Carvana

[WhenIsItTime]

Anybody following this? Carvana: A Father-Son Accounting Grift For The Ages – Hindenburg Research

With the name Hindenburg, clearly they are looking for future fireballs.

The father/son combo leading Carvana have a questionable past. Can a used car dealer really create enough durable, sustainable cash flow to justify a big valuation?

 

[aja8888]

I read the report. These guys are slime balls.

 

[jazz4cash]

Their demise has been widely anticipated for awhile now. Surprised they made it this far. I don’t think they will pay musch if anything for criminal behavior.

 

[Koolau]

I wonder if they wear the standard used car salesman gear? You know, checkered sports jacket with bow tie (possibly with blinking lights built in.)

 

[WhenIsItTime]

Couple quotes from an article with more moderate view: Analysts at J.P. Morgan sought to assuage investors on Friday about Carvana Co. after the online used-car sales platform drew intense criticism from short-seller Hindenburg Research, saying that their own work on the company “has not suggested any red flags.” Carvana could provide “more disclosure and transparency around gain on sale economics at partners and related FCF moving parts more explicitly,” they said. Ultimately, there’s the opportunity to “buy on weakness,” the J.P. Morgan analysts said.

 

[Surewhitey]

DW almost bought a car from them back in 2019. She did the deal & then I looked at it... They were advertising a Limited edition on what was clearly an XLE model. We quickly nixed the deal. I don't buy used anything without driving / touching it.

 

[mystang52]

That was a fascinating read. And it confirms why I only invest in Index Funds, because I would never know how to look for and find such information if I ever thought to buy an individual stock. My admittedly unsophisticated interpretation is Carvana is a house of cards, combining aspects of Ponzi, Enron and Theranos.

 

[aja8888]

That was a fascinating read. And it confirms why I only invest in Index Funds, because I would never know how to look for and find such information if I ever thought to buy an individual stock. My admittedly unsophisticated interpretation is Carvana is a house of cards, combining aspects of Ponzi, Enron and Theranos.

And they used Drive Time to hide (move) the subprime loans into. That will fall too, the first sign of a recession!

 

[WhenIsItTime]

Carvana gains another $4B in financing through Ally

While the online retailer is facing much criticism and serious allegations from the investment community, Carvana gained more resources from one of its key financing providers. Carvana revealed in a filing with the Securities and Exchange Commission on Monday that it amended the second amended...

www.autoremarketing.com

Seems Ally willing to continue playing.

 

[disneysteve]

DW almost bought a car from them back in 2019. She did the deal & then I looked at it... They were advertising a Limited edition on what was clearly an XLE model. We quickly nixed the deal. I don't buy used anything without driving / touching it.

You don't buy from Carvana "without driving/touching it". You get to see it and drive it first and then get to have it for 7 days before the sale is final. You can return it at any time for any reason during that week.

I love Carmax and Carvana. All 3 of our current cars came from them, 2 from Carmax and 1 from Carvana. I would never buy a car the old way again. I hope whatever issues Carvana is having get straightened out. They're a great company to deal with.

 

[MC Rider]

Pump the stock price up and cash in a few Billion. Yep, crime pays.

 

[aja8888]

Pump the stock price up and cash in a few Billion. Yep, crime pays.

I sold a car to Carvana when my wife passed. The guy who checked it out before I got the check only drove it around the parking lot. I could have had a transmission full of sawdust and the engine loaded with 90 weight gear oil and they would have not known it. Beware!

 

[disneysteve]

I sold a car to Carvana when my wife passed. The guy who checked it out before I got the check only drove it around the parking lot. I could have had a transmission full of sawdust and the engine loaded with 90 weight gear oil and they would have not known it. Beware!

And how was that a problem for you?

When my cousin in Florida died, I sold his car to a Carmax/Carvana sort of place there (Car Drop I think). They didn't do any major inspection. Neither did Carmax with the two cars we sold them. They paid us very competitive prices in all 3 cases. I'm good with that.

When you're buying from them, or anyone, you certainly want to thoroughly check the car and maybe have it checked out by a trusted mechanic, but that's a separate issue than selling them a car. Most of the cars they buy probably go to auction anyway because they don't really sell older cars.

 

[Al18]

Carvana was put on suspension in a few states in the past 2-3 years, for not paying state taxes on the sales, which delayed issuing titles to the new owners. I believe these issues are mostly resolved.

 

[MC Rider]

The one car, OK pickup, I traded in the guy barely looked at it. Spent more time with the computer before telling me what they would give.

Traded in a Ducati and they spent at least half an hour going over it in back. Said, it needs tires and brake pads, and minor cleanup. They probably would not have taken it with 27,000 miles if I did not have a whole pile of receipts for service. It was for sale on their site for a good 6 months.

 

[FindingForward]

You don't buy from Carvana "without driving/touching it". You get to see it and drive it first and then get to have it for 7 days before the sale is final. You can return it at any time for any reason during that week.

I love Carmax and Carvana. All 3 of our current cars came from them, 2 from Carmax and 1 from Carvana. I would never buy a car the old way again. I hope whatever issues Carvana is having get straightened out. They're a great company to deal with.

+1 I bought two cars from carvana in the past 6 yrs. Love their biz model. So much better than any dealer I've ever dealt with. I hate car dealerships. Will only be buying online from now on

 

[Surewhitey]

You don't buy from Carvana "without driving/touching it". You get to see it and drive it first and then get to have it for 7 days before the sale is final. You can return it at any time for any reason during that week.

