maybe I just had two cars they really wanted to add to their inventory in my area at the moment. At any rate, it's good to hear other experiences.

JG Pasterjak
JG Pasterjak Production/Art Director
4/9/19 5:27 p.m.
gnichols37 said:

What a load.  This rig is nothing more than a Japanese vertical parking lot with glass sides.  And you, of all folks, should know that buying a vehicle without sitting in it  - and taking it for a test ride - is perhaps the dumbest idea ever for buying a vehicle.

I'll admit that I'm in a somewhat unique position as a journalist in that I get to drive a lot of cars. So a test drive of a specific car isn't as important to me, since it's probably a car I've already driven out of the press fleet. So my priorities become condition of the specific example I'm buying. Knowing I could call off the deal at any time made me feel a lot better about having a limited window to review the particular car I was getting. 

As for the rig, yeah, that's exactly what it is. So? It allows them to pack a buynch of cars onto a much smaller footprint than a traditional dealership. Sounds fairly efficient to me.

Jonwithnoh
Jonwithnoh
4/10/19 4:49 a.m.

You wrote I never really got to test drive this car. I’ve had it three days and have now realized something I hate about it.”

What did you hate?

Ian F
Ian F MegaDork
4/10/19 6:15 a.m.

In reply to Jonwithnoh :

Read the article again...  frown

z31maniac
z31maniac MegaDork
4/10/19 6:25 a.m.

I checked yesterday for fun. Of the one dealership I've talked to, they were spot-on on offering a trade value (which I still think is low considering mileage/condition and the fact the car has been ceramic coated). 

But the cars I was looking at, while seemingly also very clean, very low miles cars........they seemed a bit pricey. 

I think there was on '14 or '15 Miata GT with an asking price of like $21-22k. That still seems a bit on the steep side. But to be fair, it only had like 6k miles on it.

dowroa
dowroa New Reader
4/10/19 6:55 a.m.

The problem with this experience is the fact that the cars are only relatively modern, and to the written point, for the masses. 

As an older buyer, I am looking for specific car types that aren't new, as frankly, new cars are over burdened with with features that are unneeded and over priced.

While this is a good service for those that want appliances, which I think are most people, I don't find this to be a good service for someone wanting even a moderately vintage or specific car.

For example, looking just for `Subaru` and `Manual` returned 13 options. And of those, I know I can do better on price than what was returned without trying too hard. 

 I get this article isn't about this point, but as someone looking for those specialty cars or specific marks in a specific spec... things aren't as rosy as they once were.

 

Thank you for the article.

MyOtherCar
MyOtherCar None
4/10/19 7:09 a.m.

You mentioned that you would be unsure about buying a "specialty vehicle" this way. I went all in and did just that at the beginning of March. I bought a C7 Grand Sport from Carvana that I will be campaigning in SSR this year. (SCCA Autocross)

The front splitter was damaged during delivery, but they are paying to have it replaced. Other than that minor inconvenience, I had the same great experience you did, and got the exact car I wanted at a very competitive price, from the comfort of my desk chair. Their financing rate was better than any I was able to secure from a 3rd party as well.

I would definitely buy from them again. It was the easiest and least stressful car buying experience I've ever had.

CobraSpdRH
CobraSpdRH Reader
4/10/19 8:04 a.m.

This almost seems like a new take on CarMax, with CarMax serving as the "Blockbuster" and Carvana serving as the "RedBox/Netflix" lol

It seems like this could benefit a lot of people and remove a lot of the hassle and stress of car buying. I see their offerings come up in my searches regularly and don't think they are too overpriced in comparison to others. I wonder if you are able to go and test drive vehicles in those displays without actually arranging all the financing?

I see one of the vending machines off I-4 when we head in and out of Orlando, seems neat and good Marketing.

NorseDave
NorseDave Reader
4/10/19 9:26 a.m.

I think if I was going to buy a vehicle from them, I'd definitely want to get it from the vending machine.  I'd just like to see one of those in action (other than on YT).

