Vroom Is Winding Down and Liquidating Inventory
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Just three years ago, big online offers from companies likes Vroom and Carvana made online car buying and selling look more attractive than ever. Now Carvana is trading at just 13% of its August 2021 high. As of today, Vroom is getting out of the business of buying and selling cars entirely.
Vroom has immediately suspended its e-commerce operations, the buying and selling of cars online. The brand's website now redirects to the announcement, which adds that Vroom is also "winding down" its used vehicle dealership business. A press release from the company states that the brand will sell its existing used car inventory through "wholesale channels" rather than through the brand's now-discontinued platform.
The brand says that the decision is part of an effort to "preserve liquidity and enable the Company to maximize stakeholder value through its remaining businesses." Two other operations owned by the publicly-traded company, the financing arm United Auto Credit Corporation and the analytics service CarStory, will continue to operate.
A Q&A on the Vroom website suggests that only purchases and sales that have already reached the point of signing a contract will continue from here. The brand goes on to "wish [buyers] well on [their] car-buying journey," which will be little help to buyers early in the process of purchasing a vehicle from the service. Titling, registering, and 90-day warranties for previously-finalized sales will continue as planned.
The decision looks like the beginning of the end for a short-lived model of e-commerce companies that would buy and sell cars online, simplifying what had historically been a very complicated transaction. For now, Carvana continues to use a similar business model.
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