Yesterday, online used car seller Vroom announced that it “is discontinuing its e-commerce operations and winding down its used vehicle dealership business in order to preserve liquidity.”
The company won’t disappear. Two business units – lender United Auto Credit Corporation and CarStory, which uses artificial intelligence to develop insights for car retailers – will continue.
No Fire Sale on Used Cars
Vroom won’t be selling off stock at a significant discount. The company has suspended its online selling platform and will “sell its current used vehicle inventory through wholesale channels.”
Related: How to Buy a Used Car in 10 Steps
So, Vroom’s used cars in stock will end up at other used car retailers.
Call Vroom if You Were Mid-Purchase
Customers who are in the process of buying a vehicle should call Vroom’s customer support team at (855) 524-1300. Agents will be available “to discuss options,” Vroom says. “If you have not yet signed a contract for your purchase, we regret that we will be unable to sell you a vehicle. We wish you well in your future car-buying journey,” reads a frequently-asked-questions page on the website.
Owners who have recently purchased a car through Vroom should still expect to receive their title and registration information.
One Down, Several Still Standing
Vroom was one of several companies that hoped to become the Amazon of used cars. It was founded as a used-car-trading business in 2013 but expanded to become an online sales platform early in the COVID-19 pandemic as Americans turned to touchless car purchases.
Related: How to Buy a Car Online
But companies have struggled after early growth. Rival Carvana nearly collapsed at the end of 2022 before negotiating new funding agreements that let it fight back to a more sustainable size.
Marketwatch reports that the business “proved to be cash-intensive” in a way the companies hadn’t anticipated. Last-mile transportation, title and registration processing disputes with state governments, and customers discovering problems with cars they’d bought sight-unseen proved challenging.
Carvana remains in business. But, at press time, its stock is trading at around $47 – well under its peak of over $360 in June of 2021.
Though Vroom failed, analysts think 2024 could be a stable, predictable year in the used car market.
