The Used Car 🚘  Boom!

Living in urban cities with a decent public transportation system like New York City, car ownership has been a novelty rather than a must-have. But the pandemic has changed all that. While car ownership or the pondering of one has increased especially among the younger generation between 18-35, consumers are shifting towards discounted or used cars and also more digitalized approaches to the buying process, according to a report conducted by McKinsey.  

Used car sales through the roof
Publicly traded Carvana is an online car dealer that has been able to tailor to the demand for this new generation of potential car buyers since the pandemic. Famously known for its car vending machine buildings where customers can pick up the cars they purchased online, the company had never posted a profit. However, in September they reported a record third-quarter and pushed its stocks up 30. 

Meanwhile, Santa Monica-based startup Fair.com, which offers a flexible car ownership business model that takes away the long-term lease agreements and had the backing of Softbank may be making a comeback. Last year in October, it laid off 40% of its staff including its CFO. To turn things around, it welcomed a new CEO in May 2020 and is rumored to be raising new rounds of funding.

But you don’t have to always use your car
Meanwhile, investors are also seeing the potential in carsharing platforms like GetAround who just closed a $140MM round of funding led by the People Fund. The company has been able to attract a strong backing from global investors including SoftBank Vision Fund, Menlo Ventures, Braemar Energy Ventures, Triangle Peak Partners, Asset Plus Capital, Bpifrance, Cathay Innovation, and Via-ID. Getaround allows for drivers to rent cars from private car owners and is available in over 100 U.S. cities. 

Competitors like Turo take carsharing international. Aside from U.S. operations, this San Francisco-born startup has operations in Canada and the UK. Similar to GetAround, Turo also allows car owners to list their cars for rent and touts itself as the world’s largest car-sharing marketplace.  

Photo by why kei on Unsplash

The Bottom Line
The pandemic has shifted our approach to car ownership and perhaps fuel a market for carsharing along with it. Whether this is good for the environment though, is a different matter.