This is another troubling setback for the used car company, whose future remains uncertain.
National used car dealer Carvana is scaling down its third-party marketplace, a program that allowed outside sources to sell vehicles on the company's platform, according to Automotive News. These additional vehicles were sold alongside Carvana's certified used offerings.
A screenshot stating the program's termination was sent to dealers and then found its way to social media last month. Carvana's PR department has not directly commented on what's going on, but the writing is clearly on the wall.
The screenshot was quite clear, stating that "Carvana will not accept new vehicle listings from its dealerships after November 30." Ernie Garcia, Carvana's CEO, did, however, tell a used car conference last month that the company is moving away from the program, blaming increasing costs and a difficult economy.
This doesn't mean third-party sales won't ever return to Carvana, but it's definitely gone for the foreseeable future. Oddly, Carvana has never provided many details about the program's operations, such as who are those partners and how the economics work. Hertz rental, however, did reveal over a year ago that it is one of those partners. This is is the latest among several setbacks in what's turning out to be a terrible year for the company.
Earlier this month, it slashed over a thousand jobs and saw two of its Pennsylvania dealers face varying types of legal suspensions after failing to follow state sales laws. A similar situation happened at two Detroit-area dealers in October, and in Florida in August. The used car seller faced additional scrutiny in September when a customer received a mere $300 in compensation after purchasing a mechanically troubled 2015 Volkswagen Tiguan.
The crossover broke down almost immediately after leaving the lot and the owner was left with a hefty tow and impound bill after Carvana roadside assistance failed to show up. The situation caused significant and unnecessary strain for the owner and was only resolved after the Boston Globe reported on what happened.
Aside from that situation, Carvana continues to defend its business model, stating that state authorities fail to understand how the company operates and instead simply penalize numerous locations instead. But is it really the other way around? The law is the law and Carvana clearly had difficulty following it. And now with the loss of its third-party program, Carvana takes yet another nosedive.