My Honest Review of Carvana: Is It Worth It?

https://www.findthebestcarprice.com/author-ftbcp

Geoff Cudd

Geoff Cudd

I am a serial entrepreneur and a consumer advocate. When I’m not helping car buyers, I love working on ventures that have a positive impact.

I run a cause marketing agency and serve on the board of Vayu Global Health where we are disrupting the medical industry and preventing the needless deaths of mothers and babies during childbirth.

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Used car buying and selling—from home. That’s Carvana’s pitch.

Our expert editors are avid car guys and are here to find out if Carvana delivers on that promise.

Let’s take an in-depth look at how Carvana works and see how they stack up to all the hype in this review.

Carvana Review Video

What Is Carvana?

Carvana is an online used car dealership that performs most of the functions of a traditional car dealership over the web. You’re able to buy a used car from home, trade or sell your old car, and sign the paperwork digitally.

It's a great way to reduce the time it takes to buy a car, and the best part is that you don't have to step foot in a dealership.

You can have the car delivered or pick it up from one of Carvana’s “vending machines" (shown below).

Is Carvana Legit?

Yes, Carvana is a legitimate company listed on the New York Stock Exchange as CVNA. The company was founded in 2012 in Tempe, Arizona by Ernest Garcia III, Ryan Keeton, and Ben Huston. However, it's worth noting there have been some recent lawsuits and complaints against Carvana.

What Is Carvana Marketplace?

Carvana Marketplace allows you to purchase a vehicle from a third party on the Carvana platform.

One of the biggest advantages is that Carvana acts as a “neutral third party" that is designed to protect both the buyer and the seller. The buyer knows that the third party has been properly vetted. Also, the seller is protected because Carvana collects the payment and sends it to the seller after the delivery is completed.

Currently, Carvana Marketplace has a select number of third-party used vehicle sellers who are considered among the most trusted in the nation.

How Does Carvana Work?

You can buy or sell a car online at Carvana.com without ever visiting one of their locations. The car will be shipped to your home or you can pick it up from one of their fancy, high-rise vending machines. Since they’re an online dealership, they can keep costs low and pass the savings along to consumers.

Let’s look at how buying and selling work.

How do You Buy a Car Through Carvana?

1. Search all vehicles on Carvana.com (filter your search by make, model, keyword, price,  features, etc).
2. Head to the car’s profile page where you can examine it with a 360-degree view.
3. Read vehicle details to look up the vehicle’s VIN and history report for free.
4. If you choose to buy that vehicle, click “Get Started” and create an account.
5. Select to pay in cash, via trade-in, or through financing. Carvana offers in-house financing that you can pre-qualify for on their site.
6. Choose delivery or pickup, and complete the remaining paperwork.
7. If you chose delivery, the vehicle will arrive at your doorstep within days. If you selected pick-up, then you will need to find the closest Vehicle Vending Machine.

How do You Trade-in or Sell a Car Through Carvana?

1. Go to the Carvana sell page and choose "Get My Offer".
2. Input your vehicle’s information, including the VIN, mileage, features, color, condition, accident history, etc.
3. Carvana makes you an instant cash offer that is good for 7 days.
4. Schedule an appointment for a Carvana representative to inspect your vehicle.
5. If your vehicle passes the inspection, Carvana gives you a check on the spot and will pick-up the car.

Check out our full guide on selling to Carvana >>

How is Your Trade-in Value Calculated?

Carvana's online appraisal tool will ask you questions and use your answers to determine the value of your vehicle. They also factor in your vehicle's history on Carfax and Autocheck, the KBB value, and the local market value. In many states, you will only pay sales tax on the price of your new car minus the value of your trade.

What Documents Does Carvana Need?

If you're looking to purchase a vehicle, you will need to provide a government-issued photo ID and proof of income.

If you're looking to sell your vehicle, you will need to provide proof of ownership of the vehicle. Also, you will need to provide a photo of the odometer if you are attempting to sell the vehicle to Carvana online. Finally, you will have to provide a copy of the vehicle registration with the names of everyone who is authorized to drive the vehicle.

How Long Does It Take for Carvana to Verify Documents?

Typically, Carvana will take anywhere from 1 to 2 business days to verify documents.

Carvana Fees – What’s the Catch?

Carvana promotes themselves as a free online dealership, but they have to make money somehow, right?

