The Intersection 4-24-22

Some phrases immediately make a dealer’s skin crawl.

“You’re not getting any more allocation until August.”

“We’re launching an exciting new facility image program.”

“Here’s how much all the EV chargers you need are going to cost you.”

“Carvana is about to open down the street.”

For a while, Tesla was the big name that dealers worried about upending their business. These days, Carvana keeps many awake at night, too.

The glass-walled “vending machines” popping up in commercial districts around the country represent yet another obstacle in dealers’ efforts to keep their used-vehicle lots populated with enough inventory.

Now, Carvana is about to take over auction sites that many automakers and dealers use to offload customers’ trade-ins and lease returns. And that has a lot of them looking for alternatives in order to avoid providing a revenue stream to the enemy, as we explain in a story on Page 1 of this week’s issue.

Carvana’s pending acquisition of ADESA U.S., expected to close in May, would give the online used-vehicle seller 56 additional sites where it could inspect and recondition incoming inventory. Adding those locations would give Carvana a presence within 200 miles of 94 percent of the U.S. population.

That’s near ubiquity for a company that many consumers had never heard of until fairly recently.

It’s logical that automakers — some of which are starting their own used-vehicle retail platforms specifically to ward off Carvana — and dealers wouldn’t want to give the company business, just as any other retailer in town wouldn’t want to direct its customers to Amazon or Walmart.

Of course, that doesn’t make Carvana just go away. Finding new ways to make buying and selling vehicles simpler and more profitable is key to keeping such challengers at bay. Many dealers are doing just that —and realizing that they might as well not help fund one of the interlopers at the same time.

— Nick Bunkley