Carvana Is Turning Dealerships Into 'Playgrounds,' Test-Drive Centers With Sales All Online (cnbc.com) 39
Carvana is testing a radically different new-car dealership model in Dallas, turning the location into a test-drive center and themed "playground" while requiring every purchase to be completed through its online platform. "Every single car that we sell, whether it's used or new, is online," said Tom Taira, Carvana president of special projects who's leading the new vehicle operations. "That's a very inherent difference. Even coming into the store, you're buying it online, and that's a big difference in how people think about it." The company hopes its no-haggle pricing, hourly employees, service operations, and national logistics network can reshape franchised auto retail. CNBC reports: Through its used vehicles sales, Carvana has become the most valuable auto retailer in the U.S. with a more than $70 billion market cap. Carvana's target with the new vehicle business is to grow its market share and customer base as well as assist used vehicle sales through trade-ins and other means, according to Taira. If the company is successful, the strategy could cause a ripple effect across the U.S. franchised dealership model, which the National Automobile Dealers Association reports includes 16,990 retailers that topped $1.3 trillion in sales last year.
[...] Carvana is using a location in Dallas as a test center for its foray into new vehicle sales. The facility looks like a traditional Stellantis dealership from the outside, but the consumer process for purchasing a vehicle and the responsibilities of its employees are unprecedented. Couches and chairs replace cubicles and sales offices. There are no finance and insurance departments, and instead of an army of commission-based employees, the facility has associates that are paid hourly to assist customers -- if they want the help.
The experience is meant to be as self-guided as a customer wants. By scanning QR codes located on 10-foot-by-10-foot screens inside the building or on vehicles and displays outside, shoppers can customize a vehicle, learn about a product's features and conduct test drives before deciding whether to purchase anything. If they do decide to buy something, it's online and not originated from a sales person, the company said.
The "playground" has roughly 50 vehicles divided by brand, with each having a theme. Jeep has an off-road display. Dodge has race tracks, including a Carvana-themed Charger pace car and part of a traditional track fence barrier. Chrysler minivans, meanwhile, have a soccer net and Ram's area is truck-centric. Carvana is not committing to expanding the exact experience to its other franchised dealer locations, but Taira told CNBC that the overall process of online sales, vehicle testing and service are expected to be consistent throughout the locations. Further reading:: Online Car Retailer Launching Nation's First Car "Vending Machine
[...] Carvana is using a location in Dallas as a test center for its foray into new vehicle sales. The facility looks like a traditional Stellantis dealership from the outside, but the consumer process for purchasing a vehicle and the responsibilities of its employees are unprecedented. Couches and chairs replace cubicles and sales offices. There are no finance and insurance departments, and instead of an army of commission-based employees, the facility has associates that are paid hourly to assist customers -- if they want the help.
The experience is meant to be as self-guided as a customer wants. By scanning QR codes located on 10-foot-by-10-foot screens inside the building or on vehicles and displays outside, shoppers can customize a vehicle, learn about a product's features and conduct test drives before deciding whether to purchase anything. If they do decide to buy something, it's online and not originated from a sales person, the company said.
The "playground" has roughly 50 vehicles divided by brand, with each having a theme. Jeep has an off-road display. Dodge has race tracks, including a Carvana-themed Charger pace car and part of a traditional track fence barrier. Chrysler minivans, meanwhile, have a soccer net and Ram's area is truck-centric. Carvana is not committing to expanding the exact experience to its other franchised dealer locations, but Taira told CNBC that the overall process of online sales, vehicle testing and service are expected to be consistent throughout the locations. Further reading:: Online Car Retailer Launching Nation's First Car "Vending Machine
Just Like T-Mobile Stores (Score:2)
Learned it from T-Mobile, and their T-Life setup.
Stores are all but useless now.
Just give me an affordable vehicle ... (Score:5, Insightful)
... that is robust, efficient and that I can maintain and repair myself if the need be. No?
Ok then, get lost. Thank you.
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I had one (Score:1)
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Get a late '90s Accord.
And no you can't really drive a car that old anymore.
Seems like no problem buying one: https://www.edmunds.com/honda/... [edmunds.com]
My mechanic Tony is good at keeping old cars running, and damn good at finding cheap parts at junkyards. But a lot of people seem to say it's not hard to keep one running https://www.reddit.com/r/whatc... [reddit.com]
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Carvanna is a used car dealership. While your comments are, obviously, something everyone here will agree with except maybe the Muskophiles, they're not really relevant to this article which is about the process of buying a car, used or otherwise.
