Nothing has dominated the headlines this year quite like Carvana. The online car dealer’s massive fortunes quickly faltered in 2022 as it struggled to sell cars, disappointed buyers and even had its license suspended in two U.S. states. We rounded up all our stories about the cursed car dealer in one handy place.
Both the new and used car market is a hot mess right now, and will be for sometime. Just how hot of a mess are we talking? Well, a writer for The Verge managed to sell his 2014 Honda Fit to Carvana sight-unseen for $20,905—$90.20 more than he paid for it brand new off a dealer lot. That’s a mighty caliente market.
Carvana just got a whole lot bigger. The online used car marketplace just bought an entire auction house for $2.2 billion in cash, according to an announcement on the company’s website.
Carvana and its competitors may be seen by some as being better than going into a dealership. With its technology allowing an easy purchasing process, conversation-starting car vending machines, and home delivery it’s all appealing. Our own Mercedes Streeter recently showed exactly that. But according to one Carvana customer I spoke with, the whole experience can sometimes be terrible, and it’s all because of a missed vehicle inspection.
Carvana has a detailed company code outlining principles it claims it will abide by in doing business. But the company doesn’t appear too interested in following their own code lately, as more issues with its services continue coming to light.
Despite a booming used car market, Carvana hasn’t been doing so well lately. The company posted a larger-than-expected loss on first-quarter earnings today, MarketWatch reports, and it’s all attributed to the fact that economic recovery after Covid-19 has left the company flailing in its expectations of higher sales.
This time last year, Carvana was setting records. Supplies of new cars were drying up, and customers were more inclined to stay home, as vaccines were only beginning to emerge and the Delta variant started surging in the U.S. around the middle of 2021. It was the perfect condition for an internet-based used-car startup to thrive.
Carvana, the used car dealer founded a decade ago whose meteoric growth was met with a fair number of problems, said Tuesday that it would lay off 2,500 employees, with executives going unpaid for the rest of 2022.
As adept as Carvana has proven itself at vertically stacking cars, it’s falling short in the transfer-of-ownership portion of its used car buying experience — which some would argue is the most important part of that experience. Complaints from customers in multiple states, usually around failing to provide titles and sometimes even telling customers to drive on a series of expired out-of-state temporary tags, have finally caught up with the company. Its dealer license in Illinois has been suspended, and the state’s Secretary of State Police department say there’s no ETA for the startup to get it back.
Back in mid-May, Illinois revoked Carvana’s license to sell in the state after various complaints from customers that the company was failing to transfer titles to new owners, and instead abusing temporary out-of-state registrations. Before the end of that month, Carvana’s license was reinstated under strict provisions, where it was required to “register titles through Illinois remitters” and couldn’t issue titles or temporary tags itself.
Carvana is back in business in Illinois… for now. According to Automotive News, an Illinois judge has granted the company’s request to halt the Illinois Secretary of State’s latest revocation of its license to see cars in the state.
Look, it’s a tough time to be in the auto business. The chip shortage has led to low inventories and high prices, pushing buyers from new cars into used ones — and pushing those used prices through the roof. In times like these, how could one expect Carvana — a mere purveyor of expensive used cars — to make money?
After months of hassle dealing with a broken car purchased through Carvana, the mega online retail dealer is finally apologizing and reimbursing a Maine woman for the ordeal.
Carvana has lost its privilege to sell cars in Illinois twice in 2022, and while it is currently allowed to do business, one of its highest-ranking officials has been the subject of multiple criminal charges in the state. Paul Breaux, a Carvana vice president and general counsel, has been charged with “27 counts of failure to transfer vehicle titles by a dealership and 50 counts of improper use of titling and registration.”
Carvana, the relatively new CarMax competitor, hasn’t exactly been in the news for good reasons lately. Just a quick search shows it’s bleeding cash, it laid off workers the same day it spend $2.2 billion buying an auction company, it lost its ability to sell cars in Illinois twice, and customers have been filing tons of complaints. So it probably shouldn’t be surprising to hear that Carvana’s in trouble yet again.
Carvana was recently kicked out of Michigan for a slew of reasons, primarily concerning the company’s seeming inability to provide titles in a timely manner. There were also concerns about forgery, destruction of documents, all that fun Sons of Anarchy stuff that only hurts car buyers. So Carvana, in its infinite wisdom, has decided those same buyers are going to help it get its Michigan license back.
Carvana is a relative newcomer to the online car-selling space, but that hasn’t stopped it grabbing headlines for a wild variety of reasons. The company has been bleeding cash all year, laid off thousands of workers and lost its right to sell cars in Illinois, twice.
Earlier this week, Carvana sued the state of Michigan in an attempt to get a temporary restraining order that would prevent the Secretary of State from revoking its dealership license. Today, the Detroit Free Press reports that this request for a TRO was denied.
Carvana just announced it recorded a $508 million net loss in the third quarter of 2022, which ended on September 30th. The online vehicle retailer says it has been dealing with issues like inflation, high used-vehicle prices, and rising interest rates. Those factors have kept potential buyers away.
After announcing it had lost more than half a billion dollars just last week, online car dealer Carvana went on to have an awful couple of days of trading with its share prices plummeting by more than 50 percent. Bloomberg says, meanwhile, that its stock is down 98 percent from its peak, in early 2021.
Carvana is laying off 1,500 workers, which make up about eight percent of its current workforce due to lower demand for used cars, according to Reuters. These latest job cuts come after a crushing “workforce reduction” of 2,500 workers dating back to May of this year.
Warren Buffett, a billionaire and one of the greatest investors of all time, loves to talk about Wall Street analysts, in that he loves to explain how useless they are for anyone seeking guidance on investing. People should come to their own conclusions about a company before buying its stock, Buffett says, or just sock all of your money into an S&P 500 index fund if you’re feeling lazy. Carvana, the used car seller whose stock has been in a freefall for the last year, is a good case in point with regard to Buffett’s opinion of Wall Street analysts. That’s because I don’t think analysts are guessing when it comes to Carvana, but if they were, you probably wouldn’t notice a difference.
Once again, things are not looking good for Carvana. After losing half a billion dollars in Q3, losing its license to sell cars in Michigan, and laying off thousands of employees, creditors appear to believe bankruptcy is a real possibility. According to a report from Bloomberg, Carvana’s largest creditors have already signed a cooperation agreement to avoid a fight over who might get paid.
Oh, Carvana. When will you learn that customers just want the titles to their cars? Maybe they’re getting lost in everything else that’s been going on with the company this year — who knows? But as Atlanta local news WSB-TV reports, many customers either still don’t have the title to their vehicle, or are going through a hassle trying to get it.