FTC is a U.S. government agency that looks out for consumers and tries to prevent unfair business practices. If the FTC is involved, it can mean rules or investigations that change how car companies sell and market vehicles.
Slate is a company being talked about as an EV-related product that’s getting a lot of attention. The hosts are suggesting Carvana might partner with it to help it grow faster.
Jeff Bezos is a famous tech entrepreneur and investor. In this segment, he’s mentioned because his backing is seen as a vote of confidence for the EV company being discussed.
Lordstown Motors is mentioned as an example of an EV company that failed quickly. The point is to contrast it with the current situation being discussed, implying this new effort may be different in structure or prospects.
Carvana is a company that sells cars online, especially used cars. The hosts are saying Carvana could help another company grow faster by partnering with it.
A used car is a car that someone owned before you. The hosts are talking about how many used cars Carvana sells and whether it could sell lots of new cars too.
Person
Ernie Garcia III
Ernie Garcia III is a business leader associated with Carvana. The hosts are basically saying this is a big-name, high-stakes partnership.
This means a big dealership company that’s owned by investors and listed on the stock market. The host is asking whether those large groups might start making cars themselves instead of only selling them.
The host is talking about a dealership company going beyond selling cars and trying to make cars (or its own branded offerings). It’s a big business-model change, not just a new way to advertise.
Penske is a big business in the auto world. The host is bringing up Penske’s history to suggest that large companies sometimes look at making their own products, not just selling cars.
Saturn was a car brand that eventually got shut down. The host is using it as an example of how big companies sometimes try to step in when a brand collapses.
This just means the general group of people who might want to buy cars. The host is saying current pricing and choices make it so most people feel like they can’t realistically buy.
Concept
13 to 15% of the population
The host is throwing out a rough number: they claim only a small slice of people (around 13–15%) are actually buying cars. The argument is that the rest feel left out, so a new approach could capture that bigger group.
This sounds like the speaker is talking about Stellantis, a big car company. They’re comparing the size of traditional automakers to Carvana’s influence in the car-buying market.
“Direct to consumer” means the car is sold straight to you, not through a traditional dealer network. The hosts say laws in some states are making this easier, which can change how car buying works.
Amazon is referenced as a non-traditional player trying to influence the auto space. The segment suggests Amazon has a role in car buying, but not necessarily as innovative as Carvana’s approach.
Root Insurance is an insurance company mentioned as part of Carvana’s business. The hosts are saying Carvana is expanding beyond selling cars into related services like insurance.
An AI agent is like a smart assistant that can do tasks for you. In this case, it’s meant to help with car shopping—finding options and helping you move through the process.
CarEdge is a company that’s trying to use AI to help you shop for a car. Instead of you doing all the searching and comparing, the AI agent helps do that work for you.
A “disruptor” is something new that shakes up an industry. In this segment, it means companies that could change the usual dealership-style way of buying cars.
A deposit is money you pay upfront to hold something or start a deal. In car shopping, it can be used to reserve a car, and losing it can be a big deal for buyers.
A franchise dealership is a traditional car store that sells a specific brand’s cars under an agreement with the manufacturer. The segment uses it to explain why some buyers may be unhappy with the usual dealership experience.
Toyota is a major car brand. The host is using it as an example from the 1960s to compare how a new approach can start simple and still change the market.
Here, “customizing” just means choosing options or changes for the car to match what you want. The point being made is that the base car stays affordable, but you can still personalize it.
The Ford Bronco is a type of SUV designed to handle rough roads and off-road trails. It’s made for drivers who want a vehicle that can go beyond normal pavement. It may be mentioned in the context of how much it costs or how capable it is.
Mini is used as an example of a brand that leans into personalization—offering many choices for things like interior and paint so buyers can “make Mini yours.” The host contrasts that approach with most manufacturers’ more fixed option sets.
Mass market just means regular, everyday car buyers—not a small group of enthusiasts. The hosts are saying the current system doesn’t work well for those mainstream shoppers.
Black Book is a company that provides pricing information for cars. In this discussion, they’re used to support claims about whether used-car prices are changing.
"Market day supply" is a way to measure how many cars are available compared to how fast they’re selling. If there are lots of cars sitting around, it can push prices down; if cars are scarce, prices tend to stay higher.
