Carvana’s originations of finance receivables increased to $525.8 million during the first six months of 2018, compared with $223.8 million during the same time last year, according to the company’s second-quarter earnings released this week.
That boost in financing tracks with the online dealership’s higher retail sales expectations this year. Sales climbed 111% during the second quarter at Carvana.
Carvana funds loans through a purchase and sales agreement it has with Ally Financial Inc. In late 2017, Ally agreed to fund $2 billion worth of retail contracts through the dealer’s network this year, upping the $600 million commitment the lender made in January 2017.
During the earnings call, the online car dealership revealed that on Tuesday it earned $4 million for facilitating the refinancing of $236 million of Carvana-originated finance receivables it had previously sold.
“The refinancing provides the purchaser with more efficient financing than at the time of their initial purchase, and we are sharing in the value created,” Mark Jenkins, chief financial officer, said on the earnings call. “We believe this transaction demonstrates our ability to better monetize the finance receivables originated on our website.”
Carvana consumers can also finance vehicles through Carvana’s third-party lenders. Carvana sold $308.8 million in principal balances of finance receivables during the first six months of 2018, up from $157.7 million during the same time last year.
In a separate announcement, Carvana revealed its expansion to four new cities in Pennsylvania: Harrisburg, Lancaster, Allentown, and York-Hanover. Meanwhile, it launched in four more cities in Ohio: Akron, Canton, Youngstown, and Toledo. Carvana launched its thirteenth car vending machine in Cleveland, Ohio, late last month, as well.
Launched in 2012, Carvana now sells vehicles in 70 cities nationwide.
Carvana acquires its inventory of roughly 10,000 used vehicles through suppliers like Manheim and purchases from the general public. Carvana’s platform allows consumers to shop, finance, and purchase vehicles online. They can also schedule a seven-day test run before deciding on their final purchases.
