Carvana's new-car stores are routinely pricing vehicles above nearby franchised competitors, and customers are buying them faster anyway. That's not a pricing story. That's a value story.
Carvana's new-car stores are routinely pricing vehicles above nearby franchised competitors, and customers are buying them faster anyway. Catalyst IQ's analysis found Carvana priced eight models above local competitors between May 7 and Aug. 5, including the Ram 2500 at an average $4,533, or 6.2%, higher than the market.
📊 The Numbers
Model | Premium vs. Local Market |
|---|---|
Ram 2500 | +$4,533 (6.2%) |
Ram 1500 | +$3,449 |
Jeep Compass | +$1,528 (4.3%) |
Jeep Grand Cherokee L | +$1,477 |
Carvana's seven new-car stores posted an average 69% turn rate over that period, versus 39% at competing CDJR stores. Its Boston location hit 107%, meaning it sold more inventory than it carried on average.
Want the full conversation?
🎙️ Listen to today's Automotive State of the Union episode for the complete discussion.
The Line That Explains the Whole Thing
Carvana is doing nothing special. They're just doing everything simple.
Carvana hasn't introduced some new competitive weapon. No-haggle pricing, no doc fees, a seven-day money-back window, same-day delivery. [Those] have been the offer for 13 years. What's changed is that new-car buyers are now getting the same offer used-car buyers have had all along, and they're responding exactly the way used-car buyers did.
Paul framed it as a pattern repeating itself: Carvana forced the used-car business to evolve once already, and this is that same forcing function showing up in new. [When] it was used cars, there was always an asterisk. Well, but it's used cars. Now that the model is producing the same results in new, the asterisk is gone. It's evidence that this is what the customer actually wants, not a used-car quirk.
Brian Maas, president of the California New Car Dealers Association, put the appeal in five words: do you want the car, here's the price. That's not a discount pitch. It's a certainty pitch, and certainty is apparently worth over four thousand dollars to a meaningful slice of the market.
The value prop hasn't changed. The customer has.
Carvana isn't winning because it's cheap. It's winning because it's predictable, and predictability is a feature buyers are willing to pay a premium for. Worth asking plainly what your own process communicates in the first five minutes: certainty, or an invitation to negotiate. Carvana's turn rates suggest which one closes faster.
