Just sold to Vroom...

[User_3336]

what I'd like to know is who the hell is paying the even HIGHER amount that Vroom has to re-sell these for in order to make a profit? I mean, take my truck, I bought it used, with 19,000 on the clock, in 2020..it's a 2019 model limited with 28,800 miles now...I paid around $46K all in,(tax etc)...they want to give me $51,031!...I would think they have to get $53-$54K to make ANY profit after their costs...who the hell would pay $54K for a 2019 Limited? someone must! lol

The outrageous interest they're gonna charge the next person that buys it.......

 

[Sal731]

Can anyone tell me how it works with vroom when you still owe money on vehicle. I tried calling an after an hour on hold I just hung up

 

[IvoryHemi]

Can anyone tell me how it works with vroom when you still owe money on vehicle. I tried calling an after an hour on hold I just hung up

You have to give them the payoff info

 

[BNeal]

It's worth some googling if you guys are interested but Vroom and Carvana are venture-backed. They're running like Facebook and Amazon. They can run operating at a loss for years backed by interest free venture backed 'loans' and focus on growth and economies of scale.

The problem with this model is it destroys the classic agency model of used cars. It's causing a huge hole in the traditional way that used cars would end up on lots via auctions and because they only need to make $500 profit on every car they sell because they're also offering HUGE in-house financing then selling those pools of financed vehicles off to traditional banks in lots, they can undercut the used car dealer or auction house by a few percent per vehicle sold but Carvana is moving 100,000 cars a quarter so $500 profit up front and $1500 in interest over the 5 year loan. They're making huge amount of money yet still operating at a loss thanks to their venture financing.

An expert used car salesperson uses the market, the people they talk to, the latest auction data & their gut to offer you a price for your truck then their only job is to sell that car for a profit in-house or at auction.

Vroom is using thousands of data points. Site traffic, searches, trends, KBB/NADA/Auctions and the update their figures every second on every car out there BUT, they're willing to get very little profit on each transaction which undercuts the guy / dealer down the street.

Amazon's model worked for customers, for delivery carriers and for merchants who chose to sell on Amazon but it created this black hole in the in the e-commerce market where if you weren't with Amazon, you were out of business.

the pandemic and global supply market and low interest rates have made this perfect storm for these national venture backed used car companies to completely black-hole their way into market dominance at the expense of the used car market as we know it.

https://ir.vroom.com/static-files/b283c754-994b-49e9-86d7-5a746dd57a9e

Vroom - Crunchbase Company Profile & Funding

Vroom is an innovative, end-to-end ecommerce platform designed to offer a better way to buy and sell used vehicles.

www.crunchbase.com

S-1 Club | Vroom hits the gas

The S-1 Club is a community for those that want to be in the know before the opening bell. Once a month, we break down a business prepping for its public bow, sharing our analysis and thoughts from the community. Then we follow up, to unpack what happened after the fact.

thegeneralist.substack.com

Very interesting! Sounds a lot like FB, Twitter, Amazon - numbers I can't begin to comprehend!

 

[AdamChandler]

I was curious. I grabbed this RAM 1500 VIN from a dealer's website https://www.joececconischryslercomp...Ram-1500-725e40870a0e0ae75611f5375d85f4a0.htm

1. Screenshot of page in case dealer takes it down -

   https://imgur.com/GN8RH3P

2. Here's the window sticker - https://www.ramtrucks.com/hostd/windowsticker/getWindowStickerPdf.do?vin=1C6SRFHM6MN660004

Vroom would not 'instant-quote' but they did just send me an offer about 4 days later. $60,000 is their first offer. MSRP is $77,000 and based on my dealings with Mark Dodge, I would imagine you could get this for about 17% off with incentives and a few back and forth emails or roughly $63,910 before tax.

So you're still paying, before sales tax about $4,000 to drive the car off the lot but that's still an amazing deal.

As an aside, anyone here with 100 grand in capital want to just hit up used car lots, scan VINs literally that are showing through the window and find Vroom paying them more than the used car place is selling them for? You could walk into the guy's office, offer to buy 10 of his cars for cash if he gave you 20% off and then sell them to Vroom for a roughly 15% profit.

