Carvana is reporting their 4 millionth car bought and sold. I wanted to take a quick look at their trajectory, compare it to a competitor with a similar model, and discuss what this means for my car dealership clients.
First, a quick clarification, as many of the headlines I’ve seen are a bit misleading.
Carvana has sold 2 million cars to date, but they’ve also bought 2 million cars from customers. The combination of these two numbers is what creates the significant milestone of 4 million cars bought and sold.
Trajectory
According to their blog, here are the major milestones:
- 1 million cars sold in Q4 2021, after 9 years of operation.
- 1 million cars bought in Q1 2022.
- 2 million cars bought and sold by Q4 2024, bringing the combined total to 4 million.
I couldn’t find a specific date for the 3 million cars bought and sold milestone, but this timeline shows exponential growth. It took them only 3 years to double what first them 9 years. What will 2025-2026 hold for them? Will it be “just” another 2 million cars bought and sold, or could they double their numbers again from 4 million to 8 million? Only time will tell.
Carvana’s Success Factors
Carvana credits its success to excellent customer service, advanced technology, and providing customers with easy transactions and home deliveries. For the most part, I think they’ve excelled in these areas.
Competitive Edge
That being said, I also believe Carvana’s competitive advantages include:
- Massive budgets compared to individual dealerships.
- A comprehensive digital advertising strategy.
- Extensive inventory, allowing them to offer nearly every make and model, as well as run special offers.
A quick look at their ads shows promotions like instant payouts on trade-ins, EVs under $20,000, inventory for any budget, and at-home deliveries. The vehicle imagery is also enticing with photos of aspirational vehicles such as Tesla’s next to messaging about affordability. One of my previous clients was an independent lot that would sell affordable used luxury vehicles. We ran similar campaigns featuring finance offers and used Teslas and they would get strong engagement. I can only imagine the type of engagement that Carvana must be seeing with their budgets.
It’s worth noting that Shift Digital had a similar model but they’re reportedly inactive. I tried digging up some milestones for comparison but couldn’t easily find any information beyond their wikipedia page. This underscores how difficult it is to compete in the automotive industry and makes Carvana’s success all the more formidable.
How Dealerships Can Compete
My recommendation for car dealerships is simple: we need to stay aggressive with our messaging and recognize that our customers don’t live in a vacuum—they’re being targeted by competitors like Carvana.
Dealerships should focus on:
- Aggressive Paid Search on core vehicles.
- Proactive management of digital marketing vendors, including occasional third-party audits.
- Building a strong referral base by engaging with local customers both online (social media, reviews) and through community events. Losing a customer in this competitive landscape could mean losing them for life. However, the opportunity is also there to create more lifetime value from each customer through sales, service, repeat business, and referrals.
- Content Strategy and SEO to ensure visibility and engagement online.