[birken]

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.

[jeffbee]

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!

[alex504]

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.