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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:
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.
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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If you’re thinking about selling your car, you need to get a quote from EchoPark Automotive. Why would we insist that thousands of CarEdge Community members consider giving one online car buyer special consideration? Frankly, EchoPark is overpaying for used cars, and writing big checks to sellers in the process. Here’s what our team found using this free CarEdge offer comparison tool.
EchoPark’s Aggressive Bidding: A Windfall for Used Car Sellers
We did some research with CarEdge’s Sell Your Car offer comparison tool, and we found that EchoPark is paying too much for used cars. “Apparently, EchoPark has decided that they want to be the next Carvana,” exclaimed CarEdge Co-Founder Ray Shefska. Ray says that EchoPark may be putting themselves in a position where they’ll be buying high, and selling low.
We got offers from multiple online car buyers, and the difference was shocking.To get a sense of the overall market conditions for online car buyers today, we requested offers for a number of vehicles in different markets in America.
For example, we found a 2016 Ram 1500 for sale by Carvana in Kansas City, and received offers from multiple online buyers, such as Cargurus and CarMax. It turns out that EchoPark is not yet in the Kansas City market (more on that in a moment).
Cargurus made the highest offer, at $23,000. That’s $9,000 less than Carvana’s current asking price of $32,000. That sounds about right, at least in today’s market. But this is where EchoPark’s growing presence in online car buying enters the scene. They’re not in every market, but where they are, they REALLY want to buy your car.
EchoPark Offers Are Through the Roof
Now, let’s take a look at EchoPark’s determination to gain inventory. Over at CarMax, we found a 2021 Toyota RAV4 XLE on sale in Colorado Springs, Colorado for $33,000. CarMax is known as one of the higher-priced car sellers, since they claim to have no-haggle pricing (although you CAN negotiate your deal). For this RAV4 on sale for $33,000, EchoPark would pay $31,862 to buy it! It’s absolutely insane to see an online car buyer offering just $1,200 less than the car’s listing price. That’s yet another sign of a used car market out of whack.
Let’s take a look at one more example. To be sure this wasn’t a Toyota fluke, we picked this 2019 Ford F-150 Lariat. CarMax is asking $43,000, but EchoPark is willing to pay $38,700 to buy it. That’s NOT normal in the used car market. This is like if you went out and bought a $500 TV, and your neighbor offers to buy it off of you days later for $475. Crazy, right?
What does it all mean? This is a recipe for selling at a loss. Ray put it best, “Either EchoPark is desperate for inventory and isn’t worried about losing money on used cars, or this is pure insanity!”
These instant offers from online car buyers are generated by an algorithm that is supposed to offer a compelling price for the seller, but an offer that also makes it easy for the buyer to then sell that vehicle for a profit. Clearly, either there’s something wrong with EchoPark’s algorithm, or they seriously need inventory, and are willing to pay a price for it.
Is EchoPark Automotive Legit?
Yes, EchoPark is a legit business that buys and sells used cars online. EchoPark does not sell new cars. It’s also important to point out that EchoPark Automotive does not buy and sell in all markets. To sell your car to EchoPark, you’ll need to be close to one of their Vehicle Buying Centers. Most locations are in the southern half of the country, from coast to coast. See the latest EchoPark dealership locations here.
When you get an offer to sell your car to EchoPark, your offer is good for 7 days or 500 miles, whichever comes first. If you complete the deal within two days, they throw an extra $250 onto the offer.
When it comes to inventory, EchoPark mostly buys and sells 1-5 year old cars with low mileage. All of EchoPark’s cars come with a 7-Day Money Back Guarantee, similar to Carvana’s 7-day money-back guarantee, and CarMax’s 30-day money-back guarantee, as long as you’ve driven under 1,500 miles.
Compare Offers – No Matter What
Before you sell to EchoPark Automotive, we highly recommend that you compare offers from multiple online car buyers. You’ll get offers from reputable buyers like CarGurus, CarMax and EchoPark in seconds!
