"Even with an uncertain stimulus package, even with current unemployment levels, the demand is really strong," Vroom Chief Executive Paul Hennessy told Reuters. "As the V-shaped recovery hit us in May, we've been doing everything in our power to add cars because customers want them."
Hennessy spoke to Reuters the day after Vroom posted second-quarter results.
Investors were disappointed in Vroom's third-quarter revenue forecast, sending its stock down more than 15%.
Hennessy said Vroom's forecast reflects the fact its average selling price has "come down a lot as a result of the pandemic."
Americans typically become more frugal and favor used cars in uncertain times.
"It is a lower revenue, but we're expecting to make more dollars per unit than we thought," Hennessy said. "So the numbers that really matter - the profit that we make from the car - are intact."
Online sales still only account for around 1% of the roughly $840 billion Americans spend annually on around 40 million used cars. But after numerous U.S. states went into COVID-19 lockdowns in March, the advantage of socially-distant online sales has come squarely into focus.
Hennessy said sales in pandemic-hit states like California, Texas and Florida remain "very strong" and Vroom has seen a 20% increase in demand in U.S. cities.
"That's either people who want to get away for a week and need to exit the city," he said, "or there's a migration from the cities to suburban areas and we think customers are securing cars because they've got a new life."
By Nick Carey