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Carvana Sold a Stolen, Damaged Vehicle and Would Rather Just Forget About It
Carvana’s 150 point inspection can’t seem to catch some pretty significant problems, such as STOLEN and damaged vehicles. A Denver man has entered into an arbitration lawsuit with Carvana after the online retailer sold him a vehicle that was stolen from Hertz rental company 7 months prior, several states away.
After completing an online purchase of the car from Carvana, Dennis Atencio says that a repo truck showed up in his driveway to haul his beloved car away. The disgruntled customer was later able to get his car back, but the problems didn’t stop there. In what turned out to be a post-sale, stolen vehicle inspection, the owner found that the vehicle had previously been in an unreported accident and had sustained significant damage that Carvana had not “noticed” during their so-called 150 point inspection. CarEdge always recommends a pre-sale independent inspection for exactly this reason.
Carvana’s contract language makes it so that customers can’t sue the online retailer. However, Dennis is seeking other avenues of legal recourse. To make matters worse for Dennis and other Carvana customers, the point-of-sale is technically out of state in most scenarios, so state regulators rarely have any jurisdiction over Carvana. Consumer protection attorney Matt Osborne told The Denver Channel that buying from Carvana is really like buying in the Wild, Wild West.
A Troubling Trend For Carvana
Dennis’ problems are just the tip of the iceberg. An ongoing class action lawsuit against Carvana alleges many missteps the company has taken when interacting and selling to their customers. The most appalling accusations are the multitude of title and registration issues that prevent Carvana customers from legally driving the vehicles they’ve purchased. Now you can add ‘selling stolen vehicles’ to the pile of problems.
Despite what the annoying mom in Carvana’s Super Bowl ad has to say, proceed with extreme caution if you are considering buying from Carvana or any online vehicle seller.
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Is Now a Good Time to Buy a Car?
We receive a lot of questions from CarEdge Members, and this one comes to us nearly everyday; “Is now a good time to buy a car?” While the past year has been anything but normal (used car prices increased more than 35% in 2021), we may actually be coming up on a period of time where buying a car might make sense. I promise we’ll explain below.
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Let’s discuss if right now is a good time to buy a car. Whether you should buy new or used, or if you should consider leasing. Let’s also keep in mind that the same rule applies as it did last year: if you don’t need to buy a car right now, please don’t. Prices are inflated, and while we are seeing some renewed deal-making, that doesn’t necessarily reflect a “great” value.
Let’s dive in.
Is now a good time to buy a car
Yes. The short answer is “yes.” How can we possibly say that when used car prices have increased 35%+, and new cars are typically selling for MSRP (or more)? Well, the answer is pretty simple, we’re seeing that dealerships are starting to get nervous about the expensive inventory they’ve purchased, and some are ready to get back to deal-making.
This is true on both used and new vehicles.
New vehicles
Take this 2022 Ram 2500 factory order deal for example.
Ryan’s deal is a perfect example of what’s possible in the used car market right now. This is nearly 12% under MSRP. For months now we have seen dealerships selling cars, trucks, and SUVs at well over MSRP, and this is proof that not all deals have to be that way.
New car inventory levels are slowly starting to creep back up, and while dealerships do not have as much inventory as they did pre-pandemic, they are slowly but surely beginning to negotiate again. If you are going to factory order a vehicle, be sure to watch this video to get the best price possible.
Used vehicles
Okay, so that’s new cars. What about used vehicles. Is now a good time to buy a used car? It pains me to say it, but yes. Right now, after a very slow January (car sales were down nearly 10% in the United States), car dealers are getting cold feet while they floorplan very expensive used car inventory.
Interest rates are increasing, and that means that the cost to hold inventory at a dealership is increasing as well. Each day a vehicle sits on a car dealer’s lot they lose money. A few months ago this wasn’t much of a concern because interest rates were very low, and consumer demand was very high.
Now, interest rates are creeping up, and after a slow start to the year, many dealers are getting nervous that they bought their inventory high, and may end up having to sell it low. In January we saw four consecutive weeks of wholesale used car price declines. A few months ago, if a dealer bought a used car for an inflated price they could simply go back to the auction and sell it for even more (used cars were appreciating). That’s not happening right now, and so dealers are more willing then they have been to negotiate and make a deal with a retail customer.
From our sources, we are hearing that dealers are taking up to $2,000 losses on used cars, simply to sell them and try and make the profit up on the “back end” of the car deal (the finance, extended warranty, etc.)
As a savvy CarEdge Member, we encourage you to go to Deal School, and come in prepared with financing and extended warranty quotes so that you can play offense instead of defense when you do go to the F&I Office.
