And I think as we head to a comp period, as we head into 2021, another thing that happens kind of in another dimension is we start to comp over periods where car prices were higher. So the expected value of those cars were higher, and so the expected residual value of those cars were higher. And therefore, they are kind of less valuable cars relative to expectation that are showing up on dealers’ lots, and therefore most likely, less likely to be held by dealers and so they will probably start to flow downstream to us. So, I think we view that as a definite positive, because it gives us access to additional inventory. We also think that that same dynamic has probably been something of a competitive headwind for us over time, because there’s been a single channel of cars that was just materially better priced than all other channels of cars that were in a competitive market, which is either buying at auction or buying from customers, which is where we’ve been sourcing cars.
And so we think with that kind of competitive headwind being pulled away from us, that’s also positive. So, we look forward to that. I think the point that lease rates going down may change some of the dynamics across the sum of the industry. If we move away from just kind of Carvana specific impacts or independent dealer-specific impacts to the entire industry, I think that point is correct, that fewer cars coming back will change things. But what you have to keep in mind is, those cars were still sold in 2021. Just a larger proportion of them were sold with a loan or with cash. And so what ends up happening then is instead of having a scheduled return of that car to the used car market in three years, you instead have kind of a customer making a decision about when do they want to get their next car, and that will of course have a distribution over time.
But in general, customers still desire to swap between cars. And so we do ultimately expect those cars to come back into the market at the industry level as well, maybe just with a little wider distribution of time. So just to summarize that again, I think these points about the kind of impacts that may occur over the next couple years to the sum of the used retail market, because of reductions in new car sales or reductions in lease volumes, we believe those are correct for the sum of the market. We believe that they are actually benefits to us and to other independent dealers, who have effectively been locked out of access to those cars over an extended period of time. So we look forward to that and we view it as the alleviation of a competitive headwind.
Daniel Imbro : Understood. I appreciate the color.
Ernie Garcia: Thank you.
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Ernie Garcia for any closing remarks.
Ernie Garcia: Great. Well, thanks everyone for joining the call. To the Carvana team, thank you. This is another incredible quarter. I said it in four or five different forums already, but I want to keep repeating it. I think it was incredibly hard for anybody to see us making the kind of progress that we’ve made over the last 12 months from the perspective of 12 months ago. And that’s because we’ve stayed focused, it’s because we’ve kept our heads down, it’s because of the incredible work that you’ve done, and we couldn’t be more grateful. Let’s make sure we keep doing it. Let’s make sure that we learn the lessons that we learned over the last 24 months and just become a better version of ourselves into perpetuity. Thank you. We’ll talk to you guys all again next quarter.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may all now disconnect.