Does Carvana Have Hidden Fees?

Carvana goes out of its way to express that they do not have hidden fees on any of its vehicle purchases. The company explicitly lays out how much you will pay upfront. On all transactions, you pay the following:

• The price of the vehicle
• Sales tax is required by the state
• Delivery fee if your vehicle is coming from a different region

Be sure to check your contract before making any final purchasing decisions.

Does Carvana's Price Include Tax & Title?

The tax and the title are not included in the vehicle price. However, the tax, title, and possible delivery fee are the only outside costs that you would have to pay beyond the vehicle price.

How Does Carvana Make Money?

Part of the way Carvana makes its money is through the cars it sells. The profit is earned whenever a car bought is sold for more than it was purchased for, including inspection costs.  And while many car deliveries are free, Carvana also charges for delivery in some cases.

Carvana also makes money from their financing options and additional warranties that you can purchase.

More on these later.

What Is Carvana’s Delivery Fee?

Carvana charges between $190 and $599 for delivery, and prices vary based on where you live.  Local deliveries are usually free, but you will need to review each car listing to get an exact price.

In many cases, the shipping cost is fully refundable.  If you decide to return within your 7 Day Money Back Guarantee, you'll only be responsible for the transport of the vehicle you keep.  That means, even if you choose to exchange the vehicle you received for another, you won't be responsible for the delivery charge of more than one vehicle.

Out of Market Delivery

There is a $599 non-refundable delivery charge to have your car shipped long distance.

Touchless Delivery

Carvana Touchless Delivery helps protect you from COVID with delivery right to your driveway.  All vehicles are dropped off with limited interaction with the delivery truck driver, the interior and keys are sanitized, and the paperwork is left inside the car.

Can You Pay the Delivery Fee With a Credit Card?

Carvana does not accept credit card payments, but you can roll the delivery fee into your car loan.

Carvana Warranty

Carvana car purchases come with a 7-day money-back guarantee, a complimentary 100-day/4,189 mile limited warranty, and a 150 point inspection.

Carvana also has two types of premium coverage for your vehicle, CarvanaCare and Gap Coverage. These both come at an additional cost. CarvanaCare is an extension of your original warranty, while Gap Coverage covers the outstanding balance on your car should it be totaled or stolen.

Is CarvanaCare Worth It?

Many used cars sold by Carvana are still covered under the manufacturer’s original warranty. CarvanaCare is essentially an extended warranty covering certain major car repairs like engine or transmission replacement.

You’ll pay a premium for CarvanaCare as well as a $50 deductible for any service visits at a repair facility you choose. The amount you pay will vary based on the model, mileage, and coverage level you select and typically ranges between $20-80/month.

We’re not fans of extended warranties, but Carvana’s warranty pricing is on the low-end compared to most traditional dealers. It becomes worthwhile on high mileage cars and brands prone to expensive repairs. You’ll have to assess your own risk tolerance and weigh the cost to determine whether the additional warranty coverage is worth it to you.

Check out our full review and breakdown of CarvanaCare >>

What Is Carvana’s Return Policy?

Carvana’s return policy begins on the day you receive your vehicle and lasts for one week. During that time, you can drive up to 400 miles and return the car for any reason. If you drive the car over 400 miles you will be charged $1 for each additional mile. Refunds are processed right away, but Carvana states it could take 7-10 days for the money to show up in your bank account.

How Does Financing Work With Carvana?

1- Get Pre-Approved

You can quickly get pre-qualified for an auto-loan in about 2 minutes. Once you are pre-qualified, you can then see real terms and actual monthly payments for each vehicle. Your rates won't change unless your information changes or your terms expire after 45 days.

Getting pre-qualified with Carvana will not impact your credit score because they only run a "soft pull" of your credit history.

2- Select a Car and Finalize Your Application

After you are pre-approved, you can select and hold a car. Then, if you want to move forward with financing through Carvana, they will run a hard credit inquiry.

You’ll need to provide proof of income documents like your 2 most recent paystubs or your last 3 months of bank statements showing direct deposits.

3- Payoff Your Existing Loan Balance

If you are trading in a vehicle and still have an auto loan, you’ll need to pay off the remaining balance. To do this, you’ll need to call your current lender or go to their website and get a 10-day payoff amount. This is a formal document that will give Carvana the payoff amount to purchase your existing vehicle, including 10 days worth of interest.