"Days to turn" is basically how many days it takes a car dealer to sell the cars sitting on their lot. If it takes a long time, it usually means sales are slower and dealers may have to adjust prices.
"Buy here, pay here" (often abbreviated as BHPH) is a financing model where the seller finances the purchase directly and collects payments from the buyer. It’s commonly used for customers who may not qualify for traditional bank or credit-union auto loans.
“Days on the lot” means how long a car has been sitting at the dealership without being sold. If it’s been there a long time, it often means the price or demand isn’t great, and that can open the door to a better deal.
They’re talking about how much the dealer would lower the price. Even though the car had been sitting for a long time, the discount was only about $300.
They mean the dealer wasn’t willing to lower the price much, even though the car had been sitting. Sometimes you’d expect a bigger discount, but the dealer still won’t move.
This is a way of grouping cars by how long they’ve been sitting unsold. The longer a car sits, the more likely it is the dealer may eventually offer a better price to get it sold.
The Ford Bronco Sport is a small SUV. Here they’re saying you can sometimes pay the price of a cheaper version of a newer model, but get a higher trim on the previous year.
LIVE
It's noon here in Venture City, New Jersey, and our nation's capital, Washington, D.C.,
and this is Carage Live for Friday, June 5th with your host, me, Ray, hanging out in my
living room where I always hang out, and losing my voice, and Zach hanging out of this office
in Washington.
How are you today, handsome, feeling better?
I hope.
I am feeling better.
Thank you so much.
Pop's, your voice is interesting today.
It is indeed.
Yeah, it's there.
It's not there, but hopefully you keep feeling good.
Today's show, folks, is brought to you by CarEdge.com, a friendly reminder for those of you that
are unfamiliar.
For the past six years, me and my dad and our incredible team have been providing car
buying services, a car research platform, and so much more back at CarEdge.com.
If you're in the market to buy a car, you know someone who's in the market to buy a
car, please try using our car search, our car buying service, research, dealer reviews.
Have so much fun with the dealer reviews, insurance, warranty, and so much more.
Check it all out back at CarEdge.com.
Now, Dad, the big story we're going to talk about this morning is Carvana, because you
know what?
They've been putting the auto industry on alert for a while now.
It was a couple of weeks ago that the Wall Street Journal wrote an article, Carvana grew
into a used car tight, and its new car sales project has dealers rattled.
Well, now, Dad, just a couple of weeks later, Carvana is getting even deeper in the new
car business.
You can see this headline from CarScoops.
Carvana may have a foot in on Bezos' slate auto already.
Slate auto is Jeff Bezos' direct-to-consumer, but maybe not vehicle company, and Dad, Carvana
is now in the business of potentially selling slates to customers, or at least their investors
in the company, Invisoversa.
This is fascinating what's going on here.
Carvana and Slate are getting into bed with one another.
You can see it right here.
Slate recently raised $650 million in a series C fund raise, and Carvana has warrants to
buy shares in that startup.
Is this the future of the auto industry?
Dad, are we watching new car dealerships get dismantled in real time with startup companies
that have totally different operating models and, quite frankly, products that consumers
want, what Slate has promised is what consumers say they want from a price standpoint, and
a buying experience that is, quite frankly, revolutionary relative to normal car dealerships?
This feels like it could be a huge moment for the retail car business.
It seems as if they might be onto something.
Let's face it.
Between Carvana and CarMax, they sell nearly 2 million used cars annually between them.
The reason they attract the customers they do is the ease of doing business.
The price that's advertised online is the price that they pay for, and in many cases,
both CarMax and Carvana are able to provide financing solutions that perhaps others may
not be able to.
The ease of doing business, the fact that there's no real games to be played, there's
no game and ship involved, and they're selling 2 million vehicles, yeah, that's a wake-up
call for the industry.
The other wake-up call for the industry is what we spoke about yesterday with what the
FTC is doing.
This feels different and deeper, though, Deb, because they're now partnering to a degree.
I mean, they're going to have equity, or at least the option to get equity, in one of
these companies that is incredibly, it has a ton of interest.
I mean, Slate has a ton of interest.
Jeff Bezos is backing it.
The product that they've presented to the market has garnered tons of headlines.
What were some of those EV companies that went out of business really quick?
This is not Lordstown Motors.
