TrueCar values on used car has tanked. But sellers still want their vehicles sold at 20-30% premium to the refreshed TrueCar value. I’m patiently waiting for sellers to get acclimated with new values of their used vehicles.
With this information, I would prefer to wait until early to mid 2023 but I am need of transportation asap. Would it be wise to purchase a beater for now? WWYD?
After looking at just a few of the listings on Carvana I don’t think they learning anything. Their prices are high. They paid too much at wholesale and they want too much.
Dad you don't know you're talking about I am one of their auto mechanics and we go over them and fix any issues that we can catch unless it's within that year and mileage standards
I have no doubt that Carvana will be going under, its just a matter of the timing. The profitability actually isn't that important anymore, they are just in survival mode… the only thing that matters is cash flow for them at this point. At the end of Q3 they had less than $500M in cash (I can't imagine a lender helping them out at this point) and their SG&A burn rate is $600k. They will continue the path they have been on over the last two quarters which is reducing inventory on hand to keep operations running.
I think they can reasonably drag this on into fall of next year. They will sell down their inventory (and not replace a lot of it) and they will sell a significant amount of their real estate to coincide with it. Remember, their real estate holdings are worth about what their vehicle inventory is and as they reduce their locations they can reduce their OPEX. They can drag this out until Fall 2023 at the very least, at which point the stock is worth less than a dollar and bankruptcy or liquidation would seem inevitable. At the end of the day, they will do whatever is best for the Garcia's… and I think that will be to drag this thing out at least through the summer sales season. Just my personal opinion.
The prices will go to below prepandamic level next spring. Don't buy a car unless you a 100% sure that ur job a secure! We are going into a major recession
We have 250 millions (give or take) in the us? Even if thy have 250k cars, that is 1/000 of the total number of cars. That is not going to put a dent in any market …. Am I wrong here? These cars would be absorbed in the market without any problems at a very little discount.
Carvana owns less than 0.1 percent of the used vehicles in the USA. Their "collapse" would have almost no effect on used vehicle prices. Used vehicle pricing has already come down due to normal market forces. Carvana is a terrible investment. Carvana is not an industry mover at any level.
I don’t think used car prices will go back to pre-pandemic levels because new car inventory is not really rising significantly, there are almost no new cheaper entry level cars being made anymore and Carmax and Autonation have an interest in keeping used car prices high. If Carvana needs to “liquidate” they won’t just dump 100,000 cars on Craigslist in one week. They likely would need to make a deal with national franchises like Carmax and Autonation to buy their cars slowly and meter out inventory to keep prices up. I don’t think that we will ever go back to a pre-pandemic environment unless there is a seismic event like a serious recession and thousands lose their jobs and income. Love your channel, you guys are great!
As to how fast they are going down, you need to look at their balance sheet to see the rate of debt increasing and how little the cash on hand and receivables have increased. They have almost $10B in debt, only $1B in cash $800M in receivables and less than $3B in inventory. Their assets are $10.5B but may be hard to sell and still continue operations. Soon they will not be able to make the debt payments without some liquidation of assets. After that it is usually a decline and fight to survive until the eventual liquidation to the debtors. Sometimes it takes years to decades depending how strategic they can be. Sears took about 40 years to go belly up, Toys R Us was no where near as long. With this debt I say they are not going to be a long survivor.
And, how come I am still seeing Carvana commercial advertising including their coin=operated vending machines? Seems like pissing good money after bad.
Correct it will and it is by design. It’s all part of there buisness plan. They are willing to take the loss. Just like Uber did to grow the brand. They will be known as the ones that offer the most and the ones with lowest prices after all settles they will grow
I love you guys. I’ve actually paid $100 for your advice. But actually it’s more than that. It’s all definite genie in a bottle. And I’ve been looking for a Honda clarity touring and they have dropped in price in the last five months about $3000. And with this video, I’m going to wait a little longer. Or maybe buy some. Just wanted to say you guys are awesome.
Was doing some shopping on a classified site and overall used car prices seem more reasonable than they had been. Carvana prices were much higher in comparison. They aren’t doing themselves any favors.
Maybe I can finally get a decent used Tacoma when this happens? I heard Carvana cares were pretty low quality though.
I'm not the only one waiting on the carvana fire sale.
The liquidation of auto-industry leader Carvana will feel like the housing market collapse of 2009. Right after the bubble comes the bust.
TrueCar values on used car has tanked. But sellers still want their vehicles sold at 20-30% premium to the refreshed TrueCar value. I’m patiently waiting for sellers to get acclimated with new values of their used vehicles.
With this information, I would prefer to wait until early to mid 2023 but I am need of transportation asap. Would it be wise to purchase a beater for now? WWYD?
I love these guys… but it's literally been doom and gloom carvana carvana carvana for three weeks.
I hope this is true from a consumer standpoint! I’m tired of shelling out my hard earned money for these overinflated car prices!
I wonder if the automotive sales industry will even learn anything from the liquidation of Carvana?
After looking at just a few of the listings on Carvana I don’t think they learning anything. Their prices are high. They paid too much at wholesale and they want too much.
Love Carvana. Their absurd purchase offer was perfect for negotiating a trade-in value with a real dealer.
