Nashville gets a car vending machine

The start-up, Carvana, was launched only in 2012, but the online platform for selling used vehicles was already raking in US$5 million the following year, and then an impressive US$45 million in the year after. It also landed on the 2015 Forbes List of America’s Most Promising Companies. So, it’s not surprising that the company is now making headlines with an innovative way to deliver the cars it sells.

Carvana’s CEO, Ernie Garcia, wanted make buying a used car online hassle-free – like doing away with signing documents and haggling for better prices – and more fun. So, the company built a five-storey vending machine that dispenses cars in Nashville, Tennessee. Yes, dispenser that dispenses full-size cars.

It’s not the first company that has come up with a gimmick like that. Kandi Technologies in Hangzhou, China has been using a similar contraption to dispense and collect its rental electric cars. Although it might seem gimmicky, a car vending machine actually uses smaller real estate space and, in the long term, saves on costs of operating and staffing a dealership.

Garcia said, when speaking to Popular Science, "The lack of differentiation locked everyone into the exact same cost structure that forced them to attract customers with a low-priced car, and then put them in a back room and try to sell them thousands of dollars of things they don't really need, in order to make up for their undifferentiated cost structure."

As it is, Carvana’s online model saves customers around US$2000, by its own estimates, and by cutting down more operating costs using the automated dispenser, the savings can be transferred to the customers (we assume).

Carvana’s tower has a capacity of 20 cars. When a customer makes a purchase via Carvana’s website, he can opt to have the car delivered or to pick it up himself; if he chooses the latter, the car will be sent from the company’s distribution centre to the dispenser. When the customer goes to the Carvana Nashville facility, he just has to enter his data into a tablet and he’ll receive a three-inch coin, which will be used to insert into a coin slot (just like an actual vending machine). Automated platforms and parking technology will retrieve the correct car and deliver it to the customer. Sounds geat…was not what the used car salesman said.