Carvana’s originations hit $1.9 billion in the third quarter, a 115% year-over-year increase.
Third-quarter revenue increased 105% to $1.1 billion, marking the used-car retailer’s 23rd straight quarter of triple-digit revenue growth. Carvana sold 46,413 retail units, up 83% from the prior-year period.
The business of buying cars from customers, an area of focus for the Tempe, Ariz.-based company, shot up 249% year over year. “Growth in vehicles acquired from customers also fed our retail inventory, diversifying our selection and improving acquisition prices,” Chief Executive Ernie Garcia noted in a letter to shareholders. Overall, 31% of retail units sold were sourced from customers, up from 16% in the prior-year period.
The car-buying operation is “nearly 70% as large as our core business in transaction volume,” Garcia noted, adding that the growth of the business “exceeded our expectations, which led to some operational constraints and required additional investments.”
To that end, Garcia revealed that Ally Financial increased Carvana’s floorplan line of credit last quarter to $950 million from $650 million. The boost added “significant flexibility to expand [Carvana’s] inventory selection and buy more cars from customers,” he added.
Meanwhile, Carvana continues to expand geographically, opening in nine markets last quarter and bringing its total to 146 markets. The lender also built four vehicle vending machines, for a total of 22.