IDK how much principal can be recovered. For used cars, depreciation is slower, but most cars purchased with financing are upside down immediately. You would recover a fraction of the principal after paying the repo man and then reselling the car at a wholesale auction.
Is this the case for used cars? What is a typical down payment for Carvana? Also, I assume they wouldn’t have to sell the vehicles at auction, since they could use their own platform.
Someone I knew in the used car business told me that the bottom-feeder used car lots would take a down payment that was more than what they paid for the car, wait for the borrower to get behind, repo it themselves, and repeat the cycle. No middlemen needed.
