Carvana Revs its Technology Engines, Revolutionizes Pre-Owned Car Market in Georgia and Nationwide
Friday, December 4th, 2015
Carvana, the first 360° online pre-owned car buying experience, is certifiably not your father’s used car dealer.
According to co-Founder and Chief Brand Officer, Ryan Keeton, Carvana’s technology has allowed the two-and-a-half year old firm to make the secondary car market buying process totally transparent. “Transparency is the key to our success, breaking the used car industry’s paradigm and its negative stereotypes. Even car dealerships that claim to have an online buying service are simply connecting with the consumer. Carvana completes the entire process from A-to-Z online in a user- friendly, simplified manner. And, by cutting out the dealership overhead and hidden charges, it translates to $600 600 lower cost for us on every vehicle we sell. Then we pass along an average savings of $1,600 (compared to Kelly Blue Book retail prices) to our customers.”
This transparency strategy puts the consumer in the driver’s seat, as the buyer proceeds step-by-step, at a self-made pace, any time of day or night, to get all of the information necessary to buy the car desired. The procedure starts with the selection of the type of vehicle, using nine dynamic filters, from an inventory of over 1,500 vehicles, soon to grow to 10,000 cars as Carvana expands. Pricing, down payments, monthly payments, personalized financing terms, FICO scores, trade-in values, sales taxes and registration are all available to the customer without any hidden fees. In as little as 30 minutes, the buyer, who has total control of the process, can complete the purchase without pressure from any fast-talking, used car sales reps or back room sales managers.
“We are not an aggregator,” says Keeton. “We are vertically integrated. We acquire cars at auction, from fleets and elsewhere, inspect them and recondition them. Every car we sell is accident-free, and must pass a 150-point certification process before it is Carvana ready. This includes everything from tread depth of tires to thickness of brake pads, to exterior paint quality, to Bluetooth compatibility. That type of thoroughness allows us to offer our buyers the assurance of a worry-free, 100-day guarantee.”
Thanks to Carvana’s revolutionary photographic technology, a visitor to their website is able to click on nearly two dozen pictures in order to get a full, 360-degree inspection tour, so that what they see is what they will eventually get. Shots of the interior and exterior, including zoom-in close-ups of everything from special features to any possible slight imperfections or dings, cover the car from bumper to bumper. After they take a virtual spin, consumers can purchase the car with a money-back, 7-day, “Test Own” guarantee.
Atlanta is home to Carvana’s first, unique, 24-hour, “Vending Machine” where the buyer can experience the world’s first vehicle dispenser and pick up their car. People who live out of town can receive a plane ticket (up to $200) to fly-in to get their car. Carvana also has its own drivers who deliver a vehicle directly to a customer’s driveway with free next day delivery within a radius of up to 100 miles.
Carvana’s demographics indicate that their audience is “the average American car buyer.” Their median customer age is 38 years old, but people from 18 to 80 have bought their certified cars from Carvana. “Those who have made the rite of passage on a used car lot previous to our coming into the market, realize how much better our technology, transparency and trustworthiness have made the overall experience,” says Keeton.
The car-buying public appears to be buying into this customer-centric business model, as Carvana has quickly become the second largest seller of pre-owned cars in the Atlanta market, eclipsed only by CarMax, says Keeton. Carvana’s annual sales are projected to increase this year “north of 200%” over the previous year.
The results can be seen also in the feedback and responses from Carvana’s customer base. Out of over 1,200 reviews, Carvana has received 4.9 out of five stars from its consumers. The business community and press, as well, have recognized Carvana’s arrival on the scene as notable. Notably, Carvana ranks 5th on Forbes’ List of America’s Most Promising Companies. The Phoenix-based company has also received accolades from TechCrunch, a leading technology media site that profiles startups, new Internet products and breaking tech news.
It took Keeton, co-Founder and CEO Ernie Garcia, and co-Founder and COO Ben Huston only about a year to raise capital, develop technology and create and train a work force. Since then, in a just a couple of years, they have achieved above and beyond their sales goals.
Garcia brought not only the financial and practical experience of having a prior career in the pre-owned automotive industry. He also set the guiding principle of the company culture: the trait of being passionate about working in an open office environment and having employees interrelating with each other, whether playing ping pong, keeping physical fit, or sharing a meal together from a food truck.
Huston’s law background and his persistence and careful planning are instrumental to keeping Carvana running on all cylinders. Keeton’s marketing and branding expertise help instill the notion that a complex message can be made into a simple, digestible nugget of persuasion.
Keeton summarized, “At Carvana, we are focused on making the second largest—but arguably the worst—consumer experience (car buying) meaningfully better, by offering trust, transparency and proprietary technology in order to put the consumer in control of the process. Keeping the customer aligned with all of our benefits is our North Star. We sell cars, but we’re not car salesmen.”