The online used car giant is rolling out a disruptive operational model for its physical dealerships.
At Carvana's newly renovated new car dealership in Dallas, vehicles from Jeep, Dodge Ram, and Fiat are prominently displayed.
Key Points
Carvana, famous for its used car business, is entering the new car market with a 'Car Experience Playground' model, launching its first pilot location at a refurbished dealership in Dallas.
Carvana Co. (ASX: CVNA), which gained fame with its multi-story car vending machines for online used car sales, is now formally entering the new vehicle market with a novel business concept: the Car Experience Playground.
The Tempe, Arizona-based company unveiled its new dealership design philosophy this week, centering the entire car-buying process around smartphone use and eliminating traditional paper forms and high-pressure sales tactics.
At the Car Experience Playground, customers can sit inside vehicles, use their phones to access detailed specifications, and schedule test drives—all independently, without needing assistance from dealership staff.
"We are not here to push cars on people. We are here to show the car," said Tom Taira, President of Carvana's New Vehicle Business, speaking at the renovated Chrysler-Dodge-Jeep-Ram dealership in Dallas.
This location is the seventh new car dealership Carvana has acquired since beginning a buying spree in February 2025, all selling vehicles from Stellantis. Taira indicated the company intends to acquire more dealerships for the brand but did not comment on potential plans to secure new vehicle franchises from other automakers.
Company data shows new vehicles still represent a small portion of Carvana's overall business: of the approximately 67,000 vehicles listed for sale as of this Tuesday, only about 2,200 were new. Taira stated, "We are still treating this as a test."
Customers at the dealership view a massive display screen showing an "immersive online vehicle tour" with QR codes and images of various models; this device, called The Cube, can be controlled via smartphone to reveal all vehicle details.
The new car sales arena has long been dominated by traditional franchised dealers, protected by state laws, making Carvana's entry controversial. The company's model of online ordering, no-haggle pricing, and interstate delivery of new cars disrupts established industry norms, sparking both curiosity and anxiety among traditional dealers.
While used car sales operate under looser regulations, automakers like Stellantis impose strict facility standards on new car dealers, which cannot be met by Carvana's signature multi-story vending towers alone.
Carvana's solution is implemented at this Dallas dealership, acquired roughly nine months ago.
The showroom features The Cube, a giant screen composed of four 10x10 foot displays. After linking their phone to the device, customers can preselect vehicles of interest on the screen before heading outside to the Car Experience Playground to see them in person.
Vehicles are neatly arranged on a rubberized playground-like surface with themed settings: a soccer goal is placed next to a Chrysler minivan, and a simulated race track is set up in the Dodge muscle car area.
"It's a little bit like Disneyland," described Paul Keister, Carvana's Chief Creative Officer.
Customers scan a QR code by a vehicle to schedule a test drive. The traditional private offices used by salespeople for pricing and finance managers for selling extended warranties have been repurposed: one is styled like a living room, another contains a child's table and toy trains.
A customer scans a QR code on blue display stand number 5; all vehicles are numbered for easy location in the playground.
The dealership employs vehicle guides who, unlike traditional sales staff, do not earn commissions. Their role is to answer questions and guide customers through the online purchase process on their own phones or computers. Carvana enforces a single, non-negotiable price for vehicles nationwide.
Taira said the other six new car locations may replicate the Dallas model, with the pace of expansion ultimately depending on consumer reception.
Erin Kerrigan, head of an automotive retail consulting firm, noted the core innovation of this model is its significant reduction in staffing. With nearly half of a traditional dealer's operating costs tied to employee compensation and commissions, Carvana's per-store labor costs could be substantially lower.
"This is a completely new operating model that upends the traditional model," she said.
Taira did not disclose the number of vehicle guides at each location.
After facing a severe financial crisis in 2022, Carvana restructured its debt, returned to profitability, and saw its market capitalization soar to approximately $76 billion. The company sold nearly 600,000 used cars last year, a 43% increase from 2024, and its current share price is nearly one hundred times higher than its historic low closing price in December 2022.
Green and blue Jeep models are displayed on the rubberized playground surface.
Mike Stanton, President of the American International Automobile Dealers Association, stated at an industry conference in Detroit this Tuesday that Carvana's move into the new car market is causing significant disruption.
Automakers traditionally set sales targets based on a dealer's geographic territory, but Carvana's model of online sales and cross-state delivery upends this territorial system.
Stanton also suggested that Carvana's investment in physical locations validates that most consumers are not ready to purchase a new car entirely online. "People still want to see the car and talk to a person. To me, it shows the industry is moving digital, and the traditional dealer has to accelerate its digital transformation," he said.
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