Carvana recently saw their finance receivable go up to around $525 million in just the first half of this year. This is up from $223.8 million the company saw over the same period in 2017. This information comes from Carvana's second-quarter earnings report that was recently released.
This uptick in financing follows with the internet-based dealership's growth in expected sales throughout this year. Sales have increased 111% during Caravan's second quarter.
Carvana buys sales agreements through Ally Financial and this is how they are able to fund their loans. Toward the end of last year, Ally decided to fund $2 billion of new retail contracts through Carvana, which is up from just $600 million Ally made with Carvana in the beginning of 2017.
And in a recent earnings call, Carvana shared that in a single day they earned $4 million after refinancing $236 million worth of Carvana based finance receivables they had sold previously.
“The refinancing provides the purchaser with more efficient financing than at the time of their initial purchase, and we are sharing in the value created,” Mark Jenkins, CFO, said on the earnings call. “We believe this transaction demonstrates our ability to better monetize the finance receivables originated on our website.”
Customers of Carvana also have the choice to find financing for the cars they buy through Carvana's third-party lenders. In the first six months of 2018, Carvana sold $308.8 million in principal balances of finance receivables, which is up from last year's total of $157.7 million.
Carvana is also expanding and will be entering into four new cities throughout Pennsylvania including Allentown, York-Hanover, Lancaster, and Harrisburg. In Ohio, the company just recently expanded into Canton, Toledo, Youngstown, and Akron. Their 13th vending machine for cars also launched just last month in Cleveland, Ohio.
In a separate announcement, Carvana revealed its expansion to four new cities in Pennsylvania: Harrisburg, Lancaster, Allentown, and York-Hanover. Meanwhile, it launched in four more cities in Ohio: Akron, Canton, Youngstown, and Toledo. Carvana launched its thirteenth car vending machine in Cleveland, Ohio, late last month, as well.
Started back in 2012, Carvana now operated in 70 cities across the country. The company purchases used car inventory from companies like Manheim as well as regular consumers. Customers can shop, buy, and finance everyone online through Carvana and even set up test drives before finally buying a car.
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