4- Buy the Car

Review your contracts and sign them electronically in as little as 10 minutes. You then submit your down payment information and select a delivery or pick up time.

For your down payment, you can either have the funds withdrawn from your bank via an ACH transaction, transferred via Plaid, or you can provide a cashier's check.

Can You Pay Off Your Carvana Loan Early?

Yes, there is no penalty for an early loan payoff. If desired, you can also increase your monthly payment amount to gradually pay down the loan and reduce your loan length.

How Does Carvana Handle Leases?

Does Carvana Lease Cars?

Carvana doesn’t offer vehicles for lease.

However, if you are looking to lease then there are other good options available including LeaseTrader [Review] or Swapalease [Review]. It may still be worth comparing lease options from those companies to vehicles for purchase from Carvana.

Will Carvana Buyout Your Lease?

Carvana does offer lease buyouts if you sell directly to them, but unfortunately, not if you trade-in a vehicle.  They will need a formal dealer payoff quote containing your current lease payoff amount.

Currently, Carvana will not buyout leases from the following:  Acura, Ally, American Honda Finance Corporation, BMW Financial Services, Hyundai Motor Finance, Ford Motor Credit, GM Financial, Infiniti Financial Services, Kia Motors Finance, Mercedes-Benz Financial Services, MINI Financial Services, Nissan Motor Acceptance Corp, SouthEast Toyota Finance, Telsa Lease, US Bank, and Volvo Financial Services.

Carvana Review - The Good & Bad

Pros: Here's What I Like About Carvana

• You can complete your purchase entirely online, and get touchless delivery.
• They have competitive used car prices with great pre-purchase car photos, 360 images, and detailed car descriptions.
• They offer loan options for consumers with all types of credit with no hard credit inquiry required for pre-qualification.
• Carvana accepts trade-ins with online appraisals.
• All Carvana vehicles pass a 150-point inspection, have clean titles with no reported accidents, fire, frame, or flood damage. You will get a free CarFax report to view the history of the vehicle.
• Every vehicle sold by Carvana includes a 7-day test-own period, during which you can return the car for a refund.
• Carvana’s includes a 100-day (4,189) limited warranty period, and you can purchase an extended warranty called CarvanaCare.

Cons: Here's What I Don't Like About Carvana

• They don't offer new cars and have an extremely limited supply of electric vehicles.
• One of the most commonly reported issues in Carvana customer reviews is around the 7-day test period and the warranty. While the warranty seems like a great safety net, several customers shared feedback of major problems when trying to get certain repairs handled.
• There is no test drive prior to purchase, which is a big downfall when it comes to buying used. While there is a week-long return period, you still have to buy the car in order to try it out.  Personally, I can't imagine buying a car without test driving it first.
• Some people also experience difficulties with the car vending pickups, like missing keys and other delays.
• Poor support quality post-purchase. Compared to other options, Carvana is lacking in support availability and it can be difficult to get in touch with them. For any repair support, you have to go through their warranty provider, SilverRock which is a major complaint reported on forums.
• Sellers may receive offers that are lower than what you could get in a private sale.

Can You Negotiate with Carvana?

Carvana is a haggle-free dealership, so you cannot negotiate car prices.

They do not negotiate trade-ins or price match outside appraisals either. They analyze current market data of vehicles similar to yours and give you their single best offer.

Carvana offers low used car prices, but it is not always the lowest possible price depending on the vehicle. Used car shopping is a volume game and the more listings you review, the better your chance of finding a hidden gem.  To make sure you are getting the best deal, we recommend searching for similar used cars on several websites like those listed below.

Alternatives to Carvana

There are many alternatives to Carvana that provide a similar service. Carvana only connects you with the car in their virtual dealership, so it’s important to also consider the competitors below.

• Peddle: Peddle gives sellers an instant offer for their vehicles. They claim to provide a simple, modern way to sell your car online. Read our full review of Peddle.
• Vroom is another online used-car dealership that also offers financing options. Read our full review in this post and check out Vroom vs Carvana.
• Carmax. CarMax is a national chain of used car dealerships with a strong online presence as well.  They also offer curbside pickup and delivery options. Read our full review of CarMax here and check out CarMax vs Carvana.
• Shift. Shift is a digitally-driven company that offers car buying and selling. Shift owns all the cars they sell and offers haggle-free pricing. Read our full review of Shift here.
• Sam's Club Auto Program. Sam’s Club, powered by TrueCar, offers competitive pricing on new and used cars for its members. Read our full review here. 
• Rocket Auto. Their goal is to improve the car-buying experience through customer-centric shopping. Read our full review of Rocket Auto here.

