Used-car chain Carvana expects to retail more than 500,000 used cars and trucks in 2025, following record unit sales and revenues in the third quarter, according to Phoenix-based Carvana’s quarterly report.
“Q3 was another large step on the path to achieving our current goal of selling 3 million cars, at a 13.5% adjusted EBITDA margin, in the next five to ten years. We’re getting better as we get bigger,” said Carvana CEO Ernie Garcia, in a conference call on Oct. 29.
In the third quarter, Carvana sales of retail units totaled a record 155,941, an increase of 44% vs. a year ago. Revenue was a record $5.65 billion, up 54.5% year over year. Adjusted EBITDA margin for Q3 was 11.3%, down from 11.7% a year ago. EBITDA margin is earnings before interest, taxes, depreciation and amortization as a percent of revenue.
Carvana is a formidable competitor versus franchised new-car dealerships, for used-car sales. Year to date through Sept. 30, Carvana unit sales were 433,119. Year-to-date revenues were $14.72 billion, up 45.4% vs. the same period a year ago.
Positioning for Q4
Carvana said it expects retail sales of more than 150,000 units in the fourth quarter of 2025. Added to year-to-date sales through September, that implies retail sales of more than 580,000 units for the full year of 2025.
The company said it expects adjusted EBITDA “at or above the high end” of a range from $2 billion to $2.2 billion for the full year.
Behind much of the growth is Carvana’s $2.2 billion acquisition of the U.S. physical auction business of ADESA, the wholesale auction firm of KAR Global, Carmel, Ind. The purchase consisted of 56 ADESA U.S. locations across the country, totaling approximately 6.5 million square feet of buildings on more than 4,000 acres. KAR Global was renamed OPENLANE Inc., in May 2023.
In the longer run
Since the acquisition, Carvana has been integrating the functions of what Carvana calls Inspection and Reconditioning Centers with former ADESA sites – to add Carvana retail-ready reconditioning to ADESA auction sites and ADESA auction capabilities to Carvana recon centers.
As of the third quarter of 2025, the company had 27 integrated centers set up for both retail and wholesale operations, up from nine a year ago, according to a Q3 shareholder letter from Garcia to Carvana shareholders.
The Carvana concept is to get more retail-ready used-vehicle inventory physically closer to more consumers.
Close to the consumer
Separately, publicly traded new-car megadealer chains such as Lithia Motors, AutoNation and others are pursuing a similar goal, to get the biggest possible selection of used vehicles in close enough physical proximity to retail centers, to offer a greater variety, cut down on shipping costs and speed up delivery time.
For instance Bryan DeBoer, Lithia president and CEO, said Lithia dealerships on average are within 188 miles from over 95% of the U.S. population, in a Q3 earnings conference call. Lithia Motors, based in Medford, Ore., is the biggest U.S. new-car retailer. Lithia retailed 109,097 used units in the third quarter – fewer than Carvana.
Why is it important to be close to the population? In another separate earnings call, AutoNation CEO Mike Manley said, without referring to any particular retailer: “The reality is, most people buy a used car within 50 miles of the dealership that’s got it.”
Meanwhile, Carvana’s Garcia said Carvana is piloting faster and more widely available same-day delivery in its home Phoenix market. Garcia said in the shareholder letter that about 40% of Carvana customers in the Phoenix area can get same-day delivery, vs. around 10% in other markets where Carvana has introduced same-day delivery capability.
Carvana said in a recent announcement introducing same-day delivery in the San Diego market that the company has same-day delivery capability in markets in “more than 20” states.
