Carvana: The Advantages of Selling Cars From a Virtual Vending Machine

Convenience, convenience, convenience. JL

Matt McFarland reports in the Washington Post:

There’s an actual glass building, in the shadow of Nashville’s Interstate 65, where customers can slip in a shiny token and watch a car of their choosing automatically descend from the five-story tower. First you’ll have to find your car of choosing online, fill out some paperwork, nail down the financing
Tucked between the Nashville Armory and a car repair shop sits what is essentially the world’s biggest vending machine.
There are no candy bars. No chips. And you won’t be able to pay with spare change. But the experience of buying a car from it slightly mimics the experience of purchasing a 3 Musketeers.
“I know it sounds a little crazy on the surface,” Carvana chief executive Ernie Garcia told me when I reached him to confirm that this wasn’t a joke.
Yes, there’s an actual glass building, in the shadow of Nashville’s Interstate 65, where customers can slip in a shiny token and watch a car of their choosing automatically descend from the five-story tower.
Of course it’s not that simple. First you’ll have to find your car of choosing online, fill out some paperwork, nail down the financing and find your way to Nashville — provided the vehicle is on site. The tower only holds 20 cars.
And unlike a vending machine, the experience isn’t fully automated. While the vending process is automated, the start-up has employees on hand.
Carvana, emboldened with fresh funding from investors, sees this as a way to remake the car-buying experience. It has previously delivered cars to customers and had a garage where customers could pick up their vehicles. (The delivery option will remain for buyers.)
“We just want to make it as seamless as possible,” Garcia said. “Having a new car is really, really fun, but buying it is not the most fun experience.”
There is no haggling involved. There are no conversations about getting the deluxe undercoating applied to your vehicle, or other add-ons of questionable value.
Garcia added that Carvana will be building several more “car vending machines” in the next several years, but isn’t announcing where yet.
Carvana does 150-point inspections on cars before putting them on the market. Buyers are allowed to test a vehicle out for a week after redeeming it from the vending machine.
Garcia says that given Carvana’s streamlined methods, it’s able to offer significant savings to consumers over the traditional dealer experience, whose layers of operation add costs.