This has a different feel to it, and this is not related to the FTC.
It is a little bit related, obviously, to your point, around 2 million use car sold,
but they could be selling 2 million new cars soon if Slate blows up and Carvana is part
of the reason why.
Well, I almost am amazed that Jeff Bezos would get in bed with Ernie Garcia III and Carvana,
but perhaps he sees it as a way to more quickly scale Slate.
Perhaps.
I don't know.
That's got to be the plan, Dad.
Carvana took what was it, eight Chrysler Dodge Jeep Ram dealerships and became some
of the top volume CDJR dealerships in the country.
Now they're partnering up with a potentially much better product, at least from a price
point perspective.
This, to me, has the alarm bells ringing for the auto industry.
Like, holy cow, there's a legitimate competitor here that could change everything for how
we do business.
So, do you think, then, that perhaps every large publicly traded dealer group will become
its own manufacturer of product as well?
No, I think that's what's unique here to Carvana.
They're the only ones that are doing these innovative things.
Regardless if you like them or you don't like them, you have to really respect the way that
they're innovating in the space.
No, I don't think Penske is going to come out and say, now we're selling what's another Slate
Auto, you know, I don't think that's...
Well, I wouldn't necessarily say that because when Saturn went under, Penske was in negotiations
to take over Saturn and become the manufacturer of Saturn.
So, this is something that Penske explored in the early 2000s when Saturn was shuttered.
Further validates that this is like a concept that has been toyed around within the past?
Well, it validates that there's a need, okay?
And I think we're all in agreement that there's a need.
Manufacturers, for the most part, have gotten out of hand when it comes to what it is they've
decided to build and how it is they've decided to price it.
And they have taken the vast majority of the buying public out of being buyers.
So, I mean, we talk about it all the time, you know, they're selling vehicles to 13 to 15%
of the population out there.
Slate would appeal to the other 87 to 85% of the population that feels as if they can't participate.
So, from that perspective, yes, this could be earth shaking, this could be industry shattering.
This could be something that could cause the manufacturers, the present manufacturers,
the largest ones, to reevaluate what it is that they do and how they do it.
That's exactly what I'm saying, yeah.
Yes, but my suspicion would be is that you could take Stalantis, General Motors,
you could take Ford, you can combine their market values and it still won't add up to
Carvana's market value, which would suggest to me that even if these major manufacturers,
legacy manufacturers, would want to reevaluate what it is that they're doing and how they're
they won't have the finances to be able to make that happen.
We got to do a quick fact check on my dad, which I never love to do. GM is currently worth $74
billion. Yes. Ford is currently worth $60.59.41 billion.
Call it $60, so we're at $134 billion.
And Carvana is only worth a measly $72.
Oh, okay, I'm wrong.
No, just giving you some context there, but I do think this is one of the most
timely and aggressive periods of innovation in the car buying process that we've seen in a long,
long time. There's legislation in many states for manufacturers to sell direct to consumer.
There are companies like Carvana, which have historically been just used car dealers that
are now these incredibly successful new car dealers. You've got Amazon playing a role
in the auto space, not doing a ton and nothing necessarily that innovative to you and I,
but it's Amazon for goodness sake. We've got the FTC putting pressure on dealers.
This decision by Carvana to now, I mean, and to be clear, Carvana also plays already in the
insurance space with the root insurance. So like, I don't know, I can just see the whole world of
car buying changing materially here. And it's because there are a lot of winds of change right now.
And quite frankly, Carvana is leading the way with a lot of those. And this decision to work
with Slate in this way, I think is indicative of that. I think not to be self-serving, but I
think you forgot to mention one other company. And that would be CarEdge with their AI agent ability
to be able to shop on behalf of people. There are those in the industry, those who run dealerships,
who look at what it is that we've developed. And they're thinking, okay, we need to get on
board with this because there is going to be a growing percentage of car buyers who this is
how they're going to shop. So yes, Carvana and Slate could be disruptors or disruptors.
Yeah, yeah, they are. I mean, what they're doing right here, Dad, to me is
like potentially monumental game changing for how cars get bought and sold. But I do appreciate
you talking about what we're building to. It makes me really proud.
Could put us out of business.
I'll think about that for a second. So let's explore that for a minute, Dad.
