Carvana opening car 'vending machine' in North Texas, selling used cars online
Texas car dealers are stepping up their efforts to sell new and used cars online — giving customers a way to shop for a vehicle without enduring the headaches of negotiating a deal in a showroom.
At least 20 Texas car dealerships, including Classic Chevrolet of Grapevine, are partnering with tech company Joydrive to offer prospective customers a way to buy their next car, arrange financing and have the vehicle delivered to the customer's home or work place. All of that can now be done without stepping foot in a dealership — no glad-handing, no salesman trying to stop you from getting away.
The move comes a couple of years after Carvana began to make serious inroads in the car sales business by selling refurbished used cars online, delivering them to customers and even driving off with the customers' trade-ins. In some markets, including Dallas-Fort Worth, Carvana customers also have the option of picking up their vehicle at a giant building that resembles an oversized vending machine.
At the Carvana location in Frisco, for example, customers can ceremoniously place a coin in a slot and have their car brought to them by elevator from one of the eight levels of the glass structure.
In Texas, the partnership with dealers includes not only the immediate Dallas-Fort Worth area, but also Abilene, Paris and Waco.
And, in lieu of a test drive, the Joydrive program offers buyers a chance to return their purchase within five days for a refund (as long as no more than 250 miles have been driven).
"Other dealers are selling cars today the same way they sold them 40 years ago, even though the world has transformed and many consumers clearly want an alternative,” Bently Durant, Classic Chevrolet chief operating officer, said in an email. “We are giving consumers what they want, with our same stamp of quality and care by partnering with a company that has designed an easy, transparent and mobile-friendly solution.”
Hunter Gorham, founder of Seattle-based Joydrive, said research shows customers want a change from the old model of haggling for a car at a dealership.
"The data clearly show that customers want a different purchasing model. Less than 1 percent prefer the current car buying process," he said.
Joydrive is in North Texas and Seattle, and aims to be operating nationwide by the end of the year. It has a goal of stocking an inventory of 50,000 to 100,000 cars by the end of the year, compared to about 12,000 for Carvana, according to AutoNews.com.
Here's how the online buying process works:
Customers typically identify a car they want and make a $500 refundable deposit. An online program guides them through the process of trading in their old vehicle, arranging financing and scheduling delivery of their new car.
About 40 percent of Joydrive transactions involve a trade-in and 60 percent include financing, according to a company news release.
Delivery typically takes one day.