Skip to main content

Is Carvana going out of business? The ‘Amazon’ of cars tumbles

A Carvana bankruptcy might just be inevitable

Carvana was once heralded as the future of the car-buying process. Shoppers could go online, see detailed pictures of the car they wanted to buy, complete the purchase online, and then head to one of the company’s trendy car vending machines to pick up the vehicle. Or buyers could have cars shipped to their door. Carvana boomed during the pandemic, as shoppers with loaded pockets from economic impact payments looked to take advantage of incredibly low interest rates and a no-contact method of purchasing a car. Unfortunately for Carvana, things have changed drastically since the start of the pandemic, causing its stock to plummet.

The pandemic created the perfect storm for Carvana to succeed. People had extra cash on hand, low interest rates allowed people to get a lot more for their money, and people wanted to purchase a used car without actually visiting a dealership. Being one of the first to offer an Amazon-styled way to purchase a vehicle, Carvana was at the right place at the right time and grew.

Black Hyundai Sonata sedan being towed on a Carvana truck in Chicago.
Carvana

While the pandemic isn’t exactly behind us, Carvana doesn’t have the same prosperous tidings it once did. Used car prices are dropping rapidly, especially luxury vehicles, which appear to be in free fall, interest rates are high, and nearly every dealership (including Carmax) offers some kind of way to purchase a car online. Plus, there’s talk of a recession, though with inflation, we’re practically already living in one. The abrupt way things went back to normal has caused Carvana’s stock to tank, as it’s down nearly 97% from a year ago. On December 1, 2021, Carvana was trading for nearly $282, while the stock now sits at $8.23.

Recommended Videos

A large 44% drop came right after Carvana released its quarterly results at the beginning of November. The company’s third-quarter results were pretty bad, as Carvana’s revenue fell by 2.7% year-on-year. And the company’s net loss increased to $283 million compared to $32 million in the third quarter of last year, reports The Street. For a company that’s trying to grow, these figures are signs that the company is heading into a bad spell, especially as used car sales continue to fall.

If things couldn’t get worse for Carvana, the company recently announced that it would lay off 1,500 employees or 8% of its workforce. This comes after the company cut 2,500 jobs earlier this May. In an email to employees, Carvana CEO Officer Ernie Garcia told workers that there were a few factors for the layoffs. “The first is that the economic environment continues to face strong headwinds and the near future is uncertain. This is especially true for fast-growing companies and for businesses that sell expensive, often financed products where the purchase decision can be easily delayed likes cars,” said Garcia. As the CEO put it, Carvana “failed to accurately predict how this would all play out and the impact it would have on our business.”

It’s hard to say if Carvana will go out of business, but Morgan Stanley, via Business Insider, stated that the company’s stock price could fall to $1 as used car prices and sales dropped at the beginning of November. But with everything that’s going on with the auto industry and the fact that the company is facing legal challenges from issues pertaining to registrations and titles with purchased vehicles, Carvana looks like it has an uphill battle.

Joel Patel
Former Freelance Writer
Joel Patel is a former contributor for The Manual. His work has also been featured on Autoweek, Digital Trends, Autoblog…
The Porsche 911 just became the fastest manual transmission car in history
GT3 Porsche 911 is the fastest stick shift car in the world
the porsche 911 just became fastest manual transmission car in history gt3 3

A Porsche 911 GT3 with the Weissach Package just smashed the record for the fastest lap by a manual transmission production car at the famous Nürburgring in Germany. The GT3 sits atop one of the most prestigious bloodlines in all of the autoverse, and is heralded for being one of the last supercars equipped with a tried-and-true manual transmission. This top-tier 911 just ripped around the 12.94-mile 'Ring in a record-shattering 6 minutes and 56.294 seconds.

This record run happened on a gorgeous, sunny day with perfect weather—54 degrees in the air and 80 degrees on the asphalt. Those conditions were ideal for getting great grip on the tricky track. Porsche made some solid upgrades to the car’s chassis, which helped it handle curbs and bumps much better. They also tweaked the gear ratios to be shorter, so it could send power to the rear axle quicker, boosting acceleration out of corners.

Read more
The Porsche 911 is the best investment you can make in a new car
Porsche 911 is the best investment for a modern sports car
Porsche 911 GTS

Porsche 911 owners are sitting pretty when it comes to making a smart investment in their cars, according to a new study from iSeeCars, a used-car search engine. They found that the iconic German sports car has the lowest five-year depreciation rate of any vehicle around. The study looked at over 800,000 five-year-old used cars sold from March 2024 to February 2025 to gather its data.

The 911 not only topped a list of 25 cars with the slowest depreciation but also showed an average dip in value of just 19.5 percent over five years, which is an average MSRP difference of $24,428. Plus, Porsche's 718 Cayman came in at a close second, losing 21.8 percent in value during the same period. Rounding out the top five are the Toyota Tacoma (26 percent), Chevrolet Corvette (27.2 percent), and Honda Civic (28 percent), all of which hold their value better than many others.

Read more
F1 Arcade keeps the party going with Philadelphia opening date
F1 Arcade patrons compete with high-end Formula 1 racing simulators
F1 Arcade new Philadelphia venue.

F1 Arcade is about to open its third U.S. location in Philadelphia. The Boston and Washington, D.C. facilities opened in April and October 2024, respectively. F1 is building on the growing popularity of elite motorsport with multiple high-end F1-related venues, including the world's largest F1 Arcade in Las Vegas, opening later this year.

F1 Arcade patrons can compete with state-of-the-art Formula 1 racing simulators in a setting with high-end dining, curated unique cocktails, and socializing with other F1 fans. The new F1 Arcade at 1330 Chestnut Street opens May 29.
Why is F1 opening sports bars?

Read more