Seriously...that's a really good idea! (I'm not an accountant or lawyer)

 

[NorthStar]

I believe the point that's being missed is Carmax, Vroom and Carvana previously made their bread/butter on selling former rentals and vehicles acquired at the car auctions. I know for Carmax the retiring rental fleets made up almost 80% of their business at one time. Not any more.

Now, with retiring rental units in extremely tight supply to non-existent in some parts of the county, their supply chain has dried up. Likewise, anyone who drives by a major auto auction site these days can see their volume is still off by at least 50% or more thus Carmax, Vroom and Carvana have to find another way to stay alive. IMHO, they may be paying more for the vehicles but are making it up on the sale via interest rate, aftermarket warranties, etc. Likewise, take a look at the used prices, mileage and condition of the used vehicles at any of the dealerships and you'll see where the used market has gone insane due to the ridiculously tight supply of new vehicles which is cause folks to hold on to their used vehicles longer. They literally are in a death spiral as they keeping selling everything on the shelf and finding it harder to replenish it.

I have a neighbor who purchased a used 2020 Ram 1500 Longhorn Limited on Saturday. It has 18,000 miles on it and is a Level 1. He got it for $65K out the door and thought it was a steal! People are paying these prices because there isn't an alternative in most areas.

 

[piening2150]

I was curious. I grabbed this RAM 1500 VIN from a dealer's website https://www.joececconischryslercomp...Ram-1500-725e40870a0e0ae75611f5375d85f4a0.htm

1. Screenshot of page in case dealer takes it down -

   https://imgur.com/GN8RH3P

2. Here's the window sticker - https://www.ramtrucks.com/hostd/windowsticker/getWindowStickerPdf.do?vin=1C6SRFHM6MN660004

Vroom would not 'instant-quote' but they did just send me an offer about 4 days later. $60,000 is their first offer. MSRP is $77,000 and based on my dealings with Mark Dodge, I would imagine you could get this for about 17% off with incentives and a few back and forth emails or roughly $63,910 before tax.

So you're still paying, before sales tax about $4,000 to drive the car off the lot but that's still an amazing deal.

As an aside, anyone here with 100 grand in capital want to just hit up used car lots, scan VINs literally that are showing through the window and find Vroom paying them more than the used car place is selling them for? You could walk into the guy's office, offer to buy 10 of his cars for cash if he gave you 20% off and then sell them to Vroom for a roughly 15% profit.

Seriously...that's a really good idea! (I'm not an accountant or lawyer)

You're assuming 1) a used car dealer would have 10 cars worth buying right now, and 2) that with the severe shortage of cars to buy in general that he'd budge even a little off his price (that's also sky high like Vroom/Carvana/etc). Every dealer around me is thin on both new & used inventory. My son is looking to buy something used soon. Cars that were $10k are now $13k around here and still selling fast.

For the record, I run my truck thru Carvana every so often just to see what it spits out. Currently Carvana would pay $38.3k and Vroom is at $37.6k. 13 months old with 11k on it. I paid $32k new.

 

[Willwork4truck]

The outrageous interest they're gonna charge the next person that buys it.......

Well someone is going to pay more than $54K for a 2019 Limited 4x cause they are fixing to give me $54,800 for ours….
Should be gone within a week. Carvana was $46K, not even close.

Sale reason? The RAM doesn’t fit in the garage of the new home we are buying. It’s within 3 inches of the total length front to rear and that’s way too close (to park you need to run into the inside house garage wall, oh you have 2.5” to spare, no problem…) for her.

I didn’t get a smokin’ deal in April 2019, (paid $59.8K for it), but Im only down 5K from new so it’s going away…

My son, who won’t sell his 2019 Ltd 4x 6’4 bed w/level 1, only paid $54K in August 2019 at the RAM fire sale event, likely he’d get $56-58K now!

 

[Sal731]

Yeah problem is when they get your vehicle and comeback with a reason why the price has changed. So they offer me 52,350. Dealer is at 45,500. Numbers are actually close if you consider the 6k in sales tax I’ll save. I’d hate to have problems after they cart your vehicle off

 

[Vinnie.]

well they offered me 53k for my brand new truck (MSRP 68k) with under 500 miles on it. i'll definitely be keeping it hahah

 

[Sal731]

That sounds less skeptical than 53 for my 60k sticker with 27k miles.

