Over the past six-month period, online used car retailer Carvana has seen its stock value drop from nearly $300 per share to about $30 per share. According to the New York Stock Exchange, on which the company’s stock is traded, the value of a share of the company's stock has dropped by 88% in the past six months. Carvana’s stock price peaked at over $360 per share in August of 2021. In the first quarter of this year, Carvana posted a half-billion-dollar loss.
Related Story: Used Car Purchased Online From Vroom Goes Horribly Wrong
In Illinois, the company’s license to sell cars was suspended. Like fellow online retailer, Vroom, Carvana customers have claimed that they did not receive the title to the vehicle they purchased from the company, and therefore could not register it.
Two weeks ago, Carvana laid off about 2,500 of its workers - using Zoom. Employee Jay Romero told CBS Newa, "It was a very scary experience. I had no support from anybody — no management, no team leads." According to news reports, workers being laid off were not even allowed to ask questions.
In a summary of Carvana’s troubles, TechCrunch says that the company overbuilt for its sales volume. That is a way of saying that the company has too much overhead and not enough customers.
Torque News looked up Carvana’s rating by the Better Business Bureau and discovered that the headquarters listing is “being updated.” The Florida location of the Carvana has had nearly 4,000 complaints filed by customers over the past three years, with the bulk of those complaints happening in just the last 12 months. Furthermore, despite Carvana advertising on its website that it earns a 4.7 out of 5-star rating for quality, on BBB customers rate the company just two stars. BBB says the Carvana does not earn its accreditation despite being in business for over ten years.
Online car-buying held the promise of eliminating the dreaded used car lot and the hassles associated with haggling over prices. Carvana created buildings intended to look like vending machines. This gives the impression that buying a car is a simple process. As any used car buyer knows, a test drive, review of all maintenance records, a report detailing any accidents, and inspection by one’s own trusted mechanic are always important steps in the process.
Have you purchased a car from Carvana? Tell us about your experience in the comments below.
Image courtesy of press release via Carvana's News Page.
John Goreham is a long-time New England Motor Press Association member and recovering engineer. John's interest in EVs goes back to 1990, when he designed the thermal control system for an EV battery as part of an academic team. After earning his mechanical engineering degree, John completed a marketing program at Northeastern University and worked with automotive component manufacturers, in the semiconductor industry, and in biotech. In addition to Torque News, John's work has appeared in print in dozens of American news outlets and he provides reviews to many vehicle shopping sites. You can follow John on TikTok @ToknCars, on Twitter, and view his credentials at Linkedin
Re-Publication. If you wish to re-use this content, please contact Torque News for terms and conditions.