The reason that Carvana has had so much success selling new cars thus far,
it's documented incredibly well in this Wall Street Journal article. It's literally the first
couple paragraphs here, if I'm not mistaken. Yeah, it's talking about this guy, Josh,
who swore off ever buying a Dodge product again because he lost his $500 deposit and had a few
bad experiences at their franchise dealership. He then bought a Jeep from a Carvana dealership
a thousand miles away. All right. And this was a new one and he bought it from Carvana because
it was so great. And then there's other anecdotes in this article from the Wall Street Journal that
talk about dealers feeling the pressure being rattled. At the same exact time, we have an
affordability crisis unparalleled to any other time in history. Slate Auto is incredibly well
positioned. Now, that being said, have they increased their prices a little bit? Yeah. But
are they still going to be significantly lower? And are those vehicles going to be similar, Dad,
to what Toyota did when they first came to this country in the 60s? Simple vehicles,
get you from point A to point B. This has huge potential to disrupt car edge, to disrupt
everything. I mean, if they can actually get-
Hang my hat on. Yes. It's not all going to happen overnight and it's a massive market,
but it's a huge- I know. I know I use shock all the time, but it's a wake-up call. It's a wake-up
call for everyone in the auto industry, I think. No, I agree with you. And we thought Slate was
a little bit of a wake-up call because it's just as basic a vehicle as you can get. And then you,
as the customer, can start adding things and customizing it any way you want. But the
initial pricing of it is going to be so relatively inexpensive to its competitors and its peers.
And the non-complicated nature of what it is that they're offering will be completely different
than what everybody else is. And yes, there's a big portion of the population that would welcome
that, that needs that. And we've said for a couple of years now, if somebody would just
start producing a basic type of transportation that is reasonably priced, people will jump for it.
And, well, here's what we're looking at. It is as basic a vehicle as you can get,
okay? And that's the whole concept behind it. And then you do whatever the hell it is you want to do
to it. It's not like you're going to start and become a Bronco Philson, okay? If you can run a
slate vehicle up to $70,000, then you've done something wrong in life, okay? Because the whole
concept is not to be able to do that. The whole concept is to make it inexpensive, affordable,
and customizable. You know, one of the things when I was at Mini, the whole concept about
Mini is that you can make Mini yours in the sense that there's like a million different ways to
build a Mini between an interior, paint colors, this and that. And most of the manufacturers
build vehicles a certain way. And there's, and it's like for 94% of buyers out there. And the other
6% that really want to be able to customize a vehicle the way they want it, their choice is a Mini,
or in the future it will be slate. And, you know, I can almost see the marketing campaign. Slate
trucks, the slate is clean. Do with it what you will. Color however you want to color. Get your
Crayola color box and do whatever it is you want to do to that vehicle. And that will appeal to
people. Now, if you combine that with Carvana and their willingness to ship vehicles all over the
country, then my God, what could happen? How quickly could this start up? My guess would be
that demand would far outweigh supply because they would be unable to keep up with what
their customer base would want. Yeah, I also share the same sentiment. I think this could be the
beginning, which should be clear. I think it's still probably a year plus away, maybe two years away.
But dad, this is the beginning of a new way for automakers to distribute cars in the United States
that used to be the only way to do it was to go through all the big franchise dealerships. Well,
now there is a big new franchise dealership and their name is Carvana. And they have a totally
different business model. They have a totally different customer experience. And you know what,
if you're a startup and you want to sell your car as the United States of America, now Carvana
is an option potentially. At least that's what this funding starts to paint the picture of what
the future could look like. This could be your distribution model. And slate's not coming into
the market with some low volume, super upscale Bronco Philson, like you mentioned. They're
coming in with something that should be affordable to anyone. So yeah, I'm pretty interested over
here to observe what's going to happen. And again, it comes on the heels of all these other big
strategic decisions that Carvana has made, which has led them to become one of the highest volume,
or own the highest volume, excuse me, Chrysler Dodge Jeep Ram dealerships in the United States.
That's no small feat. No, well, it's not a small feat. And to be able to do it in as
short a time span as they've been able to do it. I mean, there are many well-established,
high-volume CDJR dealerships out there. And for Carvana to challenge them as quickly as they have
shows, at least in my mind, that this system, as we know it, is broken, which is something we've
been screaming about forever for, I don't know, like six years, as to how do you change the system
so that it isn't broken and it's more appealing to the mass market out there. And apparently,
Slate and Carvana are figuring out a way to do it sooner rather than later.