Frequently Asked Questions

What is Carvana?

Carvana is a fully-online used-car dealership, which allows you to buy and sell used cars from the comfort of your home. Carvana allows users to get their used vehicle delivered to their home or dropped off at a local Carvana "car vending machine".

Is Carvana Free?

Carvana only charges for tax, registration, and the price of the car. However, you can also purchase additional warranties and you may have to pay a shipping fee if you have the vehicle delivered to you. The seller, however, does not pay any extra fees to Carvana.

Can I trust Carvana?

Carvana is a completely legitimate company without any hidden fees. Carvana will only charge for tax, registration, and the price of the used car. Carvana even offers its own financing options and extended warranties.

How do I buy a car on Carvana?

You can search on Carvana by make, model, keyword, price, features, and more. Users can then get a detailed report and 360-degree view of the used car. Once the financing options are finalized, users can opt to get the vehicle delivered to their home or pick it up at a local "vehicle vending machine".

How do I sell a car on Carvana?

Once you enter in your vehicle's information, which can include VIN, mileage, accident history, and color, Carvana will make you an instant cash offer that is valid for 7 days. If you accept the offer a Carvana representative will inspect your vehicle before handing over a check.

Does Carvana check credit?

Carvana uses only a soft credit pull, and their co-founder Ryan Keeton states that the company “extends credit to customers with a broad range of credit profiles.” To qualify for Carvana, you do not need the same kind of credit that you may at other dealerships. While there is no minimum credit score, Carvana provides sample rates for its financing program starting with credit scores of 588. You must make at least $10,000 annually and be free of any bankruptcies.

How long does it take Carvana to verify income?

It generally takes one or two days to get approved once you apply for financing through Carvana. During that time, the car is held for you and other visitors will see “purchase pending”. Loans are underwritten by Carvana’s captive financing company, Bridgecrest.

Can I get a car through Carvana with bad credit?

Yes, Carvana works with all types of credit as long as you meet basic eligibility requirements.  You must be 18 or older, make at least $4,000 per year, and have no active bankruptcies.

How long does it take Carvana to pay off your loan?

If you are trading the vehicle in, they will payoff the loan the day after your 7 Day Money Back Guarantee ends.  If you are selling the vehicle, they typically payoff the vehicle 5-7 business days after your appointment is complete.

What are alternatives to Carvana?

Some of the major alternatives to Carvana include Vroom, Carmax, and dealerships with online marketplaces.

Can you delete your Carvana account?

Yes, you can request that your Carvana account be deleted by speaking to a Carvana customer service rep. However, if you have filled out financing information on their site, due to federal law they must keep that information and will be unable to delete your account.

Does Carvana sell used trucks?

Yes, Carvana has a large variety of used pickup trucks in stock. However, they do not currently sell vehicles such as RVs or motorcycles.

Does Carvana sell electric cars?

Carvana does sell electric cars, but they have an extremely limited supply. When last checked in 2021, they only had 4 electric vehicles in stock.

Does Carvana sell new cars?

Carvana currently only sells used vehicles but they meet high standards with a 150 point inspection and many come with the original manufacturer’s warranty.

Does Carvana change its offer?

In most cases, Carvana will not change the offer. The only case where the offer may be altered is if the vehicle has been badly damaged from the time they provided the offer to the time that you agree to sell the vehicle.

How much does Carvana charge for delivery?

Carvana can charge anywhere from $190 to $599 if you live outside of the region where the vehicle is located. If you live within the region where the vehicle is located, then there is no delivery fee.

How long does it take for Carvana to pay you?

Carvana will pay you, in full, for your vehicle anywhere from 1 to 2 business days after they have received your vehicle. You will receive payment to your bank account via ACH transfer.

How long does it take Carvana to pick up your car?

Carvana will take about 30 minutes for pick-up and delivery appointments. Typically, Carvana will arrive no later than one hour to pick up cars.

Does Carvana inspect cars?

Carvana inspects the vehicles that they receive in their inventories. Also, the company will perform an inspection on all vehicles that are offered to them.