Ready to buy a used car, but hate going to a car dealership?
Carvana, a company that buys and sells used vehicles online, allows customers to avoid the dealership by using its website to buy, finance and schedule delivery of their next car. The company announced it is launching in Tampa this week.
Carvana, which began in 2013, gives customers a price for a car within minutes. Its interactive website allows users to dictate their own terms for financing before completing a contract. Carvana delivers the car to the door, sometimes by the next day.
The Phoenix-based company recently moved into Orlando and Jacksonville, and has been expanding aggressively nationwide since it launched in Atlanta and later in Nashville, Birmingham, Ala., and Charlotte, N.C., said Carvana co-founder and chief brand officer Ryan Keeton.
In some markets, such as Nashville and Atlanta, customers can pick up their car at Carvana coin-operated vending machines. Cars are stocked in glass buildings and customers are given a coin that will retrieve their specific car and release it. While there are no plans for a Tampa-based vending machine just yet, Keeton said the company is on the fast track to expand in Florida.
All cars purchased come with a seven-day test drive period during which customers can return a car for a full refund. But few do, Keeton said.
Only 4 percent of customers return their vehicles and most of those exchange it for another car, he said.
Keeton describes Carvana as the "Amazon of car buying." Like the mammoth online retailer, Carvana operates by buying and storing cars in distribution centers strategically placed across the country. A center in Georgia will stock and deliver cars to Florida markets. Carvana currently has nearly 3,000 cars for sale.
So far business has been good. In 2013, Carvana's revenue was $4 million. That jumped to $40 million in 2014. Last year, it was $140 million and the company is on track to reach $300 million by the end of 2016.
Keeton said the founders of the company specifically chose not to launch in Silicon Valley, which is a hotbed for new technology companies and home to wealthy investors, and look at midsized cities where real estate was affordable.
"We still wanted to launch in markets that had tech-forward demographics," Keeton said. "It turned out to be the right decision for us."
Contact Justine Griffin at [email protected] Follow @SunBizGriffin.