Car vending machines sound like the stuff of science fiction specials, however, with the advent of Carvana, that reality is here. On the surface, Carvana indeed does look like the car shopping experience of the 21st century. It’s online, no hassle-no haggle model seems tailor-made for a generation that prefers fast, convenient service with as little face time as possible. Carvana’s website promises lower prices than traditional dealerships, as well as money-back guarantees and subsidized travel if you’re outside of their delivery zones. Their site features close to 18,000 positive reviews, all attesting to the company’s high convenience and satisfaction ratings.

That said, the concept is still new, and as with most new things, it isn’t perfect, which is why many are not dropping their dealerships just yet, even if they do flirt a bit with the competition. Here are five ways dealerships still make more sense to shoppers.carvana

1. No Haggling Means Less Savings

Carvana is not the first online retailer to promise the convenience of no-haggle buying. While on the surface it sounds like a great deal, a closer look shows a more complex picture. Customers assume that if there’s no haggling, the quoted price is the absolute lowest. However, as Jerry Reynolds points out in a 2017 article for Car Pro, that’s not entirely true. He compared a number of cars and found that on average the prices quoted on Carvana are higher than competitors. His bottom line: customers need to decide how much convenience is worth to them, bearing in mind that in some cases, it can come with a $1K+ price tag. While haggling isn’t anyone’s favorite activity, the truth is it does bring costs down on many cars, making the process still worthwhile for those looking for a good deal on a car.

2. Location, Location, Location

Currently, Carvana has only three locations: Atlanta, Charlotte, and Dallas. If you live in or near one of these locations, picking up a car at a vending machine or having one delivered to your door isn’t much of a hassle. But if you’re an out-of-city or state buyer, things start getting trickier as you’ll either need to fly to your car or pay for shipping. Not exactly the height of convenience. And while Carvana will subsidize your flight in with $200, that’s not going to cover everything, especially if you’re flying–and then driving–long distances.

3. Looks Can be Deceiving

Few people want to spend their weekends walking through lots, kicking tires. Which is why Carvana offers 360-degree viewing of all their cars, promising “no stock photos” on their website. While in theory being able to go on a three-dimensional tour of a vehicle sounds like a promising deal, the reality is that the current picture quality is not high, leading to some saying they were surprised by the actual look once they received their car.

4. Long Distance Service

carvanaAnother area where traditional dealerships still have an edge is with personal service. As mentioned above, Carvana is still only located in three places, making most of a customer’s interactions virtual and distant. This has led to quite a few service issues as complaints can take double or triple the time to be resolved.

5. Long-Term Viability

Like all businesses, Carvana aims to make money. However, even if they are underselling the competition, there is a reasonable worry that that model can’t last long and that eventually, prices will have to rise if they want to stay in business. Car vending machines are expensive to build, after all, and their current model keeps their stock relatively low. So there are concerns that they’ll go the way of other online car sites, racking up negative reviews and turning to mediocrity.

Which makes Carvana an excellent opportunity for dealerships. Managers and sales teams should look at where Carvana and those like it excel and fall short, and capitalize on both sides. If customers are turning to online sales sites because of the convenience, then dealerships should look for ways to bolster convenience levels both on and off site. They should also focus on advertising their strengths in comparison to Carvana: dealerships are local and personal, and they allow customers to negotiate lower costs and know precisely what to expect from the car they drive home.

14 COMMENTS

  1. I think that this article is a little bit bias.
    Carvana has also location in Philadelphia and bring to NY for free.
    Going to dealership you can see the cars but dealing with sales mans is the biggest hassle.
    The quote on the car will depend on the interest that you pay in the credit, nothing to do with carvana. You can use other line of credits if you want but they can be marginally different at least in my case.
    99% of the dealership are not upfront with the real price of the car. They publish a price online tu lure you to the store and when you are trying to make a deal they start with dealership fees that makes cars more expensive.
    That is why the Carvana model will gain. They publish a price and that is what you pay you don’t deal with any scum bag of a salesman.
    In my case I paid around 1500 less in the car that I bought than in any use car dealership.

