Carvana’s post-pandemic success shows that more people want to avoid a salesperson when buying a car.

When Carvana launched in 2014, many industry analysts expected little consumer enthusiasm for an online platform to buy and sell used cars.

But for some early adopters, rising expectations for average vehicle quality and reliability made this avenue acceptable. (And Carvana gives buyers 7 days to return their purchase).

Then the pandemic shutdowns came along. Customers visited the website in droves. Initial reviews were stellar.

However, by late 2022, supply chain issues were resolving, used car values were declining, interest rates were soaring, and Carvana had a crushing debt burden. The stock lost 98% of its value, down to $3.55.

And today? $156.

How did Carvana survive --and thrive?

- Yes, the company restructured its debt.
- Yes, it adopted a granular inventory management software system that improved efficiency.

But none of that would have mattered if the customer experience wasn't great.

So what was (and still is) so great about it?

I think it’s the *lack* of employee decision-making in the shopping and transaction experiences.

The reality is, humans introduce variables.

When we get pricing or other offers from sales or service people, we often wonder, "What is the next customer getting?"

This is why the vast majority of us hate negotiating. Even if we spend 2 hours going back and forth, we never really know anything.

Ultimately, we don't want to spend *any* time buying and servicing our cars. We'd much rather spend that time with our families and friends.

Carvana gets us closer to that by taking humans out of pricing decisions. While employees may input some information, software algorithms handle nearly everything.

And there is zero negotiating with Carvana's software. The publicly-advertised, final, non-negotiable price, is the same for everyone.

I mystery shopped a Carvana ”logistics hub” last week, just to test this first hand.

I parked my car in the large half-full parking lot and walked into the empty lobby/waiting room. Literally zero customers were visible at 2pm on a Thursday, just off the busy 405 freeway.

A service rep came out and we chatted.
Me: "So how about a ballpark appraisal on my car?"
Her: "Sorry we don’t do that. Just enter the info online and the software makes all of the calculations."
Me: "What if a seller significantly misrepresents the car’s condition or features?"
Her: “When Carvana picks up the car, the service rep will inspect it and enter that information. The software usually rejects the deal. Carvana does not adjust the offer downwards.”
Me: "By the way, where is everyone?"
Her: "Most people request delivery. But if they prefer, they can drop off or pick up their car here. But they do it fast. There’s really nothing else to do here."

Currently, Trustpilot's 11k reviews give Carvana 4.3 out of 5 stars.

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