Outside of Buy Here Pay Here places, the vast majority of used car dealers - whether they sell new cars and are selling "Certified Used" or equivalent, or dedicated used car dealers, are notoriously dishonest and engage in pressure sales, hidden feeds, the 2x2 matr
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You have to buy a car sooner or later.
No, you don't always need to buy a car, or at least you don't in locations where you can walk to where you need to get, or which has viable public transit, or various taxi services.
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Many of us don't like living in dense urban locations.
I like it (Score:5, Insightful)
As a consumer, the idea of buying a car without haggling with slimy sales and finance people is enough to make me light headed.
If they can make this work, they have my thanks. IF. They will certainly face severe headwinds from entrenched interests.
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No-haggle dealerships aren't a new idea. They've been around for decades (Saturn was no-haggle at all their dealerships). The ones that have reasonable prices do well, the ones that don't die.
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As a consumer, the idea of buying a car without haggling with slimy sales and finance people is enough to make me light headed.
If they can make this work, they have my thanks. IF. They will certainly face severe headwinds from entrenched interests.
I walk into a dealership with check in hand. Pre-approved by my own credit union. It’s the easiest way to avoid the finance department altogether. Makes it easy to know what you can afford too.
Last two cars I bought I got the test drives and research done early. Contacted five dealers in my local area, gave them the VIN # of the car I wanted and said , “Don’t call me until you have your best price.” When they did, I’d respond with ”Not bad. Now lower it $500 more, b
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I suspect both models will exist for some time to come.
Re: I like it (Score:2)
Reminds me of Tandy's Incredibile Universe (Score:2)
Which failed.
Sane people don't want these kinds of experiences, they know it just leads to a raw deal. The experiences are tangible, but the product they want is.
The experiences will be a cost adder to the final price of the car.
Now, this is not to say that the existing car dealerships don't have there own shenanigans to separate more money from you. In house financing vs. cash up front, and closing desk add-ons are the major ones.
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We have a fair bit of this in the UK. Some aren't quite as 'militant' about it, but it's pretty much all headed that way.
For used cars, it makes sense. For used cars, there's practically a formula for working out the value of the car. You then apply some small margin, and that's your sale price. There's very little 'wiggle room' any more, so there's really no haggling space.
Back in the day, you could price a car based on how shiny it was. Someone that knew what they were talking about might haggle you down,
How they earned that Experience. (Score:2)
Which failed.
Sane people don't want these kinds of experiences, they know it just leads to a raw deal. The experiences are tangible, but the product they want is.
The experiences will be a cost adder to the final price of the car.
Now, this is not to say that the existing car dealerships don't have there own shenanigans to separate more money from you. In house financing vs. cash up front, and closing desk add-ons are the major ones.
After picking out the VIN # I want, I'll find my local group of stealership victims. I'll beat them up with a phone call saying "Me Want", and make them fight over the same car for a week or two. Once I've softened the price up a bit, I'll pick a victim and walk in at 9AM sharp with a popcorn machine under my arm, within 36 hours of their fiscal quarter end.
I don't get my ass or credit score out of bed for less than 12 hours of pre-approved stealership entertainment, at no less than 10% below MSRP. Sorry
I would have liked that. (Score:3)
In my life I have owned... let's see... 11 cars. Since 1996 I've owned exclusively new cars - 6 of them. Three were distributed in my country in limited numbers so I had no haggling power.
But I'm driving my current car until it falls apart. And I won't be buying another new car. My next car will not be one that tells constant stories about me to data brokers:
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Disconnect/power down DCIM.
You can find instructions how to do this for most popular car models on youtube.
Word of warning: this will nuke all connectivity, including emergency call one.
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Worth noting that in some regions, it's called DCM
Fundamentally, it's a module that integrates online connectivity. Data Communications Integrated Module, Data Communication Module, etc.
Without it, car will have zero connectivity unless you give it access through your phone or something similar.
Carvana is sketchy as all Hell (Score:5, Informative)
I tried doing business with them twice. Got approved, closed the deal (I thought), and got notified that the deal was canceled days later, before the vehicle was delivered. They claimed they saw some possible fraud in my paperwork, although they wouldn't explain what. The first time, I'd gone through their own bank and insurance, so I assumed one of them had screwed something up. The second time, using my own bank and insurance... got the same result. My driver's license is certainly legit, so what else could have gone wrong? They weren't saying.
I have no idea what kind of scam they're running but, they don't seem to be in business to sell cars.
Anecdata (Score:3)
Re:Carvana is sketchy as all Hell (Score:4, Interesting)
I used the Carvana app a couple of years ago to buy a car and trade in my own. I paid for the difference in cash. I was a little uneasy buying a used car without having driven it first (yes, I know there are return policies, but it's a hassle) but the purchase and trade-in process was really very smooth. I drove off with my new (well, used) car after 30' at the Carvana location and seriously wondered why I'd ever go back to a dealer, at least for buying a used car.
