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Comment by altacc | Hacker News Reader

The problem seems to be that they sold too many cars with a negative margin. I've heard stories of people selling their cars sight unseen to Carvana for above market value and it seems they were left holding too many cars as the second hand car market normalized and prices decreased. Like a lot of VC funded companies, they were blinded to market realities by the cash each funding round produced. If they'd had to purchase cars with profits of past sales and their stock as collateral, they might have seen the reality sooner.

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The new car market is also probably contributing. I just bought a house and sold my hybrid for a Tacoma. I walked into a dealership lot to buy a '20 with 40k miles on it. I left with a brand new Tacoma with zero miles and a better package for $10k less. I was able to do this because the dealership needs to move inventory to get new cars from Toyota and hybrids are very in demand.

Why'd you go for the Taco over a Tundra?

Not GP, but the Tundra is enormous compared to a Tacoma for someone coming from a car and not used to a full-size. I was also considering a Tundra since the model refresh, but even compared to our current truck (Land Cruiser) the Tundra felt noticeably larger and less maneuverable.

Is the Tundra Hybrid even available yet? I love my 2007 but that thirsty V8 gets awful gas mileage.

That overcompensating giant flat angry looking grill (I'm not being hyperbolic, that's literally why they style them that way: https://www.bloomberg.com/news/articles/2021-03-11/the-dange... ) and far too large/heavy body is why your truck has poor gas mileage, not because it has a "thirsty" V8.

2007 Toyota Highlander hybrid MPG: ~28mpg. Same vintage year prius mileage: a bit shy of twice that.

2nd gen Tundra weighs a LOT more than Highlander and has low final drive gearing for towing. The 4.7L and 5.7L V-8's are thirsty no matter the platform. Also, that model Tundra doesn't have a giant grill. Further, much of the weight in the Tundra comes from the giant components they bolt onto it to make it suitable for towing. For instance, a 2007 Tundra will pull 7000lbs more than a 2007 Highlander Hybrid.

I have no idea why you are comparing a small hybrid SUV to a full-size truck...of course the HYBRID suv is going to get more MPG.

I have a tacoma 4-door with the long bed and it barely fits in my garage.

A lot of people want a pickup but don't need a full size truck. Tacoma fills this niche - probably more people that have big pickups would have all their needs met with a tacoma sized one. Though it feels like all trucks have scaled up massively over the past 20 years and a 2020 tacoma is probably as big as a 2000 F150.

I have an old (2006) taco at the moment and have had it over a decade now. It's been perfect. I don't want a larger tundra, I have no need for it. In fact I wish Toyota made a smaller truck. I still need all 4 doors and 5 seats but less width and less length. Perhaps the width of a rav 4, and a even shorter 4ft bed (instead of 5 on taco and 6 on tundra). Essentially like the very old 1990s Ford rangers were, but made by the best quality car manufacturer, Toyota. I don't need to pull or hold multi thousand pounds loads, but I like my fishing poles, muddy boots or filthy buckets to be outside in the bed of the truck. Actually while I'm wishing upon a star, could it also be washed inside and out with a water hose? Can it have almost zero tech, no fucking screens!! so it will last as long as this taco has? (My fan setting physical dial recently broke and fell off, but it still works because I can spin the pin that it attached too with my thumb and finger). Also can I stop dropping my keys between the seat and the center console!?!

I wonder how the Fiat Strada would do in the US.

The Hyundai Santa Cruz is pretty similar to a Strada. From what I can remember, they aren't selling particularly well, but it's been a while since I looked. The Ford Maverick on the other hand is going like hotcakes. A bit bigger, but not outrageously so.

Most Tacomas seem to sell with a 5’ bed these days, but otherwise yes, trucks are larger than ever.

Personally, I found it easier to move 2x4s or anything longer than approx. 5 feet (fishing poles) in my Prius because the Tacoma I had, had such a short bed. Otherwise I was sticking crap through the Tacoma window which was super jank.

Oh the irony.

Similarly, I had a compact sedan which could easily hold 2x10s angled from trunk to front passenger windshield area. My Tacoma had a 6' bed but I still either has to put lumber of the roof rack (of my truck cap) or just angle it out over the tailgate if going a short distance.

But I didn't buy it for hauling lumber, it was way more practical imo than an suv for camping and moving furniture and basically moving anything that isn't really long and thin. And full size pickup trucks are no better.

