Buying a set of wheels in about the time it takes to hard-boil an egg? Trading in a car and learning its value in a few minutes? Getting a vehicle from a vending machine? Is this any way to buy a car? Carvana, A Phoenix-based startup thinks so.
The team at Carvana has leveraged technology to become the first complete online auto retailer, void of the traditional sea of salesmen descending on buyers at a car lot.
Carvana captured plenty of attention when it introduced a way to take delivery of a car from a machine with compartments that easily bring to mind how you grab a soda or snack in a breakroom. But more importantly, the company figured out how to leverage technology to streamline the process from trade-in to delivery in a non-traditional way. This all brings to mind a word not typically associated with buying a car: fun.
“Carvana’s mission is to create a better way to buy a car, and this new vending machine will be a one-of-a-kind experience that mirrors just how simple and easy we’ve made it to buy a car online,” says Ernie Garcia, founder and CEO of Carvana, which sells used vehicles.
Currently, the only place to pick up the car using this method is to go to a new five-story machine in Nashville or a one-story model in Atlanta. A confirmation code assigned to the buyer triggers the action to get the car into a delivery bay. To make the trip a little easier for out-of-towners, Carvana offers to kick in up to $200 toward a one-way plane ticket. Not compelled enough to make a cross-country trek? Carvana will deliver the car to the buyer’s driveway. In some cases, that happens the next day.
Carvana’s method for determining trade-in values is a prime example of how the company is tapping into innovation. In an industry where trade-in products deliver a non-firm value or are used to drive lead generation for a dealership, Carvana’s “Cardian Angel” combines technology with a customized video to provide a personalized trade-in value.
Starting with the submission of information such as the vehicle identification number, the tool leverages proprietary algorithms and machine learning to calculate possible factors impacting vehicle value — from mileage and accident history to specific trim level features and current market demand. Carvana says this part of the process takes less than two minutes.
A personalized trade-in value and dynamically rendered video unique to each consumer and vehicle then are generated to explain how the value was reached. There’s no breaking out in a sweat, wondering whether any guy in the back room will think your car is worth as much as your mechanic friend says it is. Part of the reason is there’s not enough time: After the initial information is evaluated, the outcome is available in a matter of seconds.
From there, the visitor to the Carvana website can decide whether to trade in a car toward another vehicle seen on the site, let the company buy it outright or just walk away with a sense of whether that mechanic friend was right. If the decision is to buy a vehicle, the last step is the digital paperwork. The record time is 11 minutes. When all is said and done, the average savings is $1,681, according to the company.
Image source: The Verge
When a customer gets the keys from a company representative, that begins a seven-day test drive, at the conclusion of which the buyer may choose to return the car — guaranteed never to have been in an accident — with no questions asked. While it’s not unusual to buy a used car as is, each Carvana vehicle comes with a 100-day/4,189 mile bumper-to-bumper warranty. And even before the car is put into inventory, it goes through a 150-point inspection.
As a result of this unique approach, Carvana continues to receive national attention. Last year it was named No. 5 on Forbes magazine’s list of America’s Most Promising Companies. The startup also has attracted more than $300 million in funding. Following expansions into new markets last year, including Houston, Dallas and Birmingham, it plans to move into other markets this year and activate more of its giant vending machines.
Not forgetting technology is at its heart, Carvana’s team remains focused on building innovative and helpful product enhancements in 2016 – making the car-buying experience a smooth ride.
Photo Credit: Carvana