☠ RIP to the Carvana of Canada

[Ryan Everson]

☠ RIP to the Carvana of Canada - Canada Drives

"Canada Drives says its business model, based on a fully online purchasing and trade-in experience, has proved popular among car buyers, but is no longer viable in the long-term"

Instead, they will be reverting back to a marketplace-like model and partnering with local dealers.

A sign of things to come for Carvana here in the US?

Canada Drives granted creditor protection as it restructures, abandons online

Used-vehicle retailer Canada Drives has filed for and been granted creditor protection as the company seeks to restructure its business and abandon online sales amid escalating inventory costs and weakening used-vehicle prices.

canada.autonews.com

 

[craigh]

Damn.

 

[Ryan Everson]

Damn.

Car dealers in Canada are probably too nice and friendly to be happy about their demise.

 

[craigh]

Car dealers in Canada are probably too nice and friendly to be happy about their demise.

I know a number of dealers that were very jealous of these guys and how quickly they had branded trucks and were actually doing online sales.
Most of them wanted it to succeed so they could do it too, but this is not the ideal outcome.

As a consumer, I also feel this is not the ideal outcome. It sounded like a handy way to buy a car.

 

[Ryan Everson]

I know a number of dealers that were very jealous of these guys and how quickly they had branded trucks and were actually doing online sales.
Most of them wanted it to succeed so they could do it too, but this is not the ideal outcome.

As a consumer, I also feel this is not the ideal outcome. It sounded like a handy way to buy a car.

See, you guys are nice!

Had this been in the US with Carvana, there would have been parades at the next NADA celebrating their downfall.

I think large dealer groups with an existing nationwide footprint are better suited to succeed in selling cars online. Think CarMax, Driveway, etc.

They don't have to invest in reconditioning facilities, storage lots, etc, and they already have a lot of the inventory and necessary infrastructure.

Plus they have the benefits of fixed absorption, floor plan subsidization, captive lenders, lease turn-ins, etc.

The omnichannel approach seems the way to go.

 

[LouisGao]

Unfortunately these guys had holes in their business plan.
They were purchasing vehicles privately and dealers at or above market and inflating the prices.
They also had a deceptive financing business model; a quick Google search will tell a lot.