When to buy a car in 2022
Is right now the best time to buy a car in 2022? That’s a great question. While we do think right now is a good time to buy, it may not be the best. Traditionally the end of the year is the best time to buy , that’s when dealerships typically have incentives from their manufacturers to hit volume-based sales objectives. As a result of the chip shortage those objectives have vanished.
With that in mind, the end of the year is no longer the absolute best time to buy a car. In 2022 what will dictate the best or worst time to buy a car will be based on how many vehicles automakers need to take out of production. Last year we lost 11 million vehicles globally as a result of the chip shortage. The expectation for this year is that we’ll lose 1 million.
If there are more new cars produced earlier in the year, and less losses than expected, we could be in for end of year car deals. If that doesn’t happen, then we could be looking at continued high prices.
We expect that used car prices will increase again in the spring with tax returns getting into consumers hands. Right now appears to be a very good time to buy a car in 2022 (again, with the caveat being, only if you need to).
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3 Car Search Websites You Should Actually Use
Car search websites are everywhere. Google search “cars for sale” and you’ll be greeted by tons of advertisements. It makes sense why — car dealers are willing to pay for leads, so in-turn car search engines are willing to pay to get car shoppers to visit their websites.
The issue with traditional car search websites (like AutoTrader, TrueCar, and CarGurus) is that they all prioritize the experience for their customers — the dealers that pay for those ads — and not the consumers (you and me). As a result if you try and use any of the name brand car search sites you’ll quickly realize you’re in for fake prices, spammy phone calls, and “sponsored” listings everywhere.
Today we decided to share the 3 car search websites we like to use to cut through the noise and actually get good information during our car search. No one has sponsored us or paid to be a part of this post.
Let’s dive in.
CarEdge – The best car search website
CarEdge does a few things right when it comes to building a truly consumer friendly car search website. First and foremost, we like that there are:
- No car dealer ads
- No lead-gen forms
- No spam calls
- No fake prices
If you’ve ever searched for a car on one of the traditional car search engines you know how frustrating it is to see one price, fill out the form, get multiple phone calls, and then learn that the “real” price is much higher than what was advertised online. CarEdge solves this problem with their simple and intuitive car search site.
CarEdge has new, used, and certified pre-owned search filters. There are no sponsored listings or ads on the website. This might not sound like a big deal, but once you experience an ad-free car search website you won’t want to go back. The TotalPrice shows you how much you should really expect to pay for the car you are interested in, and the “coaching” from former dealers is useful and helpful.
The negotiation insights and 4 step buying guide are really helpful, especially for car shoppers who want to get the best deal possible.
What we like
- No ads
- No lead-gen forms
- We love the TotalPrice
- The 4 step buying guide is super helpful (especially the email templates)
- Seeing the extended warranty price is helpful
What we don’t like
- We want to be able to save searches
- No “favorite” vehicles option
- It would be great to see what the TotalPrice would be with my trade-in
CarEdge – The best cost of ownership info
Many car buyers focus on performance, safety, tech, or comfort when it comes to their vehicle. CarEdge isn’t trying to change that, but they do want consumers to put a bit more focus on cost of ownership. Remember, cars (usually!) are depreciating assets! This means that after a few years of ownership you could be thousands of dollars underwater in your new ride.
CarEdge wants car buyers to make smarter financial decisions, and to do that they have invested a lot of time and money into building a great car search website with vehicle depreciation and cost of ownership data. CarEdge might not have the “sexiest” website, but their data is unparalleled in the industry. We don’t know of any other car search websites where you can get detailed depreciation, maintenance, and total cost of ownership data on a particular year, make, model, and trim of vehicle FOR FREE!
What we like
- The depreciation calculator is super customizable
- The maintenance and repairs estimates are detailed
- The CarEdge Value Rating is a helpful “at a glance” indicator of a vehicle’s future resale value
What we don’t like
- Ads … They’re EVERYWHERE. We get it, they need to keep the lights on, but the ads are everywhere
- The user interface isn’t that pretty (but it is functional!)
- Sometimes it can feel like information overload
AutoTempest – The best search for used cars
One of the most common questions we get at CarEdge is, “How can I find the exact used car I am looking for, with the right packages, options, etc?” The answer is, it’s really hard! We know a lot of car shoppers are looking for ways to get window stickers on used cars, and while AutoTempest doesn’t have a solution for that (no one really does), they do have a REALLY powerful used car search engine that DEFINITELY helps you zero in on the car you’re looking for.
AutoTempest is a car search aggregator. They pull together listings from multiple sources into one search. Think of AutoTempest like Kayak but for used cars.