  2. I call bull****! I just bought a car from Carvana it was delivered to my front door in Bakersfield Ca for free. The same car but black, a dealer in San Luis Obispo wanted $23k before tax and lic, the dealer would only come down to $20k. I got the same car from Carvana for $18400 with tax and lic.. l believe I saved around $5000, the sales person couldn’t believe the deal until I sent him the details of the car. Plus you get 7 days to return it if you don’t like it. This article is probably paid for by a car dealer to steer customers away from Carvana.. I do feel you have to know what car you want. So go to a dealer and test drive cars, then buy from Carvana easiest car I’ve ever bought.

  3. Not true. I bought my car and had it delivered to Oceanside, Ca for free. The price of my car was 32k including tax and license while I was looking at the same car from a different dealership for more – around 37k. Same car. Same Color. Same modifications. My car has 20k less in mileage for less! Please do your research before writing articles like this. It ruins your credibility not to be stating facts.

  4. All of this is seriously laughable. Lemme break it down…
    1. No haggling means you won’t save as much money: Dealers make up these “savings” on the back end by adding tons of dealer fees, etc. You don’t save money haggling. In fact what you do is spend HOURS of precious time trying to get a better “deal” just to spend even more, and we all know time is money, honey!
    2. There are only 3 locations: Try 91.
    3. Photos are super high quality and anything not in Carvana standard is clearly annotated.
    4. See answer for #2 …. Carvana also offers direct delivery for anyone outside of one of these areas.
    5. Carvana just celebrated their 6th anniversary and is already a top 500 company. It’s not going anywhere. Consumers have already proven this business model is here to stay.

    Gotta love journalists who obviously have no idea what they are talking about. Just another note to consumers to do their own research!

  5. From what I’ve seen, Carvana is more expensive on the vehicles I’ve been looking at. There’s no way I’d make a purchase for tens of thousands of dollars without looking over the merchandise beforehand. I don’t know how this marketing method got started in the first place. And btw, I hate car dealers in general.

  6. They are in Nashville also…and Carvana sells used cars only because of the outdated, expensive and rediculously not needed laws that created the dealership model in the US for new cars.

  7. I totally disagree with this, I found the exact vehicle I wanted for less at Carvana, they brought it to me. No miss no fuss, and no annoying salesman to deal with. When it is time to replace our pickup, we will go through Carvana

  8. So much bull****, Me and my wife just purchased a Chevy Equinox felt it was too small and a few days later they had the truck we decided to swap out for no hassle just a clean swap 2 thumbs up

  9. I am finding exactly the same thing these guys are describing. The add looks great till you walk through t he front door, then the real deal starts going up and up withe excessive fees and charges. I am sold on caravana, I just wishthey hadmore stock of what I wan available. You have to jump on the deal fast!!!

  10. Carvana lost my trade-in !
    I notified them immediately (next day after delivery) that the vehicle I chose had issues.
    I initiated the “no questions asked return” policy and requested that they return my trade-in after countless hours over several days both on phone w/ Carvana and on chat (they all were nice) they set-up a return date,on that day the driver called to confirm a “pick-up” when I asked about my trade-in return he told me he only was picking up. I explained the circumstances and he called his manager after 40 minutes on hold they told me that they could not locate my trade-in. The next day they called and told me they found it. To be fair I was able to stay with their vehicle and they also added another 400 miles of driving allowance. I am awaiting the return of my trade tomorrow Tuesday at 6:30pm they better return my vehicle or I will report it stolen. The process was easy I have to admit until they lost my trade-in.

  11. This is one seriously biased “article”. I just finished the purchase process through Carvana and couldn’t be more pleased. I was looking at nearly the same car at a local dealership and they wanted $1500 more on the price plus they were going to tack on a few additional fees because they could. And the one I got from Carvana had AWD which the dealership one didn’t have (a $1800 option). Carvana made the process very simple, smooth and even fun. In the future, I’ll continue getting my new cars from dealerships because there’s no other choice but Carvana will be my first stop for used car purchases.

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