WHAT WOULD HAPPEN TO YOUR CAR IF CARVANA WENT BANKRUPT?

Carvana is a used-car dealer developed to meet consumers’ growing demand to buy everything online, including their next vehicle. The company is famous for its massive vehicle “vending machines” where customers pick up their purchases. Despite its clever business model, Carvana has been beset with troubles in recent years. Bankruptcy rumors have plagued the company, leading consumers to wonder what might happen if Carvana went out of business.

Carvana has suffered from legal and financial troubles

Carvana offers many online tools to make customizing and purchasing a car easy. Not only does the site feature detailed search options so shoppers can find their ideal used vehicle, but it also offers Kelley Blue Book valuations and a seven-day/400-mile “love it or return it” policy if consumers aren’t satisfied with their purchase.

Despite those customer perks, Carvana is struggling financially. Although the company performed well during the COVID-19 pandemic, it has seen a plummet in revenue over the past two years. According to a December 2022 report by The Motley Fool, the company’s long-term debt reached $6.6 billion, and it had only around $316 million in cash and equivalents, while its net loss jumped from $68 million to $508 million.

What would happen to a customer’s car if Carvana went out of business?

It certainly seems as though things are looking bleak for Carvana. Though the company could restructure to avoid bankruptcy, it’s still possible. This outlook is causing people interested in buying cars from Carvana to have second thoughts.

However, used cars are covered by state laws, which offer protection to buyers in case of a company’s bankruptcy. Carvana offers only a 100-day limited warranty on the vehicles it sells, so customers don’t need to worry about extended warranties from a business that might not be around in a few years.

Consumers considering buying from Carvana can probably still do so without worry. Kelley Blue Book reports that the company probably isn’t going anywhere soon and likely won’t have a “going out of business” sale.

Although purchasing a car from the online retailer is presumably safe, consumers should still use common sense and ensure they obtain proof of the vehicle title before signing any paperwork. 

Carvana stock is still struggling

Related

Man Demands $1 Million From Carvana for Selling Him a Stolen Maserati

Those keeping an eye on the company’s business outlook are probably aware Carvana stock is still struggling. According to The Motley Fool, the stock price is up 157% this year but still down overall. And although the company’s operating loss improved in the first quarter of 2023, it’s still negative.

The problem with Carvana is that it’s struggling with cash flow. And if revenue continues to decline, experts note it could be difficult for the used-car dealer to ever pick up the slack.

Ultimately, Carvana could still bounce back, but the trend is worrying. However, consumers considering buying a vehicle through the company can likely still do so safely and without any long-term problems.

The post What Would Happen to Your Car if Carvana Went Bankrupt? appeared first on MotorBiscuit.

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2023-06-04T16:59:36Z dg43tfdfdgfd