Carvana Moves into Two Markets FeaturedWednesday, 05 July 2017 21:37
Carvana has expanded into two more markets.
The online-focused used-car group now operates in Oklahoma City, Okla., and Louisville, Ky. These are Carvana’s first forays into these two states.
Carvana now has locations in 31 markets.
CarMax Opens in Silicon Valley FeaturedTuesday, 04 July 2017 23:05
CarMax Inc. is celebrating the grand opening of its new store in San Jose, Calif.
The San Jose CarMax is located at 750 West Capitol Expressway and has the capacity to stock approximately 340 used vehicles.
In celebration of the San Jose store opening, CarMax and The CarMax Foundation awarded $15,000 in donations and grants to the YWCA of Silicon Valley. Funding from these contributions will help support programs dedicated to eliminating racism, empowering women and promoting peace, justice, freedom, and dignity for all.
Support for this organization came at the recommendation of the San Jose store associates.
CarMax Reports Double-Digit Growth FeaturedWednesday, 21 June 2017 21:16
CarMax, Inc. reported results for the latest quarter ended May 31.
Net sales and operating revenues increased 10.1 percent to $4.54 billion.
Used unit sales in comparable stores increased 8.2 percent. Total used unit sales rose 14.1 percent.
Total wholesale unit sales were flat versus the prior year’s first quarter.
CarMax Auto Finance (CAF) income increased 8.5 percent to $109.4 million.
Net earnings increased 20.7 percent to $211.7 million.
Used-car chain Carvana is seeing strong growth thanks in part to its unique marketing, but also because of an old-fashioned basic of the business – financing.
The Phoenix-based company is most famous for its so-called vending machines, vertical structures that house cars and use an automated system to bring them down to buyers.
The first vending machine debuted in Nashville in 2015. Carvan now operates four total and plans on adding more as it moves into new markets.
CEO Ernie Garcia said the vending machines are a great investment.
“I think some of the brand assets, such as the vending machines, are a very important part of telling that story as well as establishing credibility because when you drive (and see) the big car vending machine, it gives you the sense that there is a real company underneath it,” Garcia said.
However, the facilities also represent a fairly large investment.
“It is the most operationally and capital-intensive thing that we do,” Garcia said.
“It means acquiring a vending machine site, going out and finding a location, negotiating a deal with the land owner, going through entitlements with the city, and getting approved, and then physically building the space itself.”
As Carvana grows, Garcia said word of its unique process is spreading. In addition to the unusual delivery method in some markets, Carvana conducts almost all of its transactions online.
Garcia said new markets that are in close proximity to existing markets ramp up faster than totally new markets.
National advertising on cable networks will play a large part in creating awareness of what the company does to make these fresh markets grow faster, Garcia said.
He said cable advertising makes sense as the company grows larger and that broadcast advertising will follow as it expands even more.
In the end, financing matters more to most car buyers more than a cool delivery gimmick like the vending machines or ads on TV.
Carvana is doing very well in this area, setting up financing for approximately 70 percent of its customers.
Mark Jenkins, Carvana’s chief financial officer, said technology helps there, as well.
“I think (that is) a number that’s enabled by the technology that we’ve built to provide a very seamless experience to customers who could very easily fill out a credit application form on their phone or desktop, and select from a wide variety of financing options that we make available in a very transparent way,” Jenkins said.