Who gives you the most money for your car?

Author: Ingrid

Mar. 07, 2024

Machinery

Used car e-commerce company based in Arizona, United States

Not to be confused with Carvanha

Carvana Co. is an online used car retailer based in Tempe, Arizona.[2] The company was the fastest growing online used car dealer in the United States and is known for its multi-story glass tower car vending machines.[3][4][5] Carvana was named to the 2021 Fortune 500 list, one of the youngest companies to be added to the list.[6]

Carvana's employee resource group, BEACON (Black Employees and Allies at Carvana), focuses on increasing connections and being champions of change and support its black employees, customers and community.[7]

History

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Ernest Garcia III, CEO and co-founder of Carvana

Carvana was founded by Ernest Garcia III, Ryan Keeton and Ben Huston in 2012. The company's initial funding round came from the used car retailer and finance company DriveTime.[8] A year later Carvana opened its first iteration of a car vending machine. In 2015, a fully automated, commemorative coin-operated version of the signature car vending machine opened in Nashville, Tennessee.[4] Carvana currently operates over 30 vehicle vending machines in the US.[9]

In April 2017, the company went public and began trading on the New York Stock Exchange under the symbol CVNA.[10] Also in the same year Carvana acquired rival automotive startup Carlypso to enhance vehicle data and analytical tools[11] and in this same year Carvana's co-founders were included in Fortune’s 40 Under 40 list in 2017.[12] The following year Carvana spent $22 million to acquire Mark Cuban-backed Car360 for its smartphone technology for taking vehicle photos with 3D computer vision, machine learning, and augmented reality.[13][14] In 2022, Carvana acquired ADESA, the nation’s second-largest wholesale auto auction chain, for $2.2 billion to increase its real estate footprint. [15]

In response to the COVID-19 pandemic, Carvana introduced touchless delivery and pick-up in March 2020.[16] In Q2 for that year, the company reported a 25% increase in vehicle sales, as a result of physical dealership sellers being closed as a consequence of the COVID-19 pandemic. Carvana had a gross revenue of $1.12 billion, up 13% for April–June 2020.[17] Throughout that year Carvana sold 244,111 vehicles and posted annual revenue of $5.587 billion, making it the second largest online used-car retailer in the U.S.[18] As of November 2023, Carvana's as-soon-as-next-day delivery was available in 300+ markets nationwide.[19] During the COVID-19 pandemic, Carvana's market value surged when consumers turned to vehicle online marketplaces.[20]

In August 2023, Carvana introduced same-day delivery for customers purchasing or selling a vehicle,[21] the service is currently available in Alabama,[22] Arizona, Indiana, North Carolina, Georgia, Dallas-Fort Worth, and Central Florida. [23]

In May 2022, The Wall Street Journal reported that Carvana had to lay off 12% of its staff (2,500 employees)[24] after falling short of growth expectations. Carvana stock was 90% off its 52-week stock price as interest in the company collapsed.[20] On November 4, 2022, Carvana's stock price dropped around 40% following its poor third-quarter financial results. The total number of used vehicles sold declined by 8% to 102,570. Analysts blamed rising borrowing costs and elevated used-car prices.[25][26]

In February 2024, CNBC reported Carvana had spent the last 18 months restructuring its operations and debt given concerns about potential bankruptcy. As part of the shift from growth to cost cutting, the company lowered its headcount by more than 4,000 people, removed $1.1 billion of annualized expenses out of operations; released a new proprietary software called Carli that would allow for end-to-end processing of vehicle reconditioning and other tasks that were previously manual; built specific tools for inbound and outbound logistics activities like mapping, route optimization, and driver schedule management; and introducing new tools that employed generative artificial intelligence for some tasks.[27]

Regulatory history

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Vehicles not picked up at the vending machine are delivered by a flatbed truck Outside of the Atlanta car vending machine

