Carvana's Success Rides on Used-Car Loans 

Link to article: https://www.wsj.com/articles/carvanas-success-rides-on-used-car-loans-11629019801 

 

QUESTIONS:

1. What are Carvana's motive(s) to turbocharge its revenue?
2. Carvana records income on sales of car loans, or securitization transactions. What are securitizations? How does auto-loan securitization work according to this article?
3. Under current market conditions, Carvana is able to sell securitized portfolios of car loans at a premium to their face value. Why are investors willing to pay the premiums?
4. Why are Carvana's gains on the loan sales "a critical audit matter"?

Answer rating: 100% (QA)

Based on the article Carvanas motives to turbocharge its revenue appear to be driven by the desire to increase its profitability and scale its busines... View the full answer