After massive downsizing and huge losses, the used car sales company, Carvana, faces what could be its last chance to turn itself around. In a sign of how desperate Carvana’s problems are, its stock has fallen 94% in the past year. Many shareholders assume their investment could go to zero. According to The Street.com, “The investors currently own over 80% of the company's debt and could halt Carvana's restructuring plans.”

Carvana lost $1.4 billion. It became clear the company had a severe cash problem. High used car prices and interest rates were partially to blame, according to the company. Management said, “We came into the year significantly overbuilt for the sales volume we ultimately realized, and we underestimated the speed and the magnitude of the rapid rise in short-term interest rates we ultimately saw in 2022 and the transitory impacts it would have on our business.” It shared that “overbuilding” with many tech companies.

But what does this mean for the future of Carvana?

Carvana faces the same competition it always did. These are local used car companies, some of which are owned by major auto manufacturers. There are thousands of places to buy cars online and in person. A scarcity of new cars has made their efforts to sell used cars more aggressive. Carvana’s business model is already broken, and the competition is too stiff.

Carvana has had other issues, including major legal troubles. Here’s a look at one of the recent issues that has led Carvana to their current sticky situation.

A North Carolina man bought a $68,000 Maserati car from Carvana for his wife's birthday, and months later learned that it's a stolen car. This was a big purchase for Jason Scott. On the paperwork from Carvana when Scott purchased it, it says the car is a 2021 model, but during service, the technician notes state that some of its parts were from a different year of the same model. After further investigation, it was discovered the car is not a 2021 model, but instead a 2017 Maserati.

"When they checked the VIN number on the chassis, that's when they saw that it was a stolen vehicle. The VIN on the car on the window and the car door was different.” Police were called and Scott said he was questioned. After he showed proof he bought the Maserati from Carvana, he was free to go but since the car is a stolen vehicle, police impounded it.

Scott promptly called Carvana. At first they wanted the car returned, which was not possible. Scott does have an attorney who sent Carvana a letter with his demands, which were $1 million in compensation for losses, both financially and reputation, and a public apology.

Carvana did send a letter in response to Scott's attorney, which said in part that Carvana denied any prior knowledge that the vehicle was stolen when they purchased it, and apologized for his experience. The letter states a customer advocate with Carvana told Scott they would refund the money he had already applied to the purchase or he could swap into another vehicle of his choice and also offered him $1,000 as a gesture of goodwill.

The North Carolina Attorney General's office said they are investigating Carvana as they have 130 complaints against the company, but are not aware of any complaints involving selling stolen cars.

This is part of Carvana’s downfall, customer frustrations are more than just this story. And the results may signal the end for this online car shopping site.

It appears as if this online used car dealer are getting their ducks in a row to go under. It’s an outcome that’s not yet confirmed, but it’s looking increasingly likely by the day. This could be the end for Caravan.

There is so much more to discuss on this, put your comments below and let’s start the conversation.

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Lauren Fix, The Car Coach is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.