Whether you believe in Carvana's (NYSE: CVNA) potential or think it's doomed, most investors are aware it has a serious cash burn problem and that its growth has come to a crashing halt. However, it has an equally big problem some overlook: its soaring interest expense.

Let's explain Carvana's interest expense problem and compare it to rival CarMax (NYSE: KMX), which has more than twice the debt but a small fraction of the interest expense concern.

Let's first look at a graph that emphasizes not only how quickly Carvana's interest expense has soared but compares it to cash and cash equivalents and also shows why it's worse than it looks.

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Source Fool.com