As Carvana, the used car retail company, continues to expand and grow their market presence their inventory continues to increase and CEO Ernie Garcia believes that expansion will keep going.
"Logically, there's no natural ceiling on how big it can be," Garcia said this month at an investor conference in New York.
Whereas traditional trade-ins are restricted to the number of customers buying from Carvana who also have a vehicle to sell, buying from consumers in general, regardless of whether they intend to purchase, is an almost limitless proposition.
It's an avenue many retailers, including franchised dealers, have increasingly pursued amid a hot used-vehicle market. Compared with acquiring vehicles at wholesale auctions, buying from consumers saves time, steps in the process and money that would otherwise be spent on auction fees.
It's why Garcia views the opportunity as "really, really big."
"When you're buying cars from customers that don't have an associated purchase, that's effectively an unbounded market until you get very large relative to the broader market," Garcia said.
In the second quarter, the number of vehicles Carvana bought from customers nearly tripled compared with the prior-year quarter. That growth rate easily outpaced the company's total vehicle sales, which nearly doubled to 44,000 vehicles for the period, and revenue, which more than doubled to $986.2 million.
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