Through their partnerships with Cars.com, TrueCar, Carvana, and more, AutoTempest is able to provide the most comprehensive used car search on the internet. Take a look at the initial search page … That’s a lot of options! AutoTempest is seriously the industry leader when it comes to filtering and options for used cars.
What we like
- The most robust used car search website we’ve ever used
- The filters! There are so many filters!
- Listings alerts (you can get emails when your search updates)
What we don’t like
- Ads … They’re not as prevalent as CarEdge, but they sure are there
- Using the site at first can be a little intimidating (information overload)
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Should I Buy a Car Now or Wait until 2022?
Everyday we receive dozens of questions from the CarEdge Community. Recently one question has appeared more and more frequently, “Should I buy a car now or wait until 2022?” Traditionally, the end of the year is the best time to buy a new or used car, and that’s because car dealerships have sales quotas they are trying to attain before the end of the year. If they achieve their sales quotas they get large checks from the manufacturer.
That being said, everything in 2021 has been abnormal, and for the first time since 1896 (the year the first car dealership opened!), automakers aren’t waving hundreds of thousands of dollars in “incentives” in front of their dealers. Instead, this year, unlike any other, end of year quotas aren’t in effect. If a dealership has a quota, it is self-imposed, and not from the manufacturer. As a result, our expectation is that end of year car deals will less attractive than in years past.
With that in mind the question remains, “Should I buy a car now or wait until 2022?” Let’s dive in and answer that!
Is it better to buy a new or used car right now?
Let’s kick things off with a quick discussion on buying new vs. used right now. In today’s market there is a short supply of both new and used vehicles. How tight is supply? Typically there are 2 to 3 million new cars in inventory at any given time. Right now that number is less than 1 million.
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Used car inventories are not doing much better. Because of the lack of new car supply, more and more consumers and businesses (think rental car companies) have been buying up used cars. That, paired with that fact that very few lease cars are coming back to the market (and with good reason, most people are buying out their leases and making a profit), we’re in a situation were used car prices are up more than 50% in 2021 alone!
This is as good a time as ever to remind you that if you don’t need to buy a car right now, you really shouldn’t. Prices on both the new and used car side are astoundingly high. However, in our estimation, new cars are a better value right now than used cars. That because we have seen CarEdge members get deals at MSRP on new cars, which represents a way better value than buying a comparable 2 or 3 year old used car for it’s original MSRP with tens of thousands of miles on it.
Is it better to buy new or used right now? The answer, if you can afford it, is buy new.
Should I buy a new car right now?
If you do decide to buy a new car right now be prepared for the process. Many dealerships do not have inventory on their lot, and that means you’ll be placing a factory order. We have a complete step-by-step guide to factory ordering for FREE that you can use.
Your goal for a new car deal should be MSRP + dealer doc fee + taxes + registration. If a dealership is trying to add on thousands of dollars in extras, you can and should negotiate on them.
The amount of negotiating leverage you have will also depend on the local area supply of vehicles. For example, if you’re looking to buy a new 2022 Subaru Outback, it’s helpful to know that the days supply of inventory right now is 5. Compare that to the days supply of inventory of a new 2021 Ford EcoSport which has a days supply well north of 100. You are much more likely to get a car dealer to negotiate on the EcoSport (which has been discontinued), then you will with a Subaru dealership. It’s simply because they have more supply of the EcoSport than the Outback.
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If you chose to buy a new car in this market, this type of local market analysis can help you come in prepared (and with realistic expectations) for your car deal. You can capture all of this data for free by simply using the car search on caredge.kinsta.cloud.
Should I buy a used car right now?
Used car prices are through the roof. There is no other time in history where we have seen used car prices appreciate as much as they have in 2021.
Should you buy a used car right now, even at the end of the year? No. Not unless you absolutely cannot afford a new car, or cannot afford to wait for a factory order. If you do decide to buy a used car their are a few tactics you can use to determine if you are paying a fair price (relative to the current market conditions).
The first suggestion we have if you are buying a used car is to see what Black Book, Carvana, and Vroom would pay to buy the car if you were selling it to them. To do this you can simply take the VIN of the vehicle you are interested in purchasing, and run it in Black Book, Carvana, and Vroom. See the short video below.
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Once you’ve seen the valuations from Black Book, Carvana, and Vroom, you should have a pretty good sense for if the vehicle is priced fairly. If it is, when you contact the seller be sure to get the out the door price (we encourage you to use our free email templates to do that), and then request a pre-purchase inspection. We have a complete guide to pre-purchase inspections here.