Thinking about buying from EchoPark? It’s possible that you’ll find a great deal, but it’s also possible (almost likely) that they’ll be overpricing their used car inventory to try and recoup money from overpaying for inventory.
We want to help you buy confidently. Do your due diligence and guarantee savings with the latest local car market data on CarEdge Car Search. How about premium market insights like Black Book trade-in values, negotiability score and official CarEdge recommendations for every listing? With CarEdge Data, you’ll get that and more.
Have you sold a car to EchoPark? Perhaps you’ve bought a used car from them? How did it go? Let us know in the comments below!
When it comes to buying a new car, getting the best deal is crucial. That’s why our CarEdge Car Coaches have put together a list of the discount you should expect on the 10 best-selling new cars and trucks. Consider this guide step one of the journey towards finding a great deal on a new car. These insights can help you save thousands of dollars on your next vehicle purchase.
Negotiability Insights from CarEdge Car Coaches
Our CarEdge Car Coaches help hundreds of car buyers every week, and they get a good feel for the negotiability of today’s car market in the process. Based on current market conditions, these are the appropriate discounts CarEdge Car Coaches are seeing for the best-selling new cars and trucks. We’re also sharing average listing prices for brand-new 2023 models, as well as any remaining new 2022 inventory.
Make
Model
Starting MSRP
Average Listing Price
Negotiability (Off MSRP)
Ford
F-150
$35,590
$62,353
3-6%
Chevrolet
Silverado
$37,395
$58,140
5-11%
Ram
1500
$39,305
$62,513
3-13%
Tesla
Model Y*
$48,630
$66,506
0%
Toyota
RAV4
$27,975
$36,664
0%
Nissan
Rogue
$28,655
$34,339
0-6%
Honda
CR-V
$32,355
$36,607
0-2%
GMC
Sierra
$38,995
$49,998
0-11%
Toyota
Camry
$27,315
$31,946
0-3%
Tesla
Model 3*
$41,630
$40,607
0%
Looking for negotiability info for other models? With CarEdge Data, you’ll see negotiability scores for every new and used car listing. Want personalized help? Our Car Coaches are ready to help you get the best deal today. Here’s how CarEdge can help.
2023 Ford F-150
The Ford F-150 is the best selling truck in the United States. With a starting MSRP of $35,590 the F-150 may seem like a reasonably priced pickup, however the average advertised price is much higher. Our analysis of 100,000 2023 Ford F-150s listed for sale shows an average advertised price of $62,353.
As Ford inventory builds back up, our Car Coaches have helped customers get between 3-6% off of MSRP.
In the screenshot below for a listing in the Dallas market area, you can see there is 184 days supply of inventory. This is well above the industry norm of 60-90 days. This means Ford dealers should be motivated to discount and make deals.
If you’re in the market for a new truck, our Car Coaches say that the Silverado 1500 is especially negotiable. In recent deals they’ve negotiated for our members, they’ve found that between 3% and 11% can be negotiated off of MSRP.
GM is having a REALLY hard time selling trucks. It’s gotten so bad that the automaker paused production as dealer lots filled with trucks.
There are plenty of Silverado’s that have been sitting on the lot for over 60 days, but market days’ supply depends on what trim you’re looking at. Remaining new 2022 model years are especially negotiable, such as this truck on sale in Chicago.
This Ram 1500 on sale in the Houston area has been on sale for nearly 300 days, and is highly negotiable. You’ll always have better chance to pay under MSRP with outgoing model years.
The 2023 Toyota RAV4 is one of the least negotiable new cars on the market today, but it’s also one of the most popular. With a starting price well under $30,000, it’s low negotiability is offset by an affordable price and decent fuel economy. The RAV4 Hybrid and Plug-In Hybrid (PHEV) are by far the least negotiable, according to CarEdge Car Coach Justise.
