Carvana's Profit Margins: Separating Fact from Fiction

Carvana's high profitability is under scrutiny, with questions raised about accounting practices and intercompany arrangements. The company operates a hybrid retail and financing model, combining used vehicle sales with loan origination, servicing, and securitization. Privately held companies controlled by the Garcia family, including DriveTime and Bridgecrest, play key roles in the broader ecosystem, complicating the interpretation of Carvana's unit economics. Analysts and investors are revisiting whether Carvana's margins reflect underlying operating performance or financing activity.