Then I was told there was a title transfer problem with the car I'd bought. The registration wasn't coming through because of faulty documentation on Carvana's end. I went through two 30-day temporary renewals, the maximum allowed in my state. Fun fact, the last temporary renewal lapsed, too, while I was out of town for a long work trip. Thankfully the problem got resolved by the time I got back. So, after around 3 months from the purchase date. The most frustrating aspect, for me, was how difficult it was to speak with someone to get updates. In the middle of all this, I also discovered a whole Class Action [topclassactions.com] lawsuit about exactly this. I hadn't done my due diligence well enough, I guess.
Would this have happened if I had gone through a dealer? I think it's less likely.
Will I use Carvana again? Also less likely.
Good, dealer laws need to go (Score:5, Interesting)
For the obvious reasons that are all being discussed here but in particular car dealers have a tendency to be some of wealthiest business owners in an area and they are overwhelmingly Republican and actively lobby (I think there are a few dealer owners in the House) as well, so for me, if I was in charge in a state reducing their power would be a political imperative as much as a consumer one (really they are intertwined).
Inside a Key Part of the Republican Base: Car Dealers [historynewsnetwork.org]
Want to Stare Into the Republican Soul in 2023? [slate.com]
For example NADA lobbies over 70% R
https://www.opensecrets.org/industries/indus?ind=T2300 [opensecrets.org]
Used cars (Score:3)
For used cars, at least, I would like to test-drive the actual one I am buying. It is not clear from the description whether this is possible though.
lowball (Score:2)
I was wanting to sell a car recently, a nice one with low miles and in great shape. I went to the Carvana website and got a low quote. I was showing it at local dealerships and went by to see them as well, maybe they would do better if they saw the car and drove it. Nope, whatever the website said it was worth is what they would pay.
Eventually I was offered about 50% more elsewhere, a decent price and I'm sure they sold it at a profit.
I had this idea years ago (Score:2)
Car dealers are evil and unnecessary. Their only purpose is to make the car buying experience unpleasant and more expensive than it needs to be.
All we need is test drive facilities, direct sales, and independent repair shops.
Car dealerships exist only because.. (Score:4, Interesting)
I bought and sold 2 vehicles through Clutch Canada and it convinced me that, unless you are looking for something very specific, going to a dealership voluntarily is self-abuse. Yes, you can't actually see or drive the car prior to purchase but Clutch has thet figured out. They post a LOT of very detailed photos of each car and they point out any dings etc. so you know what you're getting.
Then on purchase day, you get to do a walk around of the car and take it for a solo test drive, or at least that's been my experience. If you're happy with everything, you sign and drive off. If you had a trade-in, the person inspects your car, you sign and the money is in your account somewhere between 4 and 24 hours later. If you're not happy with the car, there's some number of days where you can just return it - sorry, can't remember what that timeframe is.
At no point are you talking to some greasy salesperson or having to sit through their painful sales pitches where they try to convince you to buy paint protection for $2000.
I've also purchased from Tesla. Did it all online and had the option to take the car for a 48 hour test drive. On returning it, just dropped the keys off - no sales pitch, no annoying sales person. On pick up day, they showed me to the car, asked if I wanted a tutorial (I didn't), handed me the keys, shook my hand and that was it.
It was the closest thing to a perfect sale that I could have imagined.
Nope, too many people have trouble getting titles (Score:3)
Unsurprised that Stellantis is willing (Score:4, Interesting)
...they're fucked.
Their inventory is insanely high. And worse, it's OLD.
They kept running production full tilt, forcing dealers to take new production AND FORBIDDING THEM offering deals to customers to clear old stocks. They kept trying to sell to the top of the market and nobody's interested.
So their dealers are closing left and right, going bankrupt because they can't service the sustain costs on their inventory (they don't precisely own the cars in their lots) and as few people that are willing to buy a new JEEP for $120k, there's even fewer willing to pay $120k for a "new" 2024 model that's been sitting on the lot for 3 years. Drive that off the lot and you don't lose 30% value, you lose 60% or more.
I'm not in that business, but from what I understand their collapse is a "when not if" proposition. Not shocked that when Carvana looked for someone willing to be their playground, Stellantis was willing and had dealerships that would take anything for some inflow of cash and maybe even customers.
Just used them (Score:3)
I just bought a car through them (not in Texas), and it was the easiest car buying process I've even had in my life. No haggling, no "let me talk to my manager", no upsells, and no waiting for hours in a dealership office. I will never step foot in a car dealership again,