How to Always Beat Carvana's Cash Offer
Quick History of Carvana
Founded in 2012, Carvana has become America's largest online-only used car retailer. The company launched its first market in Atlanta, Georgia in 2013, and has expanded to 300+ markets across the United States.
How Carvana Makes Money
Carvana makes money primarily by selling used cars to retail customers through its online platform (approximately 77% of its $12.8 billion revenue in 2021). When a retail customer purchases a car through Carvana, the company earns a profit on the sale, along with income from financing and insurance products. Carvana typically buys used cars from wholesalers, auctions, private sellers and trade-ins, and then reconditions them before listing them for sale on its retail website.
Carvana's Buy Low, Sell High Business Model
When you submit your car's information to Carvana for an instant cash offer, the company uses a proprietary algorithm to determine its wholesale value. The algorithm takes into account a variety of data points, such as market trends, the car's location, and historical sales data. Typically, Carvana's cash offers are hundreds of dollars below the average auction wholesale value to ensure (hedge their bet) they generate a profit regardless of whether they resell your car at auction (wholesale) or on their platform (retail). Few people are aware that Carvana made approximately $1.9 billion (17% of total revenue) in 2021 from wholesale (auction) sales to other dealers. It is important to keep in mind when you sell your car, the average difference between wholesale and retail value is approximately $3,500 - $4,500. This is potentially the amount of "money you leave on the table" if you accept Carvana's instant cash offer.
Beat Carvana's Offer by Connecting with "Retail" Consignment Dealers Near You
Use Retail My Ride to Get Connected with one of our trusted network dealerships specializing in selling your type of vehicle on consignment. Then, schedule a date to take your vehicle to the dealership to discuss their specific program requirements, and obtain a free, no-obligation appraisal. All types of vehicle type are accepted on consignment, including Cars, Trucks, SUVs, Vans, Classics, Exotics, Antiques, Custom/Mods, Commercial, and Mobility Vehicles.
You can also contact one of our consignment experts directly at Retail My Ride before being connected to your local network dealership.
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