Existing research supports the hypothesis that online sales of used car sales in the U.S. have been increasing; however, none of the reports examined specifically focuses on digital sales of used luxury cars. Instead, the reports focus on the used car segment as a whole without further segmentation to reveal category sales of used luxury cars retailing at about $40,000. Therefore, the findings uncovered focus on the whole used car market, which includes the sales of used luxury cars, despite not publishing stats specific to that category.
- According to Carvana Founder and CEO Ernie Garcia, the COVID-19 pandemic has caused many individuals who could not have considered purchasing a car online to give it a try.
- A recent CarGurus survey found out that 60% of the respondents were willing to purchase a car online versus 32% before the pandemic, a shift experts warn is here to stay.
- In the used car market segment, Carvana reported revenue of $1.12 billion and nearly 56,000 units sold, indicating an increase of 13% compared to 2019 unit sales. Equally, the number of vehicles sold was 25% more than 2019 sales.
Sales Growth across Online Car Marketplaces
- In 2019, online car marketplaces vendors — Carvana, Vroom and SHIFT sold less than 300,000 cars online, equivalent to less 1% of the used-car market sales the U.S.
- In 2020, during the onset of the COVID-29 pandemic, online car sales declined 30% then rose towards the end of April and early May, according to Carvana. Sales started bouncing back and climbed 20% to 30% year over year growth, an indicator that more U.S. consumers are buying used cars online.
- Carvana’s available inventory marked “pending purchase” kept decreasing from “21,000 in mid-March to 11,000 in mid-May to just 5,000 as of late July” an indicator that more used cars were being purchased online. Presently, the company is refocusing its efforts to sell more used cars by increasing purchases, reconditioning, and making available many cars on its website.
- To match the increasing demand for used cars in the U.S., Carvana recently opened its “ninth inspection and reconditioning center (IRC) near Columbus, Ohio” to bring the company’s total annual used car reconditioning capacity to about 500,000 cars. These numbers suggest that the company is experiencing strong growth, an indicator that sales of used cars in the U.S. are climbing, which likely include the sales of used luxury vehicles.
- Research focusing on the many online marketplaces selling used cars in the U.S. are reporting increasing sales post COVID-19 pandemic. Findlay Auto Group claims to have been “three to four times more online sales and at-home deliveries,” with foot traffic at its stores averaging about 40%. Carvana’s used-car sales jumped 89% in 2019 to 177,549 units.