Ernest Garcia III
Co-founder 2012Background
Ernest Garcia III joined his family business, DriveTime Automotive Group, in 2007, where he quickly recognized the limitations of the physical dealership model and envisioned a different way to buy a car: a 100% online experience where customers could browse inventory, secure financing, and schedule delivery without ever speaking to a salesperson. His defining founding philosophy was that the car buying experience should be entirely frictionless, leading him to incubate Carvana within DriveTime in 2012 to test a 100% online purchasing model before spinning it out as an independent entity, a decision that altered the competitive landscape of the $1.2 trillion used car industry.
Role at Carvana Co.
Carvana was founded in 2012 by Ernest Garcia III (Ernie), Ryan Keeton, and Ben Huston, but its origins are controversially intertwined with a legacy used car operation: DriveTime Automotive Group. Ernie Garcia III is the son of Ernest Garcia II, a successful but controversial billionaire who pleaded guilty to bank fraud in 1990 during the Charles Keating savings and loan scandal. Following his probation, Garcia II built DriveTime, a 'buy here, pay here' used car dealership empire that catered specifically to subprime borrowers. Ernie Garcia III grew up immersed in the harsh, lucrative economics of the used car business. However, rather than simply taking over his father's traditional dealership empire, Garcia III recognized a vulnerability in the industry: the complete lack of digital innovation. In 2012, operating as a subsidiary incubated within DriveTime, Garcia III and his co-founders launched Carvana. The foundational vision was to build the 'Amazon of used cars.' They digitized the transaction, allowing a customer to secure financing, sign documents, and purchase a vehicle entirely from their couch, with the car delivered on a flatbed truck the next day. While Carvana heavily relied on DriveTime's infrastructure in its early years (purchasing inventory and leveraging its reconditioning centers) it was eventually spun out as an independent entity prior to its 2017 IPO. Garcia III's brilliant, aggressive application of Silicon Valley e-commerce principles to the archaic, entrenched used car industry disrupted the American automotive landscape.