Carvana Enters New Car Selling Business, Buys First Dealership in Arizona

by Carl Malek | March 3, 2025

Used car seller Carvana ventures into new territory with the firm buying its first new car dealership as the company attempts to enter the new car sales market with the purchase of Stellantis franchised dealership.

Carvana makes history with the firm confirming it bought its first franchised new car dealer.

Used car seller Carvana has had a rocky history ever since it was founded with the company teetering on the edge of bankruptcy as slowing sales and a problem with vehicle titles threatened to sink the company during 2022 and the early half of 2023. Carvana has managed to hang on and while it’s still facing increased scrutiny due to the publication of a report by Hindenburg Research, the firm is still pushing ahead with its plans.

These plans include a surprise push into the new vehicle sales market with the company confirming it recently bought a franchised Stellantis dealer in Arizona hinting that the company is expanding its horizons and is attempting to diversify its business strategy to try and find higher levels of growth and vehicle sales to consumers.

Carvana’s ownership can be hard to spot

The Stellantis showroom in Arizona will be a test market for the company and might encourage it to buy more dealerships in the future.

While Carvana is technically the owner of the dealership, its visual influence will be hard to spot at first glance. Rather than make it obvious, the company chose to rebrand the store they bought “Casa Grande Chrysler, Jeep, Dodge, Ram” with the building looking like a typical new car dealership when it opened to the public this week. The dealership also operates like a typical new car showroom with Carvana even keeping all of the old employees from the original ownership. Carvana told Phoenix Business Journal in a statement the company is “always experimenting” and that this purchase “is a small test in a single market.”

This test could give Carvana valuable information about how it can approach this new vehicle market and give the firm first-hand experience into what it needs to do to ensure that it can successfully navigate the challenges and potential pitfalls that often come with owning a new vehicle showroom and a franchised operation on top of that.

New dealership could provide another new avenue for profits

Carvana’s newest expansion play comes as the company recovers from financial trouble and the fallout of a report from firm Hindenburg Research.

The opening of this new dealership (as well as any other subsequent ones) could allow Carvana to access a new avenue of profit beyond the used car market. Carvana has some precedence for this too with the firm expanding into vehicle auction sales a few years ago though some of the inner workings of this particular move were heavily featured in the damning report Hindenburg Research released about the company.

It will be interesting to see what comes of this move but the company said in a letter to shareholders about its robust Q4 2024 financial results that it expects “significant growth” for retail sales this year and that Carvana is starting 2025 “strong.” One aspect of this start is expanding into new segments with the company diversifying its profit streams to allow it to have a more robust flow of cash while also having a few areas that it can turn to as a backup strategy in the event the market turns sour. This might happen sooner than some think with the threat of tariffs on Canada and Mexico potentially causing new vehicle prices to surge upwards.