Carvana to lay off 2,500; executives to forgo salaries for rest of year
Carvana is laying off 12 percent of its work force and executives won't take salaries for the rest of the year.
www.autonews.com
Carvana Layoffs
- Thread starter The Critic
- Start date
www.autonews.com
Even bigger changes over there:
Vroom appoints new CEO, signals intent to 'realign' business
Online used-vehicle retailer Vroom said that its COO, Tom Shortt, 53, is joining its board and succeeding Paul Hennessy as the company's CEO.
www.autonews.com
Who knew that paying too much for cars without a proper inspection, then trying to sell the same car above market pricing, would be a poor business model? I've also heard that Carvana sends more cars than any other dealer through auctions to try to recoup some cost. Not a great way to operate if sustainment is the goal.
I didn't realize carvana was that big if 2500 employees is only 12% of their workforce.
The problem is the severe supply side shortage. The used vehicle shortage is not getting better, it is getting worse, and now there is pushback on the prices. Furthermore, lending institutions are now balking at financing such large amounts on such old high mileage vehicles, and customers are balking at having to come up with high down payments and paying higher interest rates for longer terms. It is a perfect storm for the used vehicle industry.
There is NO used vehicle shortage where I live.
Want a used truck? This dealer has over 300 in stock: https://www.chillicothetruck.com/
Used vehciles of all sorts? This Columbus, Oh dealer has over 600:
www.autoboutiqueohio.com
Want a used vehicle? Germain Kia of Columbus has over 200:
www.germainkiaofcolumbus.com
Available Used vehicles are all over the place in Central Ohio.
Want a used truck? This dealer has over 300 in stock: https://www.chillicothetruck.com/
Used vehciles of all sorts? This Columbus, Oh dealer has over 600:
Find cars for sale in Columbus OH
View Auto Boutique's cars for sale in Columbus OH. We have a great selection of new and used cars.
www.autoboutiqueohio.com
Want a used vehicle? Germain Kia of Columbus has over 200:
Used Kia Sales near Galloway, OH | Kia Dealership near Me
Buy a used Kia at our Kia dealership near Galloway, OH, to upgrade your drives. We have pre-owned Kia Soul models, as well as other used cars for sale in Ohio.
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Available Used vehicles are all over the place in Central Ohio.
It's my understanding Carvana never had a lack of inventory-but they did pay top dollar for the one's they bought from the public. The first of the year-used car prices have actually DROPPED-but this month have been going up-again.
quote-
Used car prices trends for 2022 have been interesting. In 2021, unlike any other time in history, used car prices increased. What used to be a depreciating hunk of metal, was an appreciating asset that nearly had a better rate of return than Bitcoin. With used car prices increasing at rapid rates, it’s never been more important to track the value of your car.
So far in 2022, used car prices have fallen. However that trend is coming to an end. As of May 2022, used car prices have begun appreciating again. During the first quarter of 2022 used car prices dropped nearly 5% on the wholesale markets. Now they are rising again.
There is more than one story online, with Carvana paying more for a used car than they cost when new, then listing it for less than then paid.
As I said-it takes great business acumen to do that-because as a trend prices haven't fallen.
If Carvana and Vroom slow down their crazy buying maybe the used car market will start to soften in a back handed way.
AZjeff
$50 Site Donor 2023
What about the price? There are more used vehicles on the lots here than a year ago but with the INSANE prices there might as well be none. And they won't deal.
They lose $$$ on every sale but they make it up on volume!
GON
$100 Site Donor 2023
About nine months ago, I read an article that Carvana's main business WAS NOT SELLING CARS, but CARVANA's main business was the bond business. CARVANA packages auto loans and sells the packaged loans in a form of bonds. Furthermore, Carvana serviced many of the loans they packaged into bonds. Carvana could be profitable if every vehicle they sold was at a loss, as long as they had financed the loan. The real money to be made was not in the sales price of the car, but in the financing of the car. Carvana was able to bypass the financial institutions in its business model, and double dip by servicing the loan for the bond holders.
Not sure Carvana's model is working for them, but Ford and Chrysler (when it was Chrysler) finance companies were often the most profitable part of their holding companies' segments.
Not sure Carvana's model is working for them, but Ford and Chrysler (when it was Chrysler) finance companies were often the most profitable part of their holding companies' segments.
Interesting how that doesn't work.
In the late '70's, there was a Colonial Ford dealership in Salt Lake City. They had a beautiful new facility right in the heart of SLC. Huge inventory.
They advertised that they would beat the price on any new Ford. Their business model was that what they lost on profit for individual sales, they would make up in volume, by being the number 1 in sales for the region. And they sold a LOT of cars. But they still went bankrupt.
They were a huge example to other new car dealerships in the area, for many, many years. I suspect they may still be discussed in training and sales meetings to this day.
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