I love Carmax and Carvana. All 3 of our current cars came from them, 2 from Carmax and 1 from Carvana. I would never buy a car the old way again. I hope whatever issues Carvana is having get straightened out. They're a great company to deal with.

We decided not to take delivery after seeing the problem in our experience. The way it "can" work is you go online, pay for the one you want, they deliver it & you have the option to keep it. I'm sure they know how few are returned. I just cut out the hassle by not taking it due to their inaccurate information. I don't give a mistake that big another chance personally.

I like the idea of the biz, just didn't like our 1 & only experience.

 

[disneysteve]

We decided not to take delivery after seeing the problem in our experience. The way it "can" work is you go online, pay for the one you want, they deliver it & you have the option to keep it. I'm sure they know how few are returned. I just cut out the hassle by not taking it due to their inaccurate information. I don't give a mistake that big another chance personally.

I like the idea of the biz, just didn't like our 1 & only experience.

Even though my daughter had a seamless experience with Carvana, I will say I am more partial to Carmax which is more akin to traditional shopping. You find your car online but then go in person to see it and take a test drive before committing to anything. The best part to me is the fixed price. No stupid games trying to get to the “best” deal.

 

[Koolau]

And how was that a problem for you?

I suppose that's not a problem to someone selling TO Carvana, but it doesn't bode well to whoever ends up with a car that Carvana didn't check out when they bought it. I doubt they check it before they sell it either.

 

[surprising]

I suppose that's not a problem to someone selling TO Carvana, but it doesn't bode well to whoever ends up with a car that Carvana didn't check out when they bought it. I doubt they check it before they sell it either.

Even though I know cars, work on them myself, know how they work and what to look for, many used cars I've bought had some significant issue. One car burned oil and needed at least 1 quart added between oil changes. It also sprang oil leaks that the dealer found and fixed every oil change. Another car has weird and dangerous acceleration lag until it warms up. Of course the owner wanted to meet somewhere halfway between us so that the car was nice and warm when I test drove it. It also had a severe cabin water leak but the owner masked the musty smell with a powerful air freshener.

But I've also had pretty good success - bought an older lexus hybrid for daughter with 145K miles. Had pages and pages of service history, always serviced at lexus dealer. The car has 0 problems, the lexus service guy always comments how good of shape it's in. No leaks, no burning oil, everything works.

It would be interesting data point to know what percentage of cars are sold because the owner knows of some issue or anticipates a costly issue. Because you can't physically look inside an engine or transmission, you have 0 idea how well it was taken care of. Sure, carfax might show consistent oil changes, but does it burn oil? Did it get too low on oil which is catastrophic for engines? Did it ever overheat?

 

[WhenIsItTime]

Stock moved up against a down market thanks to ...

Needham's Chris Pierce and JPMorgan Chase pundit Rajat Gupta both published updates reiterating their equivalents of buy recommendations on the stock.

Going one step further, both RBC Capital and Citigroup upgraded their recommendations to their versions of buy following Carvana stock's beatdown. According to reports, Citigroup's Ronald Josey feels that the company is being effective in expanding its inventory to meet the current demands of the market.

 

[Teacher Terry]

I just sold my car to Carvana and they gave me 1200 more than carmax. The employee told me that they auction the cars off to dealers. I had to wait awhile for my ride to come and it was a huge place.

The auction was taking place in the huge room in the back. My car didn’t have anyone wrong with it but there’s no way for them to know that. They were nice and easy to deal with.

 

[WhenIsItTime]

I had a 2013 Q7 TDI, 120k miles, that went through dieselgate. Car was super clean, accident free, had been extremely reliable until it popped a slew of issues (DEF particulate filter, coolant leak, bad thermostat). Dealer wanted $7k to fix. 3 local diesel shops refused to work on it suggesting the check-engine light that was on may never go off. Likely also needed a timing belt. I decided to replace and that I didn't want to sell privately given the issues and a conscience. Carmax offered $5k. We decided to buy a Subura replacement for our kids to drive. Suby dealer offered us $5.5k for trade-in. Gladly wrapped up the deal. I have no idea what they do with these cars. I hope an unsuspecting buyer doesn't get taken by the dealer.

 

[Koolau]

I had a 2013 Q7 TDI, 120k miles, that went through dieselgate. Car was super clean, accident free, had been extremely reliable until it popped a slew of issues (DEF particulate filter, coolant leak, bad thermostat). Dealer wanted $7k to fix. 3 local diesel shops refused to work on it suggesting the check-engine light that was on may never go off. Likely also needed a timing belt. I decided to replace and that I didn't want to sell privately given the issues and a conscience. Carmax offered $5k. We decided to buy a Subura replacement for our kids to drive. Suby dealer offered us $5.5k for trade-in. Gladly wrapped up the deal. I have no idea what they do with these cars. I hope an unsuspecting buyer doesn't get taken by the dealer.

I think I would have taken the $5K from Carmax and THEN gone shopping for a new car for a cash deal but YMMV.

 

[WhenIsItTime]

I did my negotiation remotely amongst 3 dealers. Arrive at final dealer without mentioning trade-in. Was planning on using new car to drop Audi off at Carmax. They offered to value the trade-in. Only mistake was driving Audi to lunch while they did the paperwork. Son had mentioned transmission was pulsing while travelling 30-40mph in town. Happened on way to restaurant and back. Not sure what that was all about.