Carvana Trading Guide: What Is Carvana & How to Trade Carvana Shares?

The global car retail industry has experienced remarkable growth in recent years, with Carvana (CVNA) emerging as one of the most prominent players in the market, in general, and the US, in particular.

Here's everything you need to know about Carvana, including how to trade its shares and more:

TL;DR

• Carvana is a US-based, online-only platform for buying and selling used cars, offering a more accessible alternative to traditional dealerships.
• Carvana offers the buying, selling, trade-ins, and financing of cars.
• Despite its exponential growth, Carvana faced challenges like the temporary ban of its vending machine in North Carolina in 2021 and a two-week business license suspension in Illinois in 2022.
• Traders can use Contracts for Difference (CFDs) to speculate on Carvana's share price movements, with leverage that may lead to potentially increased profits or losses.

What Is Carvana?

Carvana is an American (Arizona-based) online-only car retail company that offers the buying and selling of used cars by offering a more accessible alternative to traditional car dealerships.

Carvana History & Key Events

• 2012: Carvana was established by Ryan Keeton, Ben Hutson, and Ernest Garcia III (the CEO).
• 2017:
• April: Carvana went public and listed its shares on the New York Stock Exchange (NYSE).
• August: Carvana acquired Calypso (its rival) to improve data and analysis.
• 2018: Carvana acquired Car360, which is known for its smartphone technology, 3D computer vision, augmented reality, and machine learning.
• 2020: In the wake of the coronavirus pandemic, Carvana offered touchless automobile delivery and pick-up services, a move that boosted its vehicle sales by 25% in Q2 2022 and eventually made it the US' second-largest online used-car retailer.
• 2022: Carvana purchased ADESA, the second-largest US wholesale auto auction chain, for $2.2 billion.
• 2023: Carvana offered same-day delivery service for those trading a vehicle.
• 2024: Carvana faced a potential bankruptcy and had to lay off over 4,000 employees, exterminating about $1.1 billion of annualised operations expenses.

Regulatory Scrutiny

It is important to note that Carvana has faced increased regulatory scrutiny in the past couple of years.

For example, in 2021, the company's Carvana vending machine was temporarily banned in North Carolina due to its inability to conduct adequate inspections. Moreover, in 2022, its business license was suspended for two weeks in Illinois.

These less-than-optimistic occurrences may highlight the fragility of the car retail industry and the importance of monitoring news and key events that could affect the company's share price and performance.

Carvana Services: What Does Carvana Offer?

Carvana offers the following main services:

• Buying and selling of cars
• Trade-ins
• Financing purchases

Carvana Share Price History

• On 1 July 2021: Carvana shares hit a record high of 338.18.
• On 1 December 2022: Carvana shares hit a record low of 4.64.
• On 1 November 2024: Carvana shares soared to 260.57.

Carvana Trading: How to Trade Carvana with Share CFDs

Carvana Contracts for Difference (CFDs) allow traders to speculate on Carvana share price movements without owning the underlying asset. CFDs offer the possibility of profiting from both rising and falling Carvana share prices. However, it's important to remember that leverage can magnify both gains and losses.

Conclusion

Carvana, one of the US' leading car retailers, can present an interesting addition to your trading portfolio if you're interested in diversifying it with automotive stocks.

If Carvana trading piques your interest, you can trade Carvana CFDs with Plus500.