But yes, ironically, if the main thing you move is small quantities of 8' lumber, a sedan is better

I had an access cab w/ the standard bed (6'). Ended up putting long things in the bed, then up over the cab, then strapped down.

IMHO, with a Taco, you really need to pick an option.

Option 1: I carry people more than things, in the city. Double cab + 5ft bed (aka the common one)

Option 2: I carry things more than people, in the city. Access cab + 6ft bed

Option 3: I carry things and people, and am willing to access the turning radius and parking compromises. Double cab + 6ft bed

Honestly, for urban trucks I always liked the Honda Ridgeline (Gen 1, not sure if they still do) openable divider style. Because most long stuff isn't wide... just long. So it's fine putting it up over the center console.

I’m going to go with minivan and a trailer hitch most likely as that hits so many sweet spots (and with the seats down or out you can get a sheet of plywood in some).

>Tacoma fills this niche

...at roughly the same price as a full size truck which is pretty much a non-starter for anyone who cares.

The Colorado actually fills that niche at an acceptable price poiont.

The Tacoma costs what a fullsize truck does and you buy one if you don't want a half ton for image reasons but also won't buy domestic because that's what upper middle class people have been trained not to do.

>probably more people that have big pickups would have all their needs met with a tacoma sized one.

People buy full size trucks because if they did their "once a month max usage" routine with a smaller truck you would be chastising them for "being unsafe" instead.

I didn't need the size a Tundra has but I do need to be able to haul a trailer or things in the bed. The Taco 4x4 off-road also comes with a nifty electrical system which I plan to use at multi-day festivals.

I sold two cars to Carvana in the last year and in both cases the offers from Carvana (which included them picking up the car from my driveway) were multiple thousands of dollars better than Carmax or dealerships.

Could I have made more selling privately? I don't know, but I can tell you that Carvana paid very handsomely to do all the work involved with buying your car.

The success of Carmax has long been that they are just better on the buy side than anyone else. They are just a large used car dealer with excellent auction buying strategy. It makes sense to buy from Carmax but it doesn't make a ton of sense to sell there. You know they are trying to squeeze you on that side of the deal.

Carmax never loses money. Carvana has never earned a profit. It's sort of a big difference!

Its funny because my experience has been the exact opposite. I have sold three cars to them in the past 2 years (long story) and all of them were several thousand above what other dealers in the area or carvana/shift/vroom were willing to pay. Every time I got one of their offers I was like, "Huh. Ok".

However in buying cars from them, everything seems a overpriced compared to the local market.

My understanding of it is that they make money by doing used car arbitrage. They knew they could make money on the cars I sold them by shipping them across the country. And I think people are willing to pay a little more to buy a car from them because of all of the guarantees and how painless it is.

Sounds superficially a lot like zillow

Carvana definitely lost money when I sold to them. The car had a lot of minor problems that needed to be addressed if they ever wanted to sell it. When it came to reporting the quality, there were only 3 options. I chose the middle option even though it needed thousands of dollars worth of repairs. The person who picked up my car basically told me that they have no incentive to care so long as if you're obviously being dishonest.

Maybe there is a role for humans in the used car business for the foreseeable future, just because any automated method for assessing used car value runs into the "winner's curse" problem? (Essentially the only people who sell their cars to the automated system are the ones where the automated system offers them the best price, because there's a problem with the car that the automated system isn't picking up on.)

Even dealers don't exactly do a deep inspection or they weren't last summer. Even with some very visible problems the trade-in was more than I expected. (And in the same neighborhood as Carmax.)

> The problem seems to be that they sold too many cars with a negative margin. I've heard stories of people selling their cars sight unseen to Carvana for above market value and it seems they were left holding too many cars as the second hand car market normalized and prices decreased.

How did a bunch of paid professionals in their leadership not see this coming/account for this happening?

Guessing their bonuses and KPIs were based on volume. Not profit.

Same reasons selling pet food online at a loss drive the crash of 2000.

Capitalism rewards efficiency of resources. Idiots are punished harshly.

Just because someone is in a leadership position, doesn't mean they're competent.

Not a commentary on Carvana in particular, I know nothing about them, just an observation I've made over the years.

ZIRP gonna ZIRP

The line always goes up! What do you mean, what happens when the market cools down?

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