 

[Vinnie.]

That sounds less skeptical than 53 for my 60k sticker with 27k miles.

i would agree. based on others' prices here i was expecting some crazy offer of around 68k haha

 

[Sal731]

I asked them if there was somewhere I could take my truck and do the deal in person and they said no. I’m gonna cut my losses and do the deal with the dealership because once the deal is done it is done. Like I said they take your truck and all of a sudden they try to offer less money than what. They have your vehicle and you don’t have anybody to deal with face to face. Over the phone doesn’t really work for me

 

[Sal731]

Plus I’m a little upside down with my truck. I financed 100 percent. Zero for 84. I’m getting zero for 72 on the rebel and I put 6k down when I ordered which is basically what I’m upside down. My payments should be about the same

 

[‘19ramlveryeha]

I asked them if there was somewhere I could take my truck and do the deal in person and they said no. I’m gonna cut my losses and do the deal with the dealership because once the deal is done it is done. Like I said they take your truck and all of a sudden they try to offer less money than what. They have your vehicle and you don’t have anybody to deal with face to face. Over the phone doesn’t really work for me

They send you the contract. Unless it specifically states in the contract that they can change the price I don’t think they can just do that.


Sent from my iPhone using Tapatalk

 

[Sal731]

Yes you would be right and I haven’t seen the contract. I’m sure there is a lot of fine print. Brother I’m a union guy. Local 731 here in nyc. Excavators Laborers union. I’m just much more comfortable looking someone in the eye when I’m doing a deal. If I miss something or Misinterpret something it wouldn’t be good. But I’m sure you are right. I just don’t know if it’s worth it for me for the extra few dollars. And don’t get me wrong I work hard for my money and every penny counts. I just am being cautious

 

[‘19ramlveryeha]

Yes you would be right and I haven’t seen the contract. I’m sure there is a lot of fine print. Brother I’m a union guy. Local 731 here in nyc. Excavators Laborers union. I’m just much more comfortable looking someone in the eye when I’m doing a deal. If I miss something or Misinterpret something it wouldn’t be good. But I’m sure you are right. I just don’t know if it’s worth it for me for the extra few dollars. And don’t get me wrong I work hard for my money and every penny counts. I just am being cautious

Get ready for the future buddy. Most contracts I send out over the last year have been via docusing. We still talk on the phone but it’s all electronic. Good luck.


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[Sal731]

I hear you. I’ve done plenty of stuff online including refinancing my home. All I’m saying is I have the option to drop my truck off at the dealership when my rebel is ready for delivery so I feel safer with that option

 

[JoeCo]

They send you the contract. Unless it specifically states in the contract that they can change the price I don’t think they can just do that.


Sent from my iPhone using Tapatalk

Do you have experience selling them a vehicle? They are currently my high bidder but I also would feel more comfortable getting a check before my truck departs. I know my truck needs a few things that they don't ask about in their questions, so I'm curious as to what would happen then? Or is it, if everything matches what they asked, that's the deal and you get the full offer amount? If I could get more comfortable with their process I would probably sell them my current truck very soon and take a gamble on my factory order showing up soon.

 

[lkjk]

The problem with this model is it destroys the classic agency model of used cars. It's causing a huge hole in the traditional way that used cars would end up on lots via auctions and because they only need to make $500 profit on every car they sell because they're also offering HUGE in-house financing then selling those pools of financed vehicles off to traditional banks in lots, they can undercut the used car dealer or auction house by a few percent per vehicle sold but Carvana is moving 100,000 cars a quarter so $500 profit up front and $1500 in interest over the 5 year loan. They're making huge amount of money yet still operating at a loss thanks to their venture financing.

I would guess their long term model is to make money on the financing and not on the cars, whereas a traditional dealer needs to make money on the cars. Basically the same model as mortgage originators but making their own market with cars.

Long term, you wonder if manufacturers will just offer shipping direct to consumers and skip the whole dealer model. Cheaper prices for customers, and dealers could transition to simply service centers and used car lots.