Carvana CEO Ernie Garcia thinks there is good news ahead for people who have been shocked by the high price of used cars.
Garcia gave an exclusive forecast for the state of shopping for cars, saying that prices are declining and more potential interest rate cuts should make cars more affordable.
Garcia discussed the future of the used auto market in an interview with the Associated Press.
Garcia said prices for used cars have been decreasing over the past two years and are expected to continue trending down.
"There are seasonal times around tax season in February and March, or around return to school in August, where prices can go up a bit," Garcia said. "But generally around this time of year, they're going down."
He acknowledged that prices aren't at pre-pandemic levels but attributed it to inflation.
"During 2022 and 2023 and even early 2024, car prices were still higher relative to other goods and services than they were pre-pandemic," Garcia said. "So now car prices are similar relative to other goods and services to where they were pre-pandemic. But there's no question car prices are higher in nominal terms, even though they're somewhat similar in inflation-adjusted terms."
In 2013, Carvana disrupted the used car market with no-haggle pricing and an online buying process that cut out the middleman.
Carvana has sold and bought more than four million vehicles claiming to save customers about $1,000 compared to a traditional dealership.
The company credits this to having less overhead such as not needing large, expensive real estate holdings.
Headquartered in Tempe, Arizona, Carvana offers a seven-day return policy, online financing and flexible shipping.
Garcia's predictions come during a crucial time for car buying. A recent survey showed that more than half of consumers expect to work more hours or get another job to afford their next car.
This news comes on the heels of Donald Trump suggesting putting 2,000 percent tariffs on imported cars.
Last year, Amazon announced that it would start selling cars in 2024 with Hyundai vehicles being its first client.
In 2022, Carvana laid off nearly 1,500 workers after declining sales and stock shares tanked.
