Dealers are entering a new era of competition—and Carvana is quietly setting the pace

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Welcome to The Breakdown, an analysis of auto retail’s top trends, moves, and insights—in under 5 minutes.

When Car Dealership Guy started ramping up on Twitter (now X), I would get bombarded with thousands of comments from consumers all saying pretty much the same thing about franchise car dealers: Too many games. Not enough clarity. Too much friction.

Over time, that distrust created openings for disruptors to join the industry. And every year, these disruptors get better capitalized, more sophisticated, and start moving faster than anyone expected.

Case in point: Carvana $CVNA ( ▲ 1.37% ). Over the past nine months, the online retailer has acquired three Stellantis stores (Chrysler, Dodge, Jeep, Ram, et al.) Two of the stores were underperforming in their markets at the time of purchase. And now, they are now both ranked in the top 5 nationally for month-to-date sales in November.

Here’s what’s driving the company’s fast-moving acquisition spree, how dealers are adapting to compete, and where the real advantages lie for retailers moving forward…

As the company successfully steps further into franchise dealer territory, state dealer associations could mobilize. Lobbyists might potentially get involved. And some states might even change legislation. So, Carvana is getting entrenched now. And the more stores it owns when its opposition organizes, the harder it becomes to unwind the systems.

Each OEM approval also makes the next one easier. And Stellantis $STLA ( ▼ 0.67% ) is vulnerable right now—market share is still down, dealer relationships are somewhat strained, but, most importantly, sellers are highly motivated to exit. But who knows how long that will last.

Other capital and tech players are eyeing the same profit pool too. Amazon $AMZN ( ▼ 0.49% ) is testing ways to sit on top of certified and late-model used car transactions, positioning itself as the point of discovery in theory.

Private equity firms are actively looking to buy or roll up franchised stores and mid-size groups, betting that operating discipline and scale can unlock higher returns than current owners are generating.

But this land grab is only possible because the capital window is open. Carvana’s stock recovery—from single digits to well over $300—restored market confidence, refinanced its balance sheet, and gave it access to cheaper debt and fresh equity in a way that simply did not exist in 2022–2023.

The lesson: Market windows are brief. Disruptors deploy capital and scale operations quickly when conditions are right, not when they're “comfortable.” Early moves can establish hard-to-reverse facts as industry and regulatory opposition mounts.

Scott Gruwell, CEO of Courtesy Automotive in Phoenix, Arizona, told me he's not even trying to compete with Carvana on price because he knows he can't.

And the inventory aggression is intensifying. Over the last three months, Carvana's listed inventory jumped from roughly 53,600 to 64,700 units. Pricing moved from about 12% below market to 15% below, according to firm One Auction View. Yet, vehicle age isn't blowing out—turns are still tight.

Translation: Carvana is buying more, listing faster, and undercutting dealer prices harder.

So, instead of chasing Carvana's pricing, Gruwell is tightening everything else.

"We all got to get better on our DRPs. We all could get better at our deliveries. We've got to make certain that we're always looking for increase in revenues in different ways. That's who's going to win in the long term," he explained.

On top of that, Gruwell said that digital retailing is baseline table-stakes now. "[Polestar] really did a focus on digital retailing. So, we picked up a lot of little tidbits that we brought on to our whole organization."

His approach: Hybrid. Customers still come in to see the car, but everything after that goes digital, including deal jackets, signatures, and title work. Even F&I happens over video.

Carvana is only one piece on a wobbly chessboard.

Amazon is chasing the discovery and transaction layer, while OEMs experiment with hybrid direct models.

Basically, the architecture of automotive retail is expanding in multiple directions at once. Every one of these players can compete on price. Every one can build slick digital experiences. Every one can market nationally.

But none of them could replicate 30 years of service relationships.

Fixed ops (service, parts, body shop) is the moat. Gruwell's fixed operations have been "pretty strong and plugging away" while front-end margins compress. And that's not an accident.

It's also the hardest thing to build. Trained techs take years to develop. Parts infrastructure takes capital and logistics. And customer trust takes thousands of completed ROs, one oil change at a time.

Bottom line: The operators who survive the next wave are the ones who've built something that can't be copied quickly—strong fixed ops, real community presence, digital that actually closes deals, and enough transparency to start rebuilding the trust this industry torched over the years.

Everyone else is going to feel the squeeze. Mid-size groups coasting without any real differentiation, small operators who can't afford to invest, dealers still convinced that OEM loyalty or franchise law will bail them out—they're all about to find out how exposed they really are. Consolidation speeds up from here. The disciplined, scalable, culture-driven operators will keep gaining share, while the slower stores become somebody else's acquisition.

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