The Richmond area has a new way of getting used cars.
Online used auto retailer Carvana Co. opened on Wednesday one of its automobile-dispensing towers where customers can automatically retrieve a vehicle.
The glass structure stands 12 stories tall and has a 43-vehicle capacity.
It is located at Westwood Avenue and Hamilton Street, a short distance from Topgolf’s complex. Next door to the Carvana property on Hamilton Street is SPARC, the youth performing arts school, which has its studio and offices.
That tower and one that the company operates in Atlanta are the two tallest of Carvana’s 30 towers that dispense vehicles.
The tower, the first one in Virginia, can be seen along Interstate 195.
Carvana customers shop the company’s website for inventory of more than 55,000 used cars. Customers go online to buy, secure auto financing and schedule vehicle delivery at home or pick up the vehicle at a vending tower.
The company began offering its home delivery vehicle service in the Richmond market in June 2016.
The location, at 2201 Westwood Ave., is open Mondays through Saturdays from 9 a.m. to 7 p.m.
Customers select a time to pick up their vehicle. Upon arrival, a customer service representative presents each with a commemorative, oversized Carvana coin to activate the automated vending process. They can watch the vehicle descending through the heart of the all-glass tower.
“It’s really cool to watch,” spokesperson Veronica Cardenas said.
“You just put the coin in the slot and you watch the car being vended from the machine. And you can take it from there. It’s not like a super long process. You’re pretty much in and out,” she said. “Our position has always been that we definitely save customers money by not having these big dealership lots and having that expense of having a dealership showroom and all of that. And this is such a fun way for people to enjoy the experience.”
The vending machine gives the company a way to expand its visibility in the market, she said.
Carvana, which has seen rapid growth in recent years, opened its first vending machine in Nashville in 2015. Since then, the company has expanded to 29 other locations.
The company sold 312,221 vehicle units in the first nine months of 2021, up 81.6% from the nine-month period a year ago. Carvana generated $9.06 billion in revenue and had a net loss of $105 million during the nine-month period. Revenue increased 141% from the same period a year ago, when it had a net loss of $308 million.
Carvana is entering the Richmond market which is home to CarMax, the Goochland County-based retailer that pioneered no-haggle car pricing when it was founded in 1993. CarMax, now the nation’s largest used-vehicle retailer, has two stores in the region.
CarMax has been making changes to its operations in recent years as it competes with startups including Carvana and Vroom, which are increasingly trying to take market share away from CarMax and show that they have a new way of selling used vehicles.
For instance, CarMax spent the past couple of years rolling out its omni-channel car buying experience where customers can buy a car either completely from home, in-store or a combination of both. A customer could buy a used vehicle online and have it delivered to a home, or the person can do part of the car-buying process online before completing the purchase in person at a store. It also offers customers a money-back guarantee for up to 30 days after purchase.
Meanwhile, construction is underway to build a 193,000-square-foot vehicle inspection and reconditioning center along Interstate 95 in Chesterfield for Carvana.
The $25 million project on 180 acres along I-95 and Woods Edge Road near Ruffin Mill Road should be completed by the spring of 2022, according to the county’s economic development department. About 400 jobs are expected to be created with the facility, the department said.
Carvana announced plans for the project in April. It had previously said it was going to build the center there, but canceled those plans in May 2020.
Carvana operates 14 vehicle inspection centers across the country. No sales are conducted at these inspection centers, and the public is not able to go there to pick up a vehicle after ordering one on the Carvana website.
Instead, the reconditioning center takes used cars that the company acquires and puts each vehicle through a 150-point inspection process and minor body repair to get it ready for sale. Once a vehicle is certified, the company uses automated photo booths that capture a 360-degree exterior and interior virtual tour of each vehicle to be added to the company’s website inventory.