The Carvana Catastrophe


Carvana, the popular online car-buying site, has been losing big lately, and trends don’t prove very positive for the company. Online buying has been increasingly popular of late, but automotive market trends are showing a shift, and Carvana are paying the price.

Carvana is in heaps of trouble. The company, which saw lots of success and growth in 2020 due to the Covid-19 pandemic, is now struggling to make ends meet. When the pandemic started nearly three years ago, used car dealerships closed their doors, and customers shifted to buying cars online from companies such as Carvana, CarMax, and Vroom.

But with the automotive market showing signs of recovery and prices of used cars beginning to drop, it is these companies that have started to suffer. Dealerships are back on top, and Carvana is sitting at the bottom of the barrel. Will they be able to come back?

The car vending machine company is taking a massive hit. Will they be able to recover, or will they forever be out of service? Keep reading to learn more about what’s happening.

Recovering Market Bad for Carvana

It might seem backward, but it is because the automotive market is recovering that Carvana is struggling so much. The reason for Carvana’s success was largely because of the 2020 Covid-19 pandemic. When customers had nowhere else to turn, they turned to Carvana.

People began buying and selling cars online, which, in turn, bolstered the once-niche online used-car market. With manufacturing plants closed down and stopping new car production, many brick-and-mortar dealerships shifted to online sales, helping used car dealerships stay afloat.

This caused the price for used cars to shoot up exponentially and for companies like Carvana to use this to their benefit. People all across the country were looking for used cars, and they were fine with paying much higher prices to obtain them.


Carvana offered a simple and easy solution, and they would even deliver the vehicle to your doorstep. But with more new cars on the market and demand for used cars falling, prices are dropping. Facing many issues, including being banned from selling in several states, Carvana is struggling to stay profitable.

A Convenient—But Costly—Model

While the company is a very cool concept, it is much more expensive to operate than you might think. To purchase, refurbish, market, and sell a vehicle can be an extensive and expensive task. Then tack on the expense of delivering the car to a buyer’s driveway, and the costs add up. But that’s where matters only begin to get worse.

It has been reported that Carvana has been delivering vehicles in sub-par condition. Customers, who can’t see the car they buy in person, have to trust that Carvana will deliver the car in good condition. The company has also run afoul of several states’ Attorneys General and Department of Motor Vehicles for selling cars in poor condition, selling stolen vehicles, and not getting vehicle title paperwork transferred in a timely manner. Between consumer class action suits and having its business license yanked in several states, it’s dark days for the online vendor.

Carvana Pressed for Solutions

Carvana has to act fast to turn its fortunes around. With the market on a path to full recovery, the online-selling company will have to look for solutions to its problems. If they fail to find suitable solutions, they could fade into oblivion faster than their rise to fame.

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