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An interesting detail is how Carvana structures its gross margin. Approximately half of the gross profit per unit stems from the sale of used cars. The remaining 47% is generated through attractive financing options offered to buyers. Carvana bundles these car loans and sells them at a premium, effectively managing the risk associated with loan defaults, as they do not bear the losses from customers failing to pay their loans.
As Carvana continues to expand its reach across over 200 metropolitan areas, it increases the number of vehicles sold each month and, consequently, enhances its finance receivables, contributing significantly to the overall gross profit.