On Carvana's most recent earnings call, CFO Mark Jenkins told reporters something that was either very confident or very stupid: "We don't sell loans to related parties."
An auto dealer in Buffalo, New York just called him a liar—with documentation.
The Receipts
A 14-year veteran of the car business posted evidence on Reddit showing that Carvana is absolutely selling loans to Bridgecrest, a lender owned by Ernest Garcia II—the father of Carvana CEO Ernest Garcia III.
Here's what happened: A customer came into the dealer's shop to trade in a 2012 Volkswagen Passat. The car had Arizona plates, Carvana plate frames, and the customer said the loan was "through Carvana."
The actual lender? Bridgecrest.
When the dealer called Bridgecrest for a payoff quote, they acknowledged the loan but refused to email or mail the payoff—which the dealer says is highly unusual. The customer had to screenshot the loan details from his account, which clearly showed Bridgecrest as the lender.
This isn't a one-off. The dealer says he's seen this pattern before: Carvana originates the loan, ships the car, and quietly sells the paper to Bridgecrest—a company owned by the CEO's father.
Why This Matters
If Carvana is selling loans to a related party and not disclosing it properly, that's a huge problem. Here's why:
1. It inflates revenue. When Carvana sells a loan, it books revenue immediately. If they're selling to a related party at inflated prices, they're making their financials look better than they are.
2. It hides risk. If Bridgecrest is buying loans that other lenders won't touch, Carvana is offloading bad debt to a related party instead of taking the loss. That's not transparency—that's a shell game.
3. It's potentially fraud. Public companies are required to disclose related-party transactions. If the CFO is saying "we don't do that" when they clearly do, that's either incompetence or a lie. Neither is good.
The Garcia Family Connection
Let's be clear about who we're dealing with. Ernest Garcia II—the dad—made his fortune in used cars and has a history with regulators. In the 1990s, he was involved in the Lincoln Savings and Loan scandal and was banned from banking.
Now his son runs Carvana, and the family controls both the company and a major lender that does business with it. That's a massive conflict of interest, and it's exactly the kind of setup that should make investors nervous.
What Carvana Says
On the earnings call, CFO Mark Jenkins was adamant: "We don't sell loans to related parties. We disclose our related party transactions, and there's no ambiguity about that."
Except there clearly is ambiguity, because a random dealer in Buffalo just produced a loan that says otherwise.
Carvana's disclosure says they "may" have related-party transactions, but they claim everything is properly disclosed. If this dealer's evidence is legit—and it sure looks legit—then either Carvana's disclosure is incomplete, or the CFO doesn't know what his own company is doing.
The Bull Case (If You're Feeling Generous)
Maybe this is all above board. Maybe Bridgecrest is buying loans at fair market value, and everything is properly disclosed in the footnotes of Carvana's 10-K. Maybe the dealer is missing context.
But here's the problem: if you have to dig through 200 pages of SEC filings to figure out whether the CEO's dad is propping up the company, that's not transparency—that's opacity dressed up as compliance.
The Bear Case (If You're Paying Attention)
Carvana has been on the brink of bankruptcy before. They burned through cash, loaded up on debt, and their stock collapsed from $370 to under $4 in 2022. They've since rebounded, but the underlying business is still shaky.
If they're selling loans to a related party to juice the numbers, that's not a recovery—that's financial engineering. And when the music stops, retail investors are the ones left holding the bag.
What Should You Do?
If you own Carvana stock, this should make you very nervous. At a minimum, it's a red flag that deserves serious scrutiny. At worst, it's evidence of accounting fraud.
Carvana has until their next earnings call to address this publicly. If they don't, or if their explanation doesn't add up, sell. Don't wait for the SEC investigation—by then, it's too late.
If you're short Carvana (like the dealer who posted this), congratulations—you just got ammunition. But be careful: short squeezes are real, and Carvana has a history of wild volatility.
The Bottom Line
When a CFO says "we don't do that" and a random dealer shows up with receipts proving they do, somebody's lying. Either the CFO is wrong, or the dealer is wrong. Given the documentation, I know where I'd place my bet.
If Carvana wants to prove this is all legit, they should release a detailed breakdown of every loan sold to Bridgecrest over the past two years. Until then, this stinks.
