Carvana, the nation’s 10th largest car dealer, has become increasingly popular as an online car dealership. However, despite its growing reputation, there are three key reasons why you should avoid buying your next vehicle from Carvana. Plus, we’ll take a look at the many examples of Carvana selling ‘broken cars’ to customers.
Reason #1: Skyrocketing Profit Per Vehicle
Carvana’s gross profit per vehicle has seen a significant increase, as revealed in their latest earnings report. In Q1 2023, their profits per car sold rose by an astounding 61%. Meanwhile, other online car dealers like CarMax and Vroom haven’t experienced the same success.
While Carvana’s total revenue dropped by 25% to $2.6 billion, their gross profit per unit increased. How did they achieve this? By inflating their car prices. Carvana’s financial success is relying on uninformed buyers to make purchases without realizing they’re being overcharged.
Reason #2: Ridiculously High Prices
Carvana’s prices are just too high. Unfortunately, car buyers should expect to pay a premium for the no-hassle, non-negotiable prices at Carvana. The company obviously tosses a few thousand dollars onto the price tag as an unofficial ‘convenience fee’ of sorts. In some cases, they’re selling used cars at nearly the same price as new ones.
Take a look at this example. Here’s a 2022 Ram 1500 Crew Cab with 12,667 miles on it, and Carvana is asking $45,990. This isn’t 2021, folks. Truck prices have gone down. In fact, our Car Coaches are regularly negotiating over 10% off of MSRP for brand-new trucks.
On CarEdge Car Search, we can see that Carvana has been trying to sell this truck for well over a month, and has already dropped the price by $3,000.
The new 2023 Ram 1500, same trim and all, is within range of the USED Ram truck once current market negotiability is taken into account. And this truck, even if it’s a few thousand dollars more, comes with a full warranty, and is without the mechanical unknowns that come with every used vehicle at Carvana.
Simply put, Carvana’s prices are just too high, but not all buyers will notice. Be sure to check CarEdge Dealer Reviews to see what others have experienced near you.
Reason #3: Serious Quality Issues
Carvana has a concerning track record of selling vehicles with serious quality issues. While not every car they sell has problems, it’s a recurring theme that cannot be ignored. Poorly reconditioned cars, or worse, are all too common in their inventory.
These are just a few of the real, horrific issues that Carvana’s customers have had to deal with:
- Buying a stolen car (unfortunately, multiple times)
- Buying a car that was stolen from Hertz (and refusing to make things right)
- Being sold a car that breaks down immediately
- Failing to sign over the car’s title (leading to criminal charges)
- Check engine lights turning on right as you leave the lot (with mismatched tires)
- Even former employees of Carvana have exposed that Carvana doesn’t always inspect the cars they sell
Remember, if you can’t get an independent pre-purchase inspection (PPI), it’s not recommended to buy from that dealer. With Carvana, this is often the case.
Learn more about why getting a pre-purchase inspection is SO important.
A Word of Caution
In most instances, you’d be better off negotiating a deal on a new car rather than overpaying for the convenience of avoiding negotiations with Carvana. Do your research, compare prices, and make sure to prioritize quality when purchasing your next vehicle. Don’t be lured by the seemingly hassle-free car buying experience Carvana offers, as it could end up costing you more in the long run. Don’t forget to check the latest Carvana reviews at CarEdge Dealer Reviews!
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While the ability to test drive a vehicle remains the major downside to any Carvana purchase, there are many upsides as well. Warranty issues will always be at the forefront of any vehicle purchase. But aftermarket warranties are available. Be sure to check with any of them. Make it a point to do so. It’ll save you a ton on any car repairs. In addition, anything can go wrong with any car at any time. Cars are machines. Machines break. Sometimes the things that break are minor. Others; however, are expensive and major. If you can’t afford the maintenance on a purchased vehicle, don’t buy the vehicle. Carvana cars are no different. You might buy a lemon. You might buy a car that will last forever. It’s all in the history of the car. Get the CarFax Report. Research the VIN!!! These are cheap research tools compared to a hefty repair bill. ALWAYS check under the car for damage. I bought a 2014 Mercedes C300 4Matic with only 32K miles on it, in 2020. I went to Firestone to put tires on it and the dealership called me to let me know there was EXTENSIVE damage to underside of the car. 2 AMG rims @ $975/ea were cracked and they couldn’t take the tire off the rim. Due diligence is your key to buying ANY used car from ANY dealership.