While online used-vehicle retailers may be under pressure, their model resonates with consumers, analysts said.
It's too soon to know how Carvana's, Vroom's and Shift Technologies' respective strategies will translate into results or when the used-car market will normalize, said Sharon Zackfia, a consumer equity research analyst at William Blair, who covers the three companies.
But consumers continue to want to purchase vehicles online, and she added that there may be an advantage to having a hybrid online-and-in-person model that doesn't always rely on delivery to the driveway, which also could be a way to reduce costs.
Some people simply aren't itching to go back to moseying around used-car lots, said Chris Pierce, a Needham and Co. senior analyst who covers Internet services, including Carvana.
If they get their next steps right, either Carvana or CarMax — the No. 1 used-vehicle retailer in the U.S. by sales volume — or both could continue to roll up share in the space. That's because they offer a unique business model to buyers, have more pricing data and can move faster than mom and pop shops, Pierce said.
Said Pierce: "That's not necessarily fair or right or fun, but I do think that they've shown that that share can be taken quickly."
