I sold my Fit to Carvana ($1k more than Carmax, with driveway pickup!), and they've got it listed up for sale for a cool $15,990.

https://www.carvana.com/vehicle/3115653

Now I scratched my head and did some searching and found another 60k mile 2012 Fit on Carmax in NC for more like $11-12k. The used car market has softened so that's about what I'd expect. What is Carvana's weird game here? They've got a bunch of units just like this. Do they just list super high and count on people who can't get any sort of auto loan showing up, and agreeing to installment payments on that huge number?​

 

What did you get from Carvana compared to Car Max?

As far as Carvana selling your car,

As P.T. Barnum stated,

"There's A Sucker Born Every Minute".

 

Those places appeal to people who hate to shop for cars. Lots of people hate haggling or finding a buying service or whatever so the store presents it as "the price is the price. You don't like the price? We have other cars." The cars (at least at CarMax) come with an air of being inspected (by a general tech who can shunt off the cars with lots of hidden rust and expensive fixes soon to come but probably doesn't know to do deep checks like proper spark plug torquing on gen 2 Fits) and a 30-day return warranty (try that at most dealers). And they rely on customers who don't want to shop around at a bunch of dealerships or visit private parties with cars for sale.

It's convenience shopping and convenience always has a price.

 

in my case, Carvana $9000, Carmax $8000 (just over both cases)

it is hard to be totally sure if apples to apples since Carvana uses only 3 quality grades, while Carmax uses the standard 4 (new, good, fair, poor).

 

i get that, but carmax is selling the same cars for a lot less. If i check out newer vehicles, Carvana is listing 2018 Corollas with 50k miles for $19k. A NEW corolla starts at $22,050. Sure, a LE corolla isn't very fancy, but it's got zero miles on the odo instead of 50k and six more years of life ..

 

Agree with you but each company decides what it needs/wants to make on its product. That plays into how much they offer people selling their car and how much they sell it to someone new for once they flip it. iirc Carvana ran into some financial problems when the used car market started softening and people didn't want to pay just any price for a used car. Maybe they have to make up for lost ground when they find the right customer.

One of the Fits I looked at from CarMax before I bought mine last October was a '17 EX from half a country away with 99k miles, 6 sp, a clean title (whatever that means these days), no service history ("You've got 30 days for your mechanic to look at it. You can bring it back if you don't want it") and a clearly well-used cargo area (complete with missing luggage cover). I had just started looking but hard pass on that one at that price. Even if I hated car shopping and haggling, I think I'd swallow it to save 25% on a car. But that's me.

 

Sure, and carvana can certainly price how they feel. It remains weird to me, especially as you get to recent model cars, that there are people who think these are good deals.

I've taken an updated look at Carmax to compare and the price ranges are similar (for that mileage), I suspect that seeing other offers down closer to $12k are dealer inventory and yes, you would be back into shopping legwork to get at those.

https://www.carmax.com/cars/honda/fit/2012

One suspicion i had during covid times was, Carmax and Carvana clearly pay to saturate the top Google search results with 80% their stuff. So there have to be some people who are effectively unaware that any other options exist besides those two retailers. And i know their algorithms price off each other's offers to some extent. So I think we are in a world where they've captured a decent chunk of the used car sales market, and are only interested in pricing to that "I don't know better" market segment. Carvanas financial results have turned better recently so it is apparently a better strategy to price high (and offer less during tradein) than not doing it.

For my Fit. I doubt they've done anything besides replace the battery. But they should. The brakes have gone spongy just 3k miles after full service, so thatll be job number one. It's become sluggish so assuredly needs the valves adjusted. And the battery itself is not the problem - there's some parasitic drain that I didnt fully track down. All of that is like $2k of work if you wont DIY - of course a car like that would go to Cavrvana to deal with, won't hand it to a private buyer if i can help it. Cosmetically, it's excellent - there can't be any GEs out there with less interior wear, and the body is in good shape besides normal new england rust. The spark plugs have been minded properly. It'll be a good car for somebody, and theyll get a free and undisclosed Progress sway bar out of it. But at $16k? I'm going with PT Barnum here too ...

 

I was curious just what the numbers looked like for CarMax and Carvana and found that the reality is that they have less than a 5% share of the U.S. used-car market. Now, true, that includes private-party sales (I could not find what percentage of the market is private-party). But that's still a bunch of people who know where to look elsewhere for used cars and, apparently, do.

Maybe 5% of the market isn't bad for just two companies with a bunch of locations. But I think their influence is more in the national brand names and on-line presence than the number of shiny boxes they move each year. Their net income certainly comes from making a gross profit average of almost $2k per car and in financing and purchase protection plans. You don't have to move that much metal to make money with that.