Ernest Garcia II is an American businessman, the owner of DriveTime Automotive, and a major shareholder of Carvana, an online used car retailer.
Garcia’s career began after he left the University of Arizona to become a stock broker, and later a real estate developer, in Phoenix and Tucson. Things took a turn in 1990, when he plead guilty to felony charges of bank fraud related to his dealings with the failing Lincoln Savings & Loan, operated by Charles Keating.
Garcia spent three years on probation, and his firm filed for bankruptcy. He began to turn things around with the purchase of rental car chain, Ugly Duckling. After merging it with his startup finance company, he built a company that sells and finances used cars for buyers with questionable or poor credit histories. The company went public in 1996, but after share prices struggled, Garcia and Gregory Sullivan, the company’s former CEO, took it private and renamed it DriveTime in 2002. It has since become profitable.
His son, Ernest Garcia III, joined DriveTime after graduating from Stanford University, and in 2012 he began building his company, Carvana, as a subsidiary. Carvana later spun off from DriveTime, and the Phoenix-based technology platform has become known as the “Amazon of cars.”
Not wanting to stain his son’s company with his controversial past, Garcia has not held a director or officer position in the business, but he has provided at least $100 million of funding. As a majority shareholder, he also holds significant voting power. Taking his son’s ownership and voting shares into account, the father-son duo retains full control of the company.