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Carvana Grew Into a Used-Car Titan. Its New-Car Sales Project Has Dealers Rattled. — WSJ
Carvana Grew Into a Used-Car Titan. Its New-Car Sales Project Has Dealers Rattled. — WSJ
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By Christopher Otts | Photography and Videos by Rebecca Noble for WSJJoshua Higginbotham, a 43-year-old dad in the Kansas City area, swore off buying new cars from Jeep-Ram parent Stellantis after a few bad experiences at the automaker's franchised dealerships — including losing a $500 deposit for a Dodge Challenger he didn't buy."I don't want to spend a whole day in a dealership, and they always like to make it take an entire day," Higginbotham said.But Higginbotham recently changed his mind, buying a brand new $51,000 Jeep Wrangler in a bluish-gray color called anvil. This time, he didn't have to leave his living-room couch.He bought his new Jeep from a dealership more than 1,000 miles away that is owned by used-car giant Carvana. The Tempe, Ariz.-based company is testing whether its digitally focused playbook can work in the more tightly regulated world of selling new cars, where politically powerful dealers run the show and state laws protect their business model.Carvana's expansion represents the latest in a number of challenges to the traditional way new vehicles are sold in the U.S. Amazon.com, in partnership with old-school dealers, is also trying to sell new cars on its website. Scout, a new automaker backed by Volkswagen, is trying to go around dealers altogether by selling directly to consumers like EV-only players Tesla and Rivian.Millions more used cars are sold each year than new cars. But the money is in the new-car market, where prices are higher. U.S. consumers spent about $655 billion on new cars in 2025, compared with $524 billion for used cars, according to an analysis by Cox Automotive.For Higginbotham, a supervisor at a federal agency, paying a $1,290 fee to get the new Jeep shipped to him from Arizona was well worth it to skip a trip to one of the dozen Jeep dealers in the Kansas City area."I'm sure I could've gone into a dealership, got some more gray hairs, and negotiated it down to whatever Carvana had it at or lower, but I'm not going to do that to save $1,000 or even a few thousand dollars," he said.Getting into the new-car game required Carvana to become a dealer itself.Carvana acquired the Casa Grande, Ariz., dealership about a year ago from another dealer group. It has since turned the small store on the outskirts of Phoenix into the top-selling Chrysler, Jeep, Ram and Dodge dealer in the U.S. as of April, according to Stell...