Carvana Vending Machines: What does the future hold?

Carvana is well known for its car vending machines. Large structures dispense a car to customers after they complete an online purchase and receive a token to insert into the vending machine. These vending machines were more than a gimmick, they served as great advertisements announcing Carvana's introduction to a new market. Furthermore, the vending machines have outsold traditional delivery centers by a wide margin. See the graphic below showing the vending machine outperformance compared to the average location.

However, that narrative has changed over the last few quarters. Vending machine locations no longer outperform the average delivery location as depicted below. As Carvana has scaled and grown units, the vending machines have a pretty fixed sales capacity per month compared to traditional delivery locations. Given Carvana's growth hovering around 40%, it raises the question of whether its vending machines are becoming an inefficient drag on the business.

Now, do Carvana Vending Machines still serve as a more effective advertisement than a billboard? Absolutely! That said, Carvana clearly recognizes this trend, which is likely why they have not brought a new vending machine online since February 2024 and are spending in other ways. Since that time, Carvana has increased ad spend from $228 million in 2023 to $363 million in 2025, focusing on more traditional advertisements.

While the current cost of a new vending machine is speculative, Carvana has disclosed in previous filings that a new vending machine costs between $5 million and $5.5 million. This is an order of magnitude more than a traditional location as described in their filings. Annual vending machine costs are speculative at this point, but we assume they do not have substantially lower costs than a traditional location.

All of this raises two important questions: First, do we anticipate Carvana building more vending machines in the future? Probably not. Given the brand's national awareness, upfront costs, and fixed capacity, we no longer think this makes sense. Second, what will Carvana do with the existing vending machines? We are not quite certain about that. Eliminating the vending machines admits defeat and abandons the marketing strategy that has brought Carvana this far. However, with the pure land value likely in the nine-figure range for the 39 operational vending machines, it begs the question: what is the company's long-term strategy for these machines? While shareholders may jokingly hope the answer is "AI datacenters" to temporarily boost the share price, it has become increasingly clear this novelty is slowly wearing off with customers.