Carvana and Carmax Inventory Ages on Weak Demand

Download the full report, Quantifying the Health of Used Car Resellers Using Web Data, for more details.

Average days to sell and average inventory age rose to record levels for both Carvana (CVNA) and CarMax (KMX) in late 2022 and early 2023*. This rise is likely a result of tighter auto lending conditions, higher rates, and inflation squeezing consumer budgets. Average days to sell grew 46% and 31% for CarMax and Carvana, respectively, from 39 days and 71 days in June 2022 to 57 and 93 days in January 2023. At the same time, average inventory age rose 89% and 59% to 68 and 97 days.

Further, inventory age began to surpass days to sell by a historically large margin in October 2022 for CarMax and December 2022 for Carvana. A wider gap between inventory age and days to sell suggests these dealers may be sitting on older, and likely higher cost, inventory which, given the current demand/pricing environment, may lead to notable margin pressure.

Download the full report, Quantifying the Health of Used Car Resellers Using Web Data, for more details.

Notes:

*Excluding the heavily COVID impacted April 2020 period