In August 2021, Carvana's Raleigh vending machine was issued a temporary ban by regulators in North Carolina due to its failure to properly conduct inspections and provide vehicle titles to customers as required by state law. Carvana continued business in Raleigh from other sites in the area and the vending machine was allowed to resume business in January 2022.[28]

For two weeks from May 10, 2022 through May 25, 2022, Illinois suspended Carvana's business license due to customer complaints, effectively banning the company from conducting business in the state. The Office of the Secretary of State of Illinois stated that the company had failed to provide titles to buyers for the vehicles they had purchased within 20 days, as required by Illinois law, and in some cases had illegally issued temporary registrations from other states to customers in Illinois.[29] The state lifted the suspension on May 26, 2022, after imposing strict guidelines on the company's operations. On July 18, 2022, the Secretary of State's office announced that Carvana's suspension was reimposed after finding that company continued to engage in illegal conduct.[30][31] Paul Breaux, Vice President for Carvana, was charged with multiple misdemeanor and petty offenses due to the Illinois issues.[32] On July 29, 2022, Carvana won a temporary injunction against Illinois to resume business in the state and the Illinois Secretary of State was banned from 'suspending or revoking' the company’s certificates of authority and dealer plates.[33]

Similar issues have been faced in other states, including Pennsylvania, where a class action lawsuit has been filed alleging that the company violated the state's Unfair and Deceptive Trade Practices Act by failing to properly transfer ownership to buyers, a matter in which Carvana denies any liability.[28][34]

On October 7, 2022,[35] the Michigan Secretary of State suspended the license for the Carvana dealership in Novi for "immediate harm to the public" due to violations of the Michigan Vehicle Code.[36] Before the October 2022 suspension, the state had conducted an investigation in February 2021 that led to Carvana agreeing to be placed under probation in May 2021 and admitting violations. Additional violations occurred during the probation period, and Carvana agreed to a six-month extension of the probation period in February 2022.[36][37] Despite the suspension, the Novi location continued to operate the following week.[35]

To advance the digital car buying experience and protect vehicle home deliveries, Carvana has championed legislation in Illinois, Iowa and Oregon. [38] [39] [40]

Carvana is a sponsor of the USL Championship's Phoenix Rising Football Club since 2018,[41] and 7-time NASCAR Cup Series championship driver Jimmie Johnson since 2021.[42]

In December 2023, Carvana announced its kit sponsorship for the Chicago Fire FC Franchise of Major League Soccer (MLS). [43]

References

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You want to sell your car, but you’re not going to let go of it easily. It’s always worth the effort to sell your car for the most money possible. Once you’ve made the decision to sell, another question comes to mind: “where should I sell my car to get the most money?”

If your goal is to get the most money when selling your car, then be prepared to do a bit of work. If you’re more interested in convenience, then have no fear, there are plenty of people out there who want to make it easy to buy your car from you.

Get the most when you sell your car.

Compare and choose multiple offers in minutes:

Let’s run through the three different categories of car buyers, get into the specifics of what work you will need to do to sell your car to each of them, and cover the pros and cons of your varied options. Let’s dive in!

The Middle Ground: Sell to a Car Dealership

There is nothing wrong with selling your car to a local dealership. Will you get the most money possible? No. Will you have the most convenient experience possible? Probably not. Will you get the worst possible price for your car? Definitely not. Will it be the least convenient experience for you? Most likely not.

Selling your car to a local dealership is the ultimate middle ground of car sales. It’s an option, it’ll always be there, and it isn’t great, but it isn’t bad either.

Thinking of buying a used car? You might enjoy this guide: Buying a Car on Craigslist? Here Are 4 Things You Need to Do First.

What work is involved in selling your car to a local dealership? Not much. Don’t spend hundreds of dollars getting the vehicle cleaned, detailed, or looking “showroom ready.” The used car manager that appraises your vehicle won’t be swayed by how good the car looks, and they’ll still be thinking about the reconditioning work they’ll need to do to make the vehicle “merchandisable” (sales ready).

