Courtesy Automotive Group, a family-owned dealership group based in Phoenix, Arizona, now faces an unconventional competitor: Carvana $CVNA ( ▼ 0.13% ) .
The online retailer, also headquartered in Phoenix, recently acquired a Chrysler Dodge Jeep Ram (CDJR) franchise in Casa Grande, not far from Courtesy's East Mesa CDJR location.
The competitive reality: Carvana’s auction access, marketing muscle, and robust finance operation give the company a distinct edge—particularly its ability to compress front-end margins to zero or below, explained Courtesy Automotive Group CEO Scott Gruwell.
“[Carvana] picks it back up on the finance part. And…that’s a challenge for dealers who don’t carry their own paper, or who don’t have the sophistication to handle credit, repos, collections, and all those complicated issues that come with selling and financing a vehicle,” Gruwell told Daily Dealer Live hosts Sam D’Arc and Uli de’ Martino.
Gruwell’s solution: Courtesy Automotive’s answer to competing with Carvana (which reportedly has taken the Casa Grande CDJR store from dead last to #3 in its district) centers on the group’s deep-rooted ties to its customer base.
“We’re embedded in the community, doing a lot of give-backs and charities,” said Gruwell. “We try to explain to our customers that we are family, and that we are different. We’re a privately held organization, and we give back to the community because they’re the ones who’ve allowed us to grow so much.”
On top of that, Gruwell is strengthening Dealer Repair Programs (DRPs), improving delivery operations, and exploring financing partnerships to diversify revenue to stay competitive with online, direct-to-consumer (DTC) sales.
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The bigger concern: Gruwell's real worry isn't just competing with Carvana—it's that OEMs might greenlight more of these partnerships without considering the long-term impact on dealer relationships.
"I feel that, sometimes, when people make decisions like that…they're looking at the short-term game and not the long-term game," said Gruwell. "They're not thinking about the relationships that have been established, and all the positive things that have come from factory-dealer relations.”
Automakers must also remember that dealers have invested billions over decades into facilities, customer experience, parts, and service, and those contributions should weigh heavily in OEMs’ decisions that affect the dealer network, he explained.
Bottom line: Family-owned dealer groups like Courtesy must now compete against a retailer with financing advantages they can't match, while hoping their OEMs value long-term partnerships over immediate volume boosts.
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