You know, we just, I guess we just have to jump on board. But until they get really cooking with
gas, you know, we need to be out there helping people save money, shop for cars in a different
manner, where they can have their lives, they can mule it, they can do everything they want to do
with their life, why their AI agent is... Dude, what's gotten into you? You're selling more than I
sell. Because we're different, okay? I'm sorry, but there's nothing else out there that does what we
do, okay? And, you know, we have a loyal following and a loyal base of viewers. And I would think that
one of the reasons is because we're different from everything else and everybody else out there.
So, yeah, you know, why shouldn't we promote what we do that differentiates us from everybody
else? I mean, the whole concept of what we've been doing for six years was to level the playing
field, to become customer advocates for people out there and develop new ways for people to
be able to shop for cars that makes their life easier. Who else is doing that? Who else has
provided them with this opportunity to utilize an agentic tool that will allow them to be able to
shop for a car while they're at their son's or daughter's soccer practice, for goodness sake?
I just thought we had roles, man. Why wouldn't you want to be standing on the rooftop screaming
that every day? I'm on you. I'm the salesman. You're supposed to be, you know, the...
I'm talking head. It says so right there. Go founder and talking head. I don't know who approved that.
All right. We got one other thing we should spend some time on today, dad, which is the
use car market. We'll just talk about it briefly here. Use car prices ticked back up just a little
bit year over year, 3.6% increase for the month of May. So, yeah, we have use car prices still
elevated, ticking back up just a little bit for the most recent month. That's too surprising
to hear that, right? Well, I don't know. You know, this is the time of year when historically,
this is when we start to see wholesale values decline a little bit, and we are seeing that,
you know, looking at blackbook data. Yeah, but the nannies, Adela. It's just, it's the tiniest
little bit that you could hope to imagine. But, you know, I honestly firmly believe that use
car values are going to remain elevated for years to come, because there's still that ongoing shortage
of two and three-year-old younger, lower mileage vehicles that are in decent or better than decent
condition. And, you know, as the average age of the vehicle, as vehicles on the road increases,
which is up to about 13 years is the average age today. It just shows that there seems to be no
end in sight as far as when vehicles ever become affordable again, whether it be on the new car
side or views car side. Something like Slate could change that, where people, if you can honestly
be able to get a base Slate pickup truck for like $25,000, $26,000, how will that impact
the use car market? Would that finally help to bring use car prices down again, because
there is a major new vehicle player that would allow them to be able to get a brand new vehicle
and not have to look at a pre-owned vehicle? Perhaps.
Yeah, I do think that's part of the equation here, but it is interesting. I know the Blackbook data
shows the Slate decline and use car prices. Yeah, but the Cox Automotive Mannheim data
shows prices up just a little bit. Even the Blackbook data shows that the market day supply
and days to turn. I think days to turn, which is how long it takes an average dealer to turn
their inventory, is 33 days, which is nothing. We sit here on a daily basis and we talk about
dealers that have vehicles that have been sitting on the lot for 180, 300 days, whatever it is,
and use cars on average are turning every 33 days. That's significant.
That also contributes to the shortage. Let's come back to the chat, Dad,
from Malkov. Thanks for this. Thank you.
Carvana is not in the business selling cars. They're in the business of selling loans.
They're aiming to be the ultimate buy here, pay here of the internet.
Well, yes. I've said it before, pun intended, the vehicle that they use to be able to sell
loans is well-selling vehicles. Yeah, they want to be loan originators. That's why
one of their growth strategies has been to make it easier for more people to be able to qualify
for a car loan through them than through other sources. That is part and parcel of their growth
strategy is when somebody else can't get you in that car loan, Carvana will. Then we're going to
sell that to somebody else and they can worry about it. We've got it from Rich. Thank you, Rich.
Check out the Cord automobile way ahead of its time. Keep rocking, guys.
If I remember correctly, when we went to the Dearborn and we went to the Ford Museum,
I believe we might have seen a cord. They might have had one on display when we were there.
If I'm not mistaken. Bear with me. We are. We're going nowhere. We're waiting right here for you.
