Online used-car retailer Carvana on Thursday starts promoting its presence in Santa Fe for people to buy, sell and finance used cars through the Tempe, Ariz., company’s website.
Santa Fe became Carvana’s 148th official market, though Santa Fe residents conceivably have been buying cars through Carvana since Albuquerque became the 37th official market in 2017.
The company, which has gained a national presence with the help of an eye-grabbing advertising campaign that features cars emerging from a modern-looking glass dispenser, would not disclose how many vehicles have been sold in Albuquerque or Santa Fe.
The idea is a person can go to the Carvana website and shop among 15,000 to 20,000 cars that are extensively photographed. The company’s tagline is a car will be delivered to a person’s home “as soon as the next day.”
Amy O’Hara, Carvana’s associate director of communications said she believes Carvana will be able to achieve next-day delivery in many cases because the company has inspection centers in Tempe and Dallas. Cars ultimately are delivered from Carvana’s logistics hub in Moriarty — as they have been since 2017.
“You’re halfway between our inspection centers,” O’Hara said.
The difference between the last two years and now being an official market, Carvana now plans to advertise in Santa Fe and fulfill the “as soon as the next day” pledge, O’Hara said.
Like many arenas in online commerce, Carvana has grown exponentially since it was founded in the Phoenix suburb in 2012. Carvana sold 2,105 vehicles in 2014, 94,108 cars in 2018 and more than 175,000 in 2019.
Carvana has expanded official markets to 30 states but has delivered cars to all the states in the Lower 48.
“They will go to the next biggest cities in New Mexico,” said Marc Powell, executive director of the New Mexico Independent Auto Dealers Association, which represents used car dealers in the state. “They will become the largest car dealer in New Mexico without a [dealer] license.”
Carvana has no dealerships in New Mexico or locations for customers to interact with the company in person. O’Hara said the company “expects to become a licensed dealer in New Mexico.”
The New Mexico Taxation and Revenue Department has determined Carvana’s New Mexico operation — its vacant storage lot in Moriarty — does not qualify to be licensed as a car dealer, department spokesman Charlie Moore said.
Powell said he is concerned Carvana customers in New Mexico will not have the same consumer protections that used car dealers must provide. One is a law that requires used car dealers to notify customers if the vehicle has undergone alteration or chassis repair valued at more than 6 percent of the vehicle’s sales price.
“Generally, when technology changes, it takes a while for public policy to catch up,” Powell said. “We would welcome them with open arms if they get an independent car dealers license. What we want is an equal playing field.”
Carvana delivers cars to people’s homes, much like Tesla, which bothers used car dealers who note traditional outlets are not allowed to sell vehicles anywhere except on their own lots.
“The average used car dealer in Albuquerque sells 20 cars a month,” Powell said. “We believe Carvana is selling on order of 100 cars a month in Albuquerque, maybe more or maybe less. It could be 200. That is on the order of the largest used car dealers. Is this the end of the neighborhood dealership? Carvana does not create demand. Carvana takes market share. No one has done anything to stop this export [of money].”
Bernalillo County has 370 licensed independent auto dealers. Santa Fe County has 38, Powell said.
With annual revenue near $2 billion, Carvana is a spinoff of the Tempe used car conglomerate DriveTime Automotive. The company has no salespeople but does have “customer advocates” to walk would-be buyers through purchases, selling their vehicle or financing.
Carvana offers financing, allows third-party financing through banks and credit unions, and accepts cash, O’Hara said.
Carvana, however, does not have test-drives prior to purchase. But the company does have a seven-day, money-back guarantee.
Car buyers can do a virtual trade-in and sell a car to Carvana, which will pick it up at the seller’s home. Customers can enter a VIN and license plate at the Carvana website and get a price offer in two minutes. The age of the vehicle doesn’t matter.
“As long as it’s running, we’ll take it,” O’Hara said.
