Hindenburg Research accused Carvana of accounting manipulation in a January 2, 2025 report, but the allegation is not an established finding. Carvana rejected the claims and disclosed that the SEC subpoenaed it in June 2025 for information it believes primarily relates to the report. The company said it was cooperating; its annual-report disclosure does not report a regulatory conclusion.
What did Hindenburg accuse Carvana of?
Hindenburg’s January 2, 2025 report, titled “Carvana: A Father-Son Accounting Grift For The Ages,” characterized Carvana’s recovery as a “mirage.” Hindenburg is a short seller and disclosed a short position in Carvana securities, giving it a financial interest in a decline in the stock. Its allegations and descriptions should therefore be understood as claims by an interested party, not as independently established facts.
The report alleged that Carvana used aggressive auto-loan underwriting and accounting practices, and it questioned the sale and servicing of loans. Hindenburg also alleged that Ernest Garcia II, Carvana CEO Ernest Garcia III’s father, sold shares. The report’s characterizations, figures, and interview accounts are not, by themselves, proof that Carvana misstated its accounts or acted improperly.
Loan sales and a suspected connection
Hindenburg alleged that Carvana sold loans to an entity it suspected was connected to DriveTime. A January 2, 2025 Gizmodo article summarized Hindenburg’s assertion that Carvana sold $800 million in loans to a party Carvana described as unrelated. That amount is a secondary report of Hindenburg’s claim; it is not an amount confirmed by Carvana in the disclosures discussed below.
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Servicing and borrower extensions
Hindenburg questioned whether loan-servicing practices, including borrower extensions, could make loan performance appear stronger than it was. That is an allegation about the effect of the practices, not a finding that extensions were improper or that reported loan performance was manipulated.
What do Carvana’s filings disclose about loans and DriveTime?
Carvana’s 2025 definitive proxy statement reports substantial finance-receivable sales and servicing arrangements, including arrangements involving DriveTime. Those disclosures provide important context, but they do not settle Hindenburg’s claims about a particular purchaser, accounting treatment, underwriting standards, or borrower extensions.
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| Arrangement described in Carvana’s 2025 proxy | Company-reported figure | What the figure covers |
|---|---|---|
| Amended Master Purchase and Sale Agreement with financing partners including Ally Bank and Ally Financial | Commitment for up to $4.0 billion in principal balances | Commitment period: January 11, 2024 through January 10, 2025 |
| Sales under the purchase and sale agreement | Approximately $3.0 billion in principal balances | Sales during 2024 under that agreement |
| Seven transfer agreements tied to securitizations | Approximately $3.8 billion in principal balances | Balances purchased by trusts under the 2024 transfer agreements |
| DriveTime servicing under the Ally agreement | Approximately $87.1 million in gross revenues | DriveTime’s servicing functions during 2024 |
| DriveTime servicing under the 2024 and historical transfer agreements | Approximately $84.5 million in gross revenues | Servicing during 2024 under these and historical transfer agreements |
These are figures Carvana reported in its 2025 proxy for fiscal year 2024, not independent findings. The agreements and revenue categories are distinct and should not be combined or treated as interchangeable. The proxy’s disclosures also complicate a simplified account in which Carvana had stopped selling loans to independent financing partners: it identifies Ally among the independent financing partners and reports sales under that agreement.
Why DriveTime is a related-party connection
Carvana’s proxy identifies DriveTime as controlled by Ernest C. Garcia II, who is Carvana’s controlling stockholder and the father of CEO Ernest C. Garcia III. The proxy also describes other arrangements with DriveTime, including service-contract administration and other services. The company’s disclosed relationship and payments matter when assessing the allegations, but the existence of related-party business does not establish misconduct or improper accounting.
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How did Carvana respond?
In its 2025 annual report, Carvana said that after Hindenburg published its report, it engaged outside counsel to evaluate the allegations and voluntarily contacted the SEC. The company said management reaffirmed its conclusion that the report contained “inaccurate, incomplete, and otherwise misleading information about us.” That is Carvana’s position in its filing, not an independent determination of the claims.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What does the SEC subpoena establish?
Carvana’s 2025 annual report says the company received an SEC subpoena in June 2025 requesting information that Carvana believes primarily relates to Hindenburg’s allegations. Carvana said it was cooperating with SEC staff.
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A subpoena requests information; it does not establish that allegations are true, nor does it amount to a finding of wrongdoing. The annual-report disclosure does not report an SEC conclusion. The sources described here establish the company’s account of the subpoena and its response, but do not establish whether regulators ultimately substantiated or dismissed Hindenburg’s claims.
Quick Recap
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- EFFORTLESSLY MANAGE YOUR FINANCES: Dive into the world of efficient financial management with this accounting ledger book. It's your gateway to tracking payments, deposits, and balances, fostering excellent bookkeeping habits to reach your financial aspirations.
- UNLEASH THE POWER OF UNDATED TRACKING: With an undated accounting book ledger, you're equipped to chronicle every expenditure, regardless of when it occurs. Ample space awaits to meticulously document each transaction, detailing numbers, dates, descriptions, accounts, payment or deposit amounts, and overall balances.
- EMPOWER FINANCIAL SUCCESS: Harness the potential of this accounting log book to analyze your financial endeavors effortlessly. Prepare precise financial statements in no time, allowing you to scrutinize spending and income regularly. Identify and eliminate unnecessary expenses, paving the way for enhanced financial performance and success.
- EXEMPLARY QUALITY: Our accounting ledger book boasts premium quality, crafted from 100gsm paper that minimizes ink leakage, fraying, and shading concerns. The robust and flexible cover shields the pages, while the metal lay-flat twin-wire binding ensures durability and sustained usage.
- VERSATILE UTILITY: Embrace the flexibility of our undated accounting book, enabling you to commence your financial journey anytime, anywhere. Its compact size of 8.6x5.9 inches ensures portability, fitting snugly into any bag for easy access whenever you need it most.
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