In most regional markets, days supply ranges between 20 and 50 days for the RAV4. This Limited AWD in DC is sadly one of the more negotiable listings, as it’s been on the market for over one month. That’s rare for the RAV4.
Due to a higher inventory this month, the Nissan Rogue SV is more negotiable. Other Rogue trim options, such as this Rogue S in California, are quite negotiable too, according to our Car Coaches. There will generally be more negotiability towards the end of the month.
Along with its rival the RAV4, the CR-V is hard to negotiate due to consumer demand exceeding supply. Market Days Supply is FAR below the market norm of 60 days. Some options, such as the all-wheel drive CR-V and CR-V hybrids, have far less supply. We recently took a closer look at inventory in major markets, and the CR-V is hard to find everywhere you look. Be sure to check out new car inventory in major markets across America.
In some markets, there’s over 200 days’ supply for new GMC Sierra trucks. That’s 2.5 times the industry standard for lot inventory. However, as you can see with this new Sierra listing from Texas, market supply depends on the trim you’re wanting. Check local inventory for brand-new 2022 models still on the lot.
The Toyota Camry is one of the best-selling sedans in America due to its reliability and fuel efficiency. However, its popularity also means that there is high demand and limited supply, which can make negotiating a lower price challenging.
From the East Coast to the Midwest and beyond, Market Days Supply for the 2023 Camry is well under the ‘healthy’ average of about 60 days. This 2023 Camry SE in Florida is a new arrival, and will likely be sold within days.
A brand-new Model 3 now starts at just over $40,000 following half a dozen price drops in 2023. But don’t expect to negotiate on a new Model 3 since Tesla sells directly to consumers in states that allow it.
Although you can only buy new Tesla EVs at tesla.com, there are shocking deals on used Tesla models at CarEdge Car Search. See listings near you.
A word of caution: Used Model 3 prices remain VERY inflated as dealers try to recoup losses as new Tesla cars keep getting cheaper.
Get Personalized Car Buying Help and Save Big
By utilizing the data and insights provided by CarEdge Data, you can unlock a wealth of valuable information to inform your car buying decisions. With access to market data, Black Book valuations, and local inventory information, you can confidently negotiate a better deal on your next car purchase.
Ford Motor Co. announced strong Q1 2023 results, posting a net income of $1.8 billion, a significant turnaround from a $3.1 billion loss the previous year. The company’s first-quarter revenue grew by 20%, reaching $41.5 billion, fueled by a 9% increase in vehicle shipments, improved sales mix, and higher net pricing. Adjusted earnings before interest and taxes (EBIT) rose by 45% to $3.4 billion, with Ford Blue, the gasoline-powered business, contributing $2.6 billion.
Ford Model e Shines, But Burns Cash
Ford’s commercial business, Ford Pro, generated $1.36 billion, while the electric vehicle (EV) business, Model e, reported a loss of $722 million. Despite the losses from the EV segment, company officials remain optimistic as they expect losses to increase to $3 billion this year, while Ford Blue is projected to make around $7 billion and Ford Pro, $6 billion. Ford reaffirmed its full-year guidance, targeting an adjusted EBIT of $9 to $11 billion and around $6 billion in adjusted free cash flow.
Ford dropped prices for its all-electric Mustang Mach-E for the second time this year. Tesla’s massive price drops have put pressure on Ford, with the Model Y now being more affordable than the base Mach-E. On the other hand, Ford still dominates electric trucks. With no real competition until the Silverado EV arrives, the F-150 Lightning has seen half a dozen price hikes. It now starts $15,000 higher than it did one year ago.
Earnings Better Than Expected
The company’s Q1 results exceeded Wall Street expectations, with revenue reaching $41.5 billion, up 20% from the previous year, and surpassing the anticipated $36.1 billion. Earnings per share were also higher than expected at $0.63, compared to the $0.41 predicted by analysts. In Q1, Ford’s EV sales increased by 41% year over year to 10,866 units, while hybrid sales dipped by 4% to 27,064 units.