FREE car buying tools & resources
To recap, you should only buy a car right now if you need to, not it if you want to. That being said, if you do buy a car right now, we think new cars represent a better value than used cars. In your quest to find a car dealer who will sell you a new car at MSRP, here are a few resources you should reference:
- Deal School
- CarEdge Member reviewed dealerships
- CarEdge vehicle search (with email templates)
- CarEdge Live chat support
- CarEdge Review my deal forum
We hope this helps you answer the, “Should I buy a car now or wait until 2022” question. CarEdge is here to help you as you navigate one of the strangest and most difficult car buying markets of all time.
Here are comments from CarEdge Community members on the original post that inspired this article.
Used Car Prices for December 2021
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Used car prices have increased more than 50% in 2021. Historically, used cars decrease in value. You know the old saying about buying a new car? “The moment you drive off the lot, it’s worth 20% less.” Well, in today’s crazy market, the moment you drive a new car off the dealer’s lot it might actually be worth 20% more!
The ongoing chip shortage and undersupply of new vehicles is driving used car prices higher. Rental car companies, car dealers, and consumer demand are keeping prices elevated. Until new car inventories rebound to pre-pandemic levels, we’ll see elevated used car pricing.
With more and more consumers not returning their leases, fewer quality used cars are making it to the market. If your lease is coming due, please do not just return it to the dealer, instead, sell it for a profit. You would be leaving money on the table!
Each month we update you on the latest trends in used car prices. Last month’s data can be found here: https://caredge.com/guides/used-car-prices-november-2021/
We also track new car prices and inventory levels. Our hope is that we can help you make an informed decision when it comes time to purchase your next vehicle.
This page will be updated weekly with new data from Black Book, Cox Automotive, and other sources.
If you have specific questions about used car prices please ask them on the CarEdge Community Forum.
To get the Black Book value of your vehicle you can do that here: https://app.CarEdgemember.com/trade-in
Let’s dive in.
Overall Used Car Market Update December 2021
Wholesale used car price increases show no signs of slowing down. The latest data from Manheim and Black Book show wholesale and retail used car prices hitting all-time record highs. Manheim’s used vehicle value index chart paints and eery picture; the data almost looks fake.
Data from Black Book suggests that wholesale used car prices have increased more than 50% since the beginning of this year. The purple line shows 2021 used car price changes. The blue line represents 2019. The differences are stunning.
Wholesale prices are not the only ones going up. Used car retail prices are also hitting all-time highs. Black Book data shows retail used car prices have increased nearly 35% since the beginning of the year. Traditionally the end of the calendar year is when used car prices decrease. That is not the case right now.
One positive indication in the data comes from Cox Automotive. They reported that inventory levels in October were up 20,000 units from September. September ended with 2.28 million used vehicles in inventory, while October ended with 2.30 million. October’s supply was still about 8% lower than 2020.
Cox also estimates that the days supply of used car inventory is at 42. Their data suggests that about 1.65 million used vehicles were sold in October 2021, up 40,000 units from the 1.61 million sold in September. October sales ran about 7% below the same year-ago period.
Both Cox and Black Book show retail used car prices hitting all-time highs. Cox has the average listing price for used vehicles at a new record of $26,971. That’s a $400 increase from September ($26,548).
Week-over-week Black Books has reported another increase in wholesale used car, truck, and SUV prices. The latest weekly increase was .41%. The price increase among trucks, SUVs, and vans was greater than car price increases.
Used car prices will continue to appreciate as long as automakers are struggling to produce enough new vehicles. We track new car inventory levels monthly. The latest new car inventory data for December is not promising.
That being said, many manufactures, including Toyota have signaled that the worst of the chip shortage is behind them. Other manufacturers, such as General Motors, are removing core features from their new vehicles in an effort to ship them to their dealers.
It’s unclear whether we’re “on the other side” of the chip shortage yet, and our expectation is that used car prices will continue to rise until it is more clear that the new car shortage is alleviated.
Used truck, SUV, and van prices 2021
Not all used cars are appreciating equally. Used trucks, SUVs, and especially vans are increasing at rapid (and unbelievable) rates. Look at the data provided by Manheim and Black Book below.
Black Book data shows that just last week used compact van prices increased over 2.5%. That’s UNHEARD of. These are your Ford Transit Connects, Mercedes-Benz Metris, Ram ProMaster City, and Nissan NV200.
Compact and sub-compact crossovers increased nearly 1% week-over-week.
As you can see, the data from Manheim also shows vans leading the way in terms of price increase.
