Carvana Drives into San Diego’s New Car Market
Big news for San Diego car buyers! Carvana, widely known for its online used-car sales, has officially entered the new-car market by acquiring the San Diego Chrysler Dodge Jeep Ram dealership in Mission Valley. This move signals a significant shift in Carvana’s business model and offers local residents new options for purchasing vehicles.
A New Era for Carvana in Mission Valley
Carvana, the nation’s second-largest used car retailer, has made a strategic leap beyond its traditional focus. The acquisition of the San Diego Chrysler Dodge Jeep Ram dealership at 777 Camino del Rio South grants Carvana local franchise rights to sell brand-new Stellantis vehicles. This means San Diegans can now browse, finance, and purchase new Chrysler, Dodge, Jeep, and Ram models through Carvana’s platform, with options for home delivery or convenient dealership pick-up.
Expanding Local Footprint and Customer Experience
While Carvana built its reputation on a technology-driven, online car-buying experience, this acquisition underscores the growing importance of a physical presence. The Mission Valley dealership, a 3.27-acre property originally built in 1979 and previously owned by Sunroad Enterprises, will serve as a crucial complement to Carvana’s digital operations. For local customers, this means the ability to:
- Test-drive vehicles before purchasing.
- Access comprehensive vehicle service and maintenance.
- Reinforce brand recognition and customer trust through in-person interactions.
This San Diego expansion is Carvana’s third franchise dealership purchase since February, following similar acquisitions in Casa Grande, Arizona, and Dallas. The company already operates two vending machines and an ADESA wholesale auto auction in the San Diego area, and recently launched same-day delivery services, further integrating its hybrid approach into the local market.
Carvana’s Vision and Financial Outlook
Founded in 2012, Carvana aimed to reduce friction in the car-buying process, allowing approximately 30% of its customers to complete purchases without direct staff interaction until delivery. With an annual sales goal of 3 million vehicles within five to ten years, CEO Ernest Garcia highlighted physical dealerships as key to fostering customer trust and brand recognition, blending online convenience with familiar traditional methods.
However, this new-car expansion also introduces financial considerations. Carvana has secured a $99 million credit line with Stellantis Financial Services to fund its new inventory. Under this agreement, Stellantis fronts the cost of vehicles, but Carvana is responsible for repaying the debt for any cars held for more than 11 months, exposing the company to additional financial risk.
Carvana’s Evolving Sales Model
To better understand this strategic shift, consider the differences in Carvana’s approach:
| Feature | Original Carvana Model | New Hybrid Model (San Diego) |
|---|---|---|
| Vehicle Type Focus | Primarily Used Cars | New & Used Cars |
| Local Presence | Limited (Vending Machines, Hubs) | Full Dealership (Sales, Service, Test Drives) |
| Purchase Process | Almost Entirely Online | Online Convenience with Local Support |
| Inventory Financing | Independent Sources | Stellantis Credit Line (for new cars) |
Frequently Asked Questions for San Diego Car Buyers
- What does this mean for car buyers in San Diego?
San Diego residents now have the option to buy new Chrysler, Dodge, Jeep, and Ram vehicles from Carvana, combining their online buying experience with local services like test drives and maintenance at the Mission Valley dealership. - Can I still buy a used car from Carvana in San Diego?
Yes, Carvana will continue to offer its extensive selection of used vehicles, alongside the new Stellantis models. The new dealership will also enhance used car services. - Where is the new dealership located?
The acquired dealership is located at 777 Camino del Rio South in Mission Valley, San Diego. - What car brands will be sold at this location?
The dealership will sell new Chrysler, Dodge, Jeep, and Ram vehicles, as it holds local franchise rights for these Stellantis brands. - Is Carvana abandoning its online-first approach?
No, Carvana is integrating a physical presence to complement its online platform, aiming to provide a more holistic car-buying experience that caters to a broader range of customer preferences while retaining its digital convenience.
This strategic expansion in San Diego offers local car buyers a new, hybrid approach to vehicle purchasing, blending the digital ease of Carvana with the tangible benefits of a traditional dealership.
Carvana enters San Diego new car market
