Carvana Partnering With Dealerships - Partner Inventory?

[Zach Houseknecht]

This just popped up in one of the Dealer Facebook groups I'm in, and I wanted to see if anyone here had any ideas about it or more news on it. Plus to get opinions on it too.

It seems as though Carvana is partnering with certain dealerships to show their inventory. What benefits could this have for the dealer? Trade, financing? I'm struggling to see the upside to this for a dealer.

Here's what pops up for their Partner Inventory info:



Example Links -
On Carvana:

Carvana | Buy Used Cars Online & Skip The Dealership

www.carvana.com

Same Inventory on Dealer Site:

Used Car King Joins the EchoPark Automotive Family | Echopark Automotive

Used Car King is now part of the EchoPark Automotive family. What does this look like for you?

www.usedcarking.com

 

[Brittany]

I'm here for the discussion comments that will inevitably follow. I wouldn't have thought this would be in Carvana's future.

 

[Dan Sayer]

Whoa. Carvana is getting into the 3rd party game except different...? Does this have anything to do with CarGurus's partnership with Carvana?

 

[Jeff Kershner]

I was wondering if this was going to eventually happen.

I believe Cargurus and Carvana share a few of the same larger shareholders.

 

[Dan Sayer]

I was wondering if this was going to eventually happen.

Cargurus says, "nothing to do with us"
It's just one big happy world. Everyone will just list everyone's cars and the shoppers will just sort 'em out.

 

[Jeff Kershner]

I reached out to @Todd Caputo (owner of usedcarking, the Jeep listed) for some info. Hopefully we will hear from him.

 

[jscole86]

This just popped up in one of the Dealer Facebook groups I'm in, and I wanted to see if anyone here had any ideas about it or more news on it. Plus to get opinions on it too.

haha Beat me to posting it here - I'd be interested to hear @Todd Caputo 's take on the pros / cons of this. Essentially, what I've heard is that, once Carvana has a customer on it, the dealer will "wholesale" the vehicle to Carvana at their retail asking price. This essentially eliminates any possibility for a dealer to get the trade-in, any financing, F&I products + Re-insurance profits, a new retail customer, a positive review, etc. You are essentially taking the prime profit opportunities in a deal and off-loading it to Carvana. My questions is for what in return?

Upside: it could help to turn inventory quicker (think aged inventory), because of a larger amount of eyeballs on your inventory.

 

[Dan Sayer]

Seems to me this is a move that points to the need for inventory "content" on their site? Also would explain the acquisition play on CarGurus that started this week. All about needing to increase inventory. We all are in the same boat. They show 34,107 right now. CarMax shows 69,883.

 

[Alex Snyder]

haha Beat me to posting it here - I'd be interested to hear @Todd Caputo 's take on the pros / cons of this. Essentially, what I've heard is that, once Carvana has a customer on it, the dealer will "wholesale" the vehicle to Carvana at their retail asking price. This essentially eliminates any possibility for a dealer to get the trade-in, any financing, F&I products + Re-insurance profits, a new retail customer, a positive review, etc. You are essentially taking the prime profit opportunities in a deal and off-loading it to Carvana. My questions is for what in return?

Upside: it could help to turn inventory quicker (think aged inventory), because of a larger amount of eyeballs on your inventory.

Interesting. Smart move for Carvana. I wonder what the photography requirements are?

 

[Zach Houseknecht]

haha Beat me to posting it here - I'd be interested to hear @Todd Caputo 's take on the pros / cons of this. Essentially, what I've heard is that, once Carvana has a customer on it, the dealer will "wholesale" the vehicle to Carvana at their retail asking price. This essentially eliminates any possibility for a dealer to get the trade-in, any financing, F&I products + Re-insurance profits, a new retail customer, a positive review, etc. You are essentially taking the prime profit opportunities in a deal and off-loading it to Carvana. My questions is for what in return?

Upside: it could help to turn inventory quicker (think aged inventory), because of a larger amount of eyeballs on your inventory.

If that is how it works, I could see it helping aged inventory out. But exactly like you said - it gets rid of all the potential benefits - financially and otherwise in regards to dealing with the end customer directly. I'm interested in how many dealers hop on this and the effect it will actually have in our market.

Interesting. Smart move for Carvana. I wonder what the photography requirements are?

Alex, looks like - and I'm gleaning this from the actual Carvana listing - they take your "360" walk-around photos of the car, blur out plates or anything dealership associated, and also require a 360 camera placed on the interior. Basically mirroring their own photos. I assume they want it to integrate as seamlessly as possible on their site.