Used car prices 2021
Certain used cars are increasing in value more rapidly than others. For example near luxury cars (think your Genesis and Acuras) are increasing rapidly week-over-week. The same goes for prestige luxury cars like your BMWs, Mercedes-Benz, and Audis.
We recently published data on which brands have seen their new and used prices increase the most (and least) year-over-year: https://caredge.com/guides/which-brands-prices-have-increased-the-most-least-in-2021/
What’s going on at the used car auction?
Black Book provides “sales rate” data from the wholesale used car auctions.
Directly from Black Book:
The weekly estimated average sales rate has remained stable at the 70% mark for the 2nd week in a row. This time last year, the estimated average weekly sales rate was around 51%, so while floor prices continue to rise, buyers continue to purchase vehicles at auction at a higher rate.
Typically the holiday season signals an increase in newer used vehicles. This is because of lease returns and rental vehicles coming to the auction. This year that is not happening to previously expected levels. While there was a slight uptick in newer model year vehicles rolling across the lane this past week, a significant portion of vehicles are arriving damaged.
Franchise car dealers are grounding lease returns and not sending them to auction. Fierce competition at the auctions can be mostly attributed to large independent dealerships and rental companies. Because of inventory scarcity, we have seen bidding wars across the country. Wholesale values and floors continue to increase and give no indication of slowing down.
We’ve heard stories from our community of similar experiences at the auction, and it appears that rougher and rougher vehicles are crossing the auction block at this time.
Are any used cars depreciating?
No. From all of the data we’ve been able to get our hands on, it looks like there isn’t a single style of vehicle or particular nameplate that is not increasing in value right now. We know that certain vehicles are appreciating less than others, however all vehicles are increasing in value right now.
Luxury vehicles, and in particular luxury SUVs are appreciating much less rapidly than other vehicles. Take for example the Mercedes-Benz GLC, it has only appreciated 8% year over year. This further reinforces the theory for why the Mirage has increased in value nearly 50%; consumers need affordable and attainable used cars, not expensive and luxurious ones.
How long will used car prices keep going up?
Although our crystal ball has been notoriously cloudy here at CarEdge, we feel confident in saying that used car prices will continue to increase well into 2022. Even when automakers get production back up to speed for new vehicles, there will be lingering effects from this period of time where they have not been able to produce at expected capacity.
Also, the price to produce new vehicles has gone up. As a result of the chip shortage (and other supply chain issues), we expect MSRP on new vehicles to be considerably higher than before. Why? Because the manufacturers costs are increasing, and they will likely pass that along to the consumer. As a result, the demand for used cars will continue to be high because used cars (especially vehicles like the Mitsubishi Mirage) will be the only “attainable” price point vehicles for many people.
For these reasons, we think week over week, and month over month used car price increases will continue for at least another 12 months.
When should I sell my used car?
If used car prices are likely going to continue to appreciate, it would make sense to hold onto your used vehicle and wait to sell it. That being said, our best recommendation is to track the value of your used vehicle weekly. To do this we encourage you to use the “value my vehicle” section of your CarEdge account. You should also get quotes from Carvana, Vroom, CarMax, etc.
There may be small fluctuations in price from week to week, but we expect the price of your vehicle to gradually increase overtime. The indicator for when to sell will be when you see week over week declines in the value of your vehicle.
If You’re Buying a Used Car …
Our recommendation has been, and will continue to be to stop buying cars! We’re so passionate about this that we even made a website: http://stopbuyingcars.com/
However, if you need to buy a used car right now, here’s what you need to remember.
How to value if it’s a fair deal
The only way to know if you’re getting a fair deal is to get the out-the-door price from the seller and then compare that to the vehicle’s value. To get the out-the-door price follow this guide:
To know if the vehicle’s price is fair, we encourage you to run the VIN through the CarEdge vehicle valuation page and to also get a quote from Carvana to see what they would pay to buy the car right now. If the Carvana quote is close to what you are paying for the vehicle, then it’s likely a pretty fair deal.
Get a pre-purchase inspection
In today’s market, with “rougher” used cars for sale it is critically important that you get a pre-purchase inspection done on the vehicle you are thinking of purchasing. We have heard too many horror stories of people buying used cars “as-is” and then getting stuck with a piece of junk. Avoid that, and get a PPI!
Consider an extended warranty from CarEdge
Last but not least, consider getting an extended warranty on your used vehicle. CarEdge partnered with AUL Corporation to sell extended warranties with a flat markup, transparent pricing, and free consultations with an Auto Advocate. If we can help you protect your use car, we want to. More on that here: https://caredge.com/extended-warranty/ and request a free quote here: https://app.CarEdgemember.com/service-contract