Dang. 1937. Yeah. We're looking. Yeah. Yeah. You would have been pleased to drive that.
You would have looked pretty cool. Dang. Really, really good looking. Yeah. No.
In me, I would have loved driving it with the top down and the wind blowing over my hearing
age. Yeah, that would have been perfect. Wow. Good looking. Well, we appreciate that, Rich.
Dad, there was one other comment here I wanted to pull up earlier in the show from Steve. Talked
to my local Mazda dealer. They have a car that's been on the lot for 165 days and would only budge
300 bucks off the price I laughed. This is crazy to me. Well, what car was it? When you say they
would only budge 300 dollars off the price, had they already discounted the price and how much
had they already discounted it before you asked them to discount it more? We need more information
than that. Yeah, but I do think it's surprising that there are these vehicles that sit for months
on months on months and not more negotiable. I will. Seemingly. Seemingly. With the amount
of information we have, seemingly not more negotiable. I would suggest that if I was
running that dealership, we'd still probably be having a conversation and he wouldn't have left
yet until we figured out how to have him go home in his new vehicle. But that's just me. That's
a mold school. A deal is better than no deal. Getting a vehicle off the lot is better than
not getting a vehicle off the lot. Every vehicle on the dealership lot looks better on somebody's
driveway than it does on the dealer's lot, in my opinion. Yeah, 100%. We've got here from Dale.
Thanks for this, Dale. The best used cars are Unsold 25. Unsold 25 days and over 200 days. Wait,
here we go. The best used cars are the Unsold 25s. And over 200 days, 2026 is currently you can buy a
2025 Bronco Sport Top Trim for the price of a 2026 BS lowest trim. That would be Bronco Sport
lowest trim. Bronco Sport lowest trim. Yeah, that was good. You got through it. I'm proud of you.
Yeah, well, he's right. One of the things we've always suggested to people, and when I do a lot
of the TV interviews and people, the host always asks me, well, as customers, what can we do
to get a better deal? And one of the things I tell them is, when you show up at the dealership,
tell your salesperson to go talk to the sales manager and ask the sales manager
what the oldest vehicle and inventory that you would be interested in that they have. And then
have the salesperson suggest to the sales manager, my customer, if you're willing to work with them,
is willing to relieve us of that aged vehicle from our inventory. Because dealers should be,
and in most cases, are motivated to get rid of their aged vehicles. Yeah, 100%.
Again, folks, from the reminder, if we can help you out with anything, today's show is brought to
you by caredge.com, back at caredge.com. We have our car search, some of the things you were just
mentioning, how long a vehicle has been sitting on a dealer's lot, for example. It'll show us right
there on the car edge car search. We also grade car dealers nationwide based on how transparent
they are. So you can see here, this particular dealership, Lindsay Ford of Wheaton gets an A
grade. You can click on that, come over here, and I can learn more about why they receive
this A grade. So I encourage you to come back to the caredge.com website, spend some time here.
You can also view their inventory, see their aged units, see other dealers near them,
and so much more. So spend some time back at caredge.com car search. And then,
they also provide car buying services. So for those of you that are interested,
we can help you out through the whole process, hand it all off to us. You can start with a
free consultation with a real human member of our team. So give us a call, 402-744-6203,
or schedule a time to talk to us and meet some of the incredible people on our team
who are here to help you navigate the car buying process.
Deb, let's call it a show. We're back on Monday with more Car Edge Live. Enjoy the weekend,
everyone. Yes, please do. And you, young man, you continue to get your health back to normal,
and you have a great weekend as well. Love you, guys. Thanks. Love you, too.
About this episode
CarEdge Live digs into why Carvana is rattling the auto industry, starting with a Wall Street Journal report on Carvana’s used-car growth and its new-car push that “has dealers rattled.” The hosts connect Carvana’s expansion to Jeff Bezos’ direct-to-consumer “Slate” effort, including Slate’s $650 million series C and Carvana warrants. They also discuss how online, AI-driven shopping and shipping could reshape dealer models—while used-car prices stay elevated amid a shortage of low-mileage late-model inventory.
Today on CarEdge Live, Ray and Zach discuss the latest news on Carvana. Tune in to learn more! Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com
for information about our collection and use of personal data for
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