Selling to your local car dealer is convenient in this sense. Simply call them, make an appointment to get your vehicle appraised, and have the necessary documentation with you to complete the transaction (more on that below).

Understand that the offer you get from your local dealer will most likely not be top dollar for your car. Quite frankly, it could be the lowest offer you get. Local dealerships typically never offer what the national used car dealers do (more on them next), and although there is less work involved, offers from local dealers are typically much less than what you would get if you sold your vehicle to a private party (stay tuned).

If you’re still asking yourself, “Should I sell my car to a local dealer?” I’d caution that you shouldn’t. I think you’ll find one of the other two options more attractive for obvious reasons.

The Easy Option: Sell to Carvana, Vroom, or CarMax

National used car dealers have invested millions of dollars to create “seamless” and “technology-driven” ways to buy your car. CarMax pioneered the marketing of “we’d like to buy your car, please sell it to us” many years ago, and since then, upstart companies like Carvana and Vroom have doubled-down on purchasing used cars directly from consumers.

What work is involved in selling your car to one of these national retailers? Not much. Similarly to when you sell your car to a local dealership, you shouldn’t invest time or money in cleaning up your vehicle. Carvana, CarMax, and Vroom are all prepared to recondition your vehicle, and a detail will not change the appraisal value.

What are the pros and cons of selling to a Carvana, CarMax, or Vroom? There are plenty. To start with, the best “pro” on the list is the offer price. Carvana and Vroom are notorious for offering very competitive prices to buy used vehicles. We recently sat down with Nicholas Hinrichsen, the former Senior Director of Sell to Carvana, on the Auto Insider podcast. It was fascinating to learn how Carvana determines pricing for their used car purchases.

Carvana and Vroom will also both come to you to purchase your car. Instead of driving to your local dealership, or to a physical CarMax storefront, Carvana and Vroom will send a flatbed truck to you and take delivery of your vehicle right there.

And finally, on the list of “pros” is the fact that all three major players offer seamless, simple, and intuitive online platforms you can use to sell your car directly to them.

What are the cons you may be asking? There aren’t many. The only downside to selling your car to Carvana, CarMax, or Vroom is that there is a chance you may not get top dollar for your vehicle as compared to selling it to a private party. That being said, the amount of time saved by selling to one of these big three national brands can more than make up for the price difference.

The Most Money: Sell to a Private Party

If you’re truly invested in getting the highest offer on your vehicle, then you should strongly consider selling your car to a private party. Selling your car to another individual generally requires a lot more work than any of the other options we’ve already discussed.

When selling to a local car dealer or a national used car brand, you don’t need to worry about cleaning up or detailing your vehicle. That couldn’t be further from the truth when it comes to selling your car to another individual. You want your car to be looking immaculate!

If you’re thinking about buying or selling your car, you might enjoy this article if you haven’t read it already: The Car Buyer’s Glossary of Terms, Lingo, and Jargon

If you can get your car looking great, take professional photos, and get it listed on many different websites, odds are you’ll get top dollar for your vehicle. The cons however consist of investing your time into preparing the vehicle, coordinating appointments with strangers, and letting someone you don’t know test drive your car.

If you can look past these cons, then selling your car to a private party may make sense for you.

What you need with you to sell your car

No matter who you sell your car to, there are a few items you’ll want to have handy to facilitate the transaction:

  • Some sort of photo ID, usually a driver’s license
  • The vehicle title, proving vehicle ownership
  • Vehicle registration, showing vehicle ownership
  • 10 day loan payoff, which is the amount you still owe on the car (if you have a loan)
  • Both sets of keys
  • Any service and maintenance records

As a final note, remember to take your belongings out of the vehicle before you sell it. There’s nothing worse than seeing your EZ-Pass get billed six months after you sold your car.

Who gives you the most money for your car?

3 Ways to Sell Your Car For the Most Money

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