Ford Blue’s strong performance yielded $25.1 billion in revenue, $2.623 billion in EBIT, and a 10.4% EBIT margin. Ford Model e reported $700 million in revenue, an EBIT loss of $722 million, and a -102% EBIT margin. Meanwhile, Ford Pro generated $13.2 billion in revenue, $1.366 billion in EBIT, and a 10.3% EBIT margin.
Ford is optimistic about the future of its EV business, targeting a production run rate of 600,000 units by the end of 2023 and 2 million by 2026. Ford sold nearly 16,000 F-150 Lightning electric trucks in 2022, the first year of sales. The company expects Model e to reach break-even status by year-end and aims for an 8% EBIT margin by late 2026. Ford plans to increase production of various models, including the Ford Transit and E-Transit vans, Mustang Mach-E, F-150 Lightning, Bronco Sport, and Maverick pickup, to meet Q1 demand.
If you’re in the market for a new car and considering a factory order, you may want to think twice before committing. A recent survey of nearly 3,000 car buyers shows that more buyers are canceling their factory orders, with over one-third of orders being canceled in recent months. Greedy dealers who force add-ons and last-minute price hikes are among the reasons why buyers are canceling, leaving many factory-ordered vehicles searching for a new buyer. Let’s take a look at this trend, and how it affects car prices for the rest of us.
We asked the CarEdge YouTube Community what happened to their factory-ordered vehicles in recent months. Here’s what 2,900 respondents had to say about their recent factory orders:
I took delivery = 22%
I canceled my order = 37%
I’m still waiting for my order to arrive = 30%
Other = 11%
That’s right, well over one-third of new car orders are being canceled in recent months. Those factory ordered vehicles are still manufactured, and now they need to find a new buyer.
Among the respondents who selected the “other” option, these were some of the common themes shared:
Dealers insisted on forced add-ons even for factory-orders, so the order was canceled.
Some dealers raised the price upon delivery, after months of waiting.
A better deal was found on the lot.
The hassle of negotiating an order with the dealer drove some to buy used for less.
And our favorite response, “In 1977, I ordered a white Pontiac Firebird with red interior. I’m still waiting for delivery.” Love it.
The car market is still out of whack, and car buyers haven’t forgotten the normalcy of pre-pandemic car buying. “I canceled my factory order because I figured being debt free and driving a clunker bunker that is safe and still runs a much better option in this market.”
Clearly, when automakers take too long to deliver on a promise, the excitement that typically comes along with purchasing a shiny new vehicle often dies. “After waiting almost 2 years for my Bronco, the love affair kind of died. Decided to use the money on a new house.” We don’t blame you!
More Room for Negotiation: Higher Availability on Dealership Lots
See negotiability score, market says supply, suggested offer and more with CarEdge Data.
The high rate of factory order cancellations means there are more cars available on dealership lots, which gives car buyers who are willing to forgo a factory order more room for negotiation. Dealerships will be eager to sell these vehicles. They may be more willing to negotiate on price and add-ons, especially if the cars have been on the lot for an extended period of time. This situation puts car buyers in a better position to secure a good deal, as long as they do their research and are prepare to negotiate.
The Importance of Transparency, Fair Pricing, and Timely Delivery
In conclusion, the new car market is facing a new wave of disruption as thousands of canceled factory-ordered vehicles flood dealership lots nationwide. As more and more car buyers opt for factory orders, dealerships and manufacturers must ensure transparency, fair pricing, and timely delivery to avoid losing customers. With the evolving market conditions, it is crucial to keep up with consumer expectations and deliver quality service to maintain a loyal customer base.
If you’re in the market for a new car, make sure to do your research and leverage the current state of the market to negotiate better deals. Be aware of current factory order wait times. For additional insights on car buying like negotiability data, suggested offer, and local market availability, check out CarEdge Data. We’re here to help car buyers stay in the driver’s seat of their deal. Car buying, the way it should have always been.
CarEdge Insights
