That Massive Car Vending Machine Is Proving To Be A Financial Failure

Dealership

Having a co-founder who has criminal ties also doesn't help.

Back in 2015 the Carvana car vending machine was introduced and the world has, actually, not been altered by its existence. This past April 27, Carvana had its IPO and it’s been all downhill ever since. Bloomberg reports that Carvana’s share price has fallen below 40 percent since that IPO. With “vending machines” in four markets, including Nashville, Philadelphia, and Virginia Beach, the company lost $38.4 million in the first quarter of this year (it lost $93.1 million in 2016, hence the IPO).

Carvana also operates in 23 markets, but buyers aren’t required to use the vending machines. Instead, they can simply schedule a delivery. However, this really isn’t the best time to try to break into the already competitive US used car market simply because used cars are already at record low prices. There’s another potential but unlikely factor: the father of its CEO, who’s also a majority shareholder and co-founder, has criminal ties that go back to the savings and loans scandal in the early 1990s. Ernie Garcia II plead guilty to bank fraud but managed to avoid prison time by testifying for federal prosecutors in the case.

You Might Also Like
8 Awesome Used Nissans That Show How Cool The Company Once Was
8 Awesome Used Nissans That Show How Cool The Company Once Was
10 Chevrolet Models That Disappeared Forever
10 Chevrolet Models That Disappeared Forever

However, Ernie Garcia III, the son, failed to disclose his father’s past ahead of the IPO. But still, Carvana’s current problems probably aren’t related to Garcia II’s criminal history. It seems like Carvana was just overvalued in a market where it simply can’t compete.

Ford Mustang Splits In Half In Illegal Street Race

This is the best example of dumb luck you'll ever see.

Jaguar XE 300 Sport And XE SV Project 8 Create Modern Art

Two vastly different sports sedans that share a common thread.

LEAKED: Ford Mustang Shelby GT500 Revealed At Private Event

This is the first pic we have seen of the supercharged range-topper

All-New Revolutionary Mazda3 Teased Ahead Of LA Reveal

Along with its game-changing sparkless ignition engine.

WatchThe Extraordinary Nissan GT-R50 Being Built By Hand

It’s all about bending sheet metal the old-fashioned way.

Here's How Aerodynamics Make The Lamborghini Aventador SVJ So Much Faster

Take a behind the scenes look at this amazing system.

Fake Lamborghini Murcielago SV Reverse-Engineered By Iran

The Chinese couldn’t have done it better.

Hennessey Trackhawk Is World's Quickest SUV

That's what a thousand horsepower will do for ya.

5 Things You Need To Know About The 2019 BMW X5

After driving the car for the first time, here are our key takeaways.

What's Hot