Carvana is too big to collapse they are in a hole for sure but they are too big to collapse
Dad you don't know you're talking about I am one of their auto mechanics and we go over them and fix any issues that we can catch unless it's within that year and mileage standards
Carvana reduced 1000 from a car I was looking at worth 16 000. It was the second reduction and the first was 500.
Does carvana have in house financing? If they do maybe they're making some good money there.
So…..are Carvana cars on sale? Are they still selling cars?
I have no doubt that Carvana will be going under, its just a matter of the timing. The profitability actually isn't that important anymore, they are just in survival mode… the only thing that matters is cash flow for them at this point. At the end of Q3 they had less than $500M in cash (I can't imagine a lender helping them out at this point) and their SG&A burn rate is $600k. They will continue the path they have been on over the last two quarters which is reducing inventory on hand to keep operations running.
I think they can reasonably drag this on into fall of next year. They will sell down their inventory (and not replace a lot of it) and they will sell a significant amount of their real estate to coincide with it. Remember, their real estate holdings are worth about what their vehicle inventory is and as they reduce their locations they can reduce their OPEX. They can drag this out until Fall 2023 at the very least, at which point the stock is worth less than a dollar and bankruptcy or liquidation would seem inevitable. At the end of the day, they will do whatever is best for the Garcia's… and I think that will be to drag this thing out at least through the summer sales season. Just my personal opinion.
Big if
so i should unload my low mileage 2016 wrangler to carmax asap!!
The prices will go to below prepandamic level next spring. Don't buy a car unless you a 100% sure that ur job a secure! We are going into a major recession
Someone will buy the stock up and will sit on it to keep the prices high…
We have 250 millions (give or take) in the us? Even if thy have 250k cars, that is 1/000 of the total number of cars. That is not going to put a dent in any market …. Am I wrong here? These cars would be absorbed in the market without any problems at a very little discount.
I just sold them my car last Friday and they were offering literally $3k-$4.5k more than other dealers 😂 😅
I love that you’re wearing a shirt from the car mom! What an awesome collab, I heard them talk about you in one of their podcasts. Love the videos!
Rubbing palms together 😈😈😈
Carvana owns less than 0.1 percent of the used vehicles in the USA. Their "collapse" would have almost no effect on used vehicle prices. Used vehicle pricing has already come down due to normal market forces. Carvana is a terrible investment. Carvana is not an industry mover at any level.
Not going to happen. No collapse coming. If you want to talk to a true insider give me a shout.
I don’t think used car prices will go back to pre-pandemic levels because new car inventory is not really rising significantly, there are almost no new cheaper entry level cars being made anymore and Carmax and Autonation have an interest in keeping used car prices high. If Carvana needs to “liquidate” they won’t just dump 100,000 cars on Craigslist in one week. They likely would need to make a deal with national franchises like Carmax and Autonation to buy their cars slowly and meter out inventory to keep prices up. I don’t think that we will ever go back to a pre-pandemic environment unless there is a seismic event like a serious recession and thousands lose their jobs and income. Love your channel, you guys are great!
As to how fast they are going down, you need to look at their balance sheet to see the rate of debt increasing and how little the cash on hand and receivables have increased. They have almost $10B in debt, only $1B in cash $800M in receivables and less than $3B in inventory. Their assets are $10.5B but may be hard to sell and still continue operations. Soon they will not be able to make the debt payments without some liquidation of assets. After that it is usually a decline and fight to survive until the eventual liquidation to the debtors. Sometimes it takes years to decades depending how strategic they can be. Sears took about 40 years to go belly up, Toys R Us was no where near as long. With this debt I say they are not going to be a long survivor.
So no more Drive Time too right?? I hope so I hate those fuckers too
They definitely don't know the numbers and the market.. 50,000(carvana inventory)/40,000,0000(annual car sales in USA).
still waiting on prices to come down…tick tock…
No one is lowering prices anytime soon. Give it 2 more yrs
No wont see pre pandemic prices in any industry ever again
And, how come I am still seeing Carvana commercial advertising including their coin=operated vending machines? Seems like pissing good money after bad.
Correct it will and it is by design. It’s all part of there buisness plan. They are willing to take the loss. Just like Uber did to grow the brand. They will be known as the ones that offer the most and the ones with lowest prices after all settles they will grow
granted im an old dude but the carvana model seemed dopey from the onset .
Carvanna creditors are not idiots.. they will release that inventory in tranches, not all at once.
I love you guys. I’ve actually paid $100 for your advice. But actually it’s more than that. It’s all definite genie in a bottle. And I’ve been looking for a Honda clarity touring and they have dropped in price in the last five months about $3000. And with this video, I’m going to wait a little longer. Or maybe buy some. Just wanted to say you guys are awesome.
Was doing some shopping on a classified site and overall used car prices seem more reasonable than they had been. Carvana prices were much higher in comparison. They aren’t doing themselves any favors.
Nothing is free in this world I tried there is no car.. they want all the money. I cant get it I am so messed up man I don't know what to do.
Don't believe him lol. It's a great time to buy cars for sure but not like it's a permanent thing. Buy your used cars up while they're hot
This is so interesting