AngryCorvair
AngryCorvair MegaDork
4/10/19 10:19 a.m.

4 new users since this article was posted, and their only posts are in this thread.   fascinating.

Robbie
Robbie UltimaDork
4/10/19 10:26 a.m.
AngryCorvair said:

4 new users since this article was posted, and their only posts are in this thread.   fascinating.

yeah its like there's a bunch of disgruntled canoes up in here. 

JG Pasterjak
JG Pasterjak Production/Art Director
4/10/19 10:54 a.m.
dowroa said:

The problem with this experience is the fact that the cars are only relatively modern, and to the written point, for the masses. 

As an older buyer, I am looking for specific car types that aren't new, as frankly, new cars are over burdened with with features that are unneeded and over priced.

While this is a good service for those that want appliances, which I think are most people, I don't find this to be a good service for someone wanting even a moderately vintage or specific car.

For example, looking just for `Subaru` and `Manual` returned 13 options. And of those, I know I can do better on price than what was returned without trying too hard. 

 I get this article isn't about this point, but as someone looking for those specialty cars or specific marks in a specific spec... things aren't as rosy as they once were.

 

Thank you for the article.

I think one of the reasons this process can work is that cars—in general—are pretty good these days. I don't mean they're all exciting and soul-stirring, but more that one Camry is pretty much as good and reliable as any other Camry. When I buy a computer, I don't scour the inventory for a particular example. I order one with the specs I want and assume it's going to be as good as any other computer with those specs. Cars are getting very close to those levels of reliability and standardization. 

 

JG Pasterjak
JG Pasterjak Production/Art Director
4/10/19 10:58 a.m.
MyOtherCar said:

You mentioned that you would be unsure about buying a "specialty vehicle" this way. I went all in and did just that at the beginning of March. I bought a C7 Grand Sport from Carvana that I will be campaigning in SSR this year. (SCCA Autocross)

The front splitter was damaged during delivery, but they are paying to have it replaced. Other than that minor inconvenience, I had the same great experience you did, and got the exact car I wanted at a very competitive price, from the comfort of my desk chair. Their financing rate was better than any I was able to secure from a 3rd party as well.

I would definitely buy from them again. It was the easiest and least stressful car buying experience I've ever had.

I think the "not being comfortable buying a specialty car this way" feeling is more me wanting the process of buying a "fun" car to be more engaging and personal. But, yeah, in most cases one GS is going to be as good as the next GS. If I was looking for anything modern like that I'd definitely feel this was a viable option.

Shopping for a '68 Camaro, though? Not sure. I think the Carvana model works great for modern cars which are generally built to a higher standard and level of reliability than at any other time in history. I'd be really interested to see if this model could be adapted for the collector/enthusiast market.

JG Pasterjak
JG Pasterjak Production/Art Director
4/10/19 11:00 a.m.
AngryCorvair said:

4 new users since this article was posted, and their only posts are in this thread.   fascinating.

Yeah this has definitely ruffled some feathers. Not sure I'd have ever believed that people would stan so hard for the traditional car dealership model, but here we are...

Ovid_and_Flem
Ovid_and_Flem SuperDork
4/10/19 11:01 a.m.

In reply to JG Pasterjak :

Carvana?  PFFTTT...Pretty soon only way to buy a car is via Amazon with drone delivery.wink

 

Seriously, in our information driven society/shop from phone/service industry world I think the traditional dealership or even used car entities are on their way out. Or at least waning.

Case in point on a smaller scale in different industry. Even in my little small suburban community I'm amazed at the number of carry out food delivery services (grub hub, et al) in restaurants is proliferating.

alfadriver
alfadriver MegaDork
4/10/19 11:05 a.m.
AngryCorvair said:

4 new users since this article was posted, and their only posts are in this thread.   fascinating.

Without posting Robbie's nautical picture, I thought that was interesting, too.

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