Some people looking to buy a car dread the prospect of the spending hours at a dealership or haggling with a salesman over price and features. Carvana, a company launched in Atlanta in 2013, offers an alternative way to shop for an automobile. Carvana customers browse an inventory of certified pre-owned vehicles, select personalized financing terms and coordinate delivery—all online. The process, according to Carvana, can take as little as 15 minutes.
“The traditional used car sales model came into being about 75 years ago,” noted Carvana CEO Ernie Garcia. “The model is replicated over thousands of dealerships across the country that are very similar to each other. It hasn’t changed much in 75 years. Customers sit down with a salesperson and discuss price—something the customer understands—along with a lot of things the customer doesn’t understand,” he said.
“Because dealerships are so similar, each is typically trying to be successful by making as much money from each customer as possible. Car dealerships aren’t trying to give their customers an unpleasant experience—that’s just the model that evolved,” Garcia continued.
Garcia, one of three founders of Carvana, said he and his partners started by asking themselves why so many people found the car-buying process so uncomfortable. “We didn’t start by saying, ‘Let’s build an online car business.’ As we talked about it, we realized that many features from 75 years ago such as the huge physical car lot were necessary before the existence of the Internet, but they’re not necessary today. As we were reinventing the used car business we said, ‘And let’s see if we can find ways to save the customers money at the same time.’
“Because the approach was so new business was very slow at first. We had to overcome the legendary distrust of used car dealerships,” Garcia recalled. “We were lucky to sell 10 cars a month in our first few months, but once word got out about us, we really took off. It also helped that Forbes named us the fifth most promising new company in America.”
Since its launch, DeKalb County has been one of Caravan’s strongest sales markets, establishing the area’s large population as early adopters to the growing online car buying trend, Carvana reported.
Shoppers narrow the list of available cars by indicating such factors as body style, mileage, age and price. From the cars meeting their criteria, shoppers may inspect cars online using a patented 360-degree photo process that allows them to change the angle, look closely at any detail and virtually open doors, the hood and the trunk.
“I probably looked more carefully at the car online than I would have at a dealership,” said a retired DeKalb customer who used Carvana to buy her first preowned car. “And I got to look it over in person before I drove it away.”
The retiree needed the car right away and chose to have it delivered to the Atlanta area “vending machine,” a facility with offices and a three-car garage. A Carvana employee—they don’t call themselves salespeople—helped her through the “paperwork”—most documents were completed and signed on a computer—and within minutes she drove away in a low mileage, late model Ford Fusion.
Customers also have the option of having the car delivered to their homes. Either way, the customer has seven days to decide whether to keep the car, which comes with a 100-day or 4,189 mile bumper-to-bumper warranty.
Another DeKalb County resident, Erika Curtis, said of her experience with Carvana, “As a first-time car buyer, I had a lot of anxiety about going to a car lot for the first time. I found Carvana through Autotrader.com, and was so relieved that it was an option.”
She added, “Carvana was easy to use, their website is very open and up-front with any of the car’s flaws, and they give you all the information you need to make an informed decision. I found them to be a very trustworthy and accommodating business for a first-time buyer. I’m not normally one to rally behind a brand, but I’m a big fan of their business model.”
Carvana states that because an online shopping platform replaces the dealership with technology, consumers receive an average savings of $1,681 compared to Kelley Blue Book Suggested Retail Price.
Online information about each car includes its nonnegotiable price and its Blue Book price.
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