Carvana Review: Is it as good as advertised?
Carvana claims to provide a high-quality, hassle-free used vehicle buying and selling process online. Is this online dealer right for you?
If you’re able to find an incredibly well-maintained vehicle with smooth delivery, then the answer may be yes, but this is not always the case. Here is my honest review of Carvana.
In this post, we’ll break down how Carvana works and explore the pros and cons of selling and buying vehicles on this online platform.
Table of Contents
- What is Carvana?
- Is Carvana Legit?
- Is Carvana Free?
- How Does Carvana Make Money?
- How Does Carvana Work for Trade-ins?
- Does Carvana Check Credit?
- How do You Buy a Car Through Carvana?
- How do You Sell a Car Through Carvana?
- Carvana Review - The Good & Bad
- Is it Possible to Beat the Carvana Online Experience?
- Alternatives to Carvana
- Best Car Deals by Category
- Frequently Asked Questions
What is Carvana?
Carvana is a fully-online used-car dealership that also offers direct financing for the vehicles it sells. Ideally, you can buy a used car from the comfort of your home. You’re able to browse their online catalog and complete the purchase via their website or app. You can have the vehicle delivered directly to you or pick it up from one of Carvana’s “vending machines". Other financing options include buying with cash, using your own financial institution, or getting financing directly from Carvana.
If you are selling with Carvana, you get a “firm” offer online within a few minutes. If you accept the offer, then a Carvana inspector will come to inspect your vehicle on-site, and they will cut you a check on the spot if the vehicle passes. You can get offers based on the vehicles VIN number or license plate number. Carvana also has a tool that allows you to get estimates based on a specific model.
Is Carvana Legit?
Yes, Carvana is a legitimate company listed on the NASDAQ stock exchange as true. The company was founded in 2012 and with an A+ BBB Accredited Business rating.
Is Carvana Free?
Carvana only charges for tax, registration, and the price of the car. However, you can also purchase additional warranties and you will need to pay a shipping fee if you have the vehicle delivered to you. The seller, however, does not pay any extra fees to Carvana.
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. Unfortunately, this model used by traditional car dealerships is not very profitable.
Carvana also makes some money from their financing options and additional warranties that you can purchase. While Carvana does show revenue growth, they demonstrate a clear lack of profitability due to their heavily-critiqued business model in an already efficient used-car industry.
How Does Carvana Work for Trade-ins?
Carvana offers trade-ins as well. You can get a trade-in appraisal and then use that value toward buying another vehicle from their site in your local market within 7 days.
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 do You Buy a Car Through Carvana?
- Search all vehicles on Carvana.com (filter your search by make, model, keyword, price, features, etc).
- Head to the car’s profile page where you can examine it with a 360-degree view.
- Read vehicle details to look up the vehicle’s VIN and history report for free.
- If you choose to buy that vehicle, click “Get Started” and create an account.
- 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.
- Choose delivery or pickup, and complete the remaining paperwork.
- 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 Sell a Car Through Carvana?
- Choose “Get My Offer.”
- Input your vehicle’s information, including the VIN, mileage, features, color, condition, accident history, etc.
- Carvana makes you an instant cash offer that is good for 7 days.
- Schedule an appointment for a Carvana representative to inspect your vehicle.
- If your vehicle passes the inspection, Carvana gives you a check on the spot and will pick-up the car.
Carvana Review - The Good & Bad
Pros: Here's What I Like About Carvana
- You can browse the online inventory and complete your purchase entirely online, allowing you to shop for exactly what you want anywhere in the country.
- Competitive prices with a great pre-purchase view and details.
- They offer loan options with no hard credit inquiry required for pre-qualification.
- Carvana accepts trade-ins.
- All Carvana vehicles pass a 150-point inspection and 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
- Any dealer can choose to offer an online purchase option.
- One of the biggest issues Carvana customers have with the service is the 7-day test period and the warranty. While the warranty seems like a great safety net, several customers experience 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 Carvana covers a 150-point inspection, some customers still find issues that they felt should have been caught and reported.
- 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 lacks in support availability and quality. While phone support tends to be strong, it is 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 that customers have.
- Outdated app UI and the checkout experience.
- Sellers may receive offers that are lower than what you can get in a private sale.
Is it Possible to Beat the Carvana Online Experience?
While Carvana offers competitive prices and a fairly easy online experience, it is not the only site that does so. There are several other options available for buying a used car online.
So the answer is clearly yes, you can beat Carvana’s online offerings and here’s how:
- Carvana is considered an online dealer. We recommend contacting 6-8 dealers (local and online) for competitive pricing.
- Don’t forget the fine print. Make sure you closely read Carvana’s listings and the terms and conditions of their 7-day guarantee, limited warranty, additional warranty packers, and more.
- If you have any questions about the car at hand, ask.
- Upon receiving your vehicle, carefully inspect it, and test-drive it immediately. I suggest even taking it in for a full inspection. If any undiscovered defects arise, contact Carvana immediately and document the interactions.
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.
- Private marketplaces like Craiglist, eBay, and Facebook marketplace. Buy and sell directly, and have the opportunity to test-drive first. Some sellers may be willing to ship as well. However, you will not have the 150-point inspection or guarantees made by Carvana.
- Used Car Search Engines like Rydeshopper, Edmunds, and AutoTempest. Many local and franchise dealers publish their used car listings on these websites.
- Swapalease. Have you ever considered buying out someone else's lease? Read my review of Swapalease to see how this works.
- Vroom is another online used-car dealership that also offers financing options. Read our full review in this post.
- Carmax. Shop CarMax certified vehicles or sell yours. You can buy online or visit a nearby CarMax. They also offer curbside pickup and delivery options.
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".
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.
Can you negotiate the price on Carvana?
No, you cannot negotiate the used vehicle price on Carvana. The price listed for the vehicle is what the user pays, without any extra hidden fees.
What are alternatives to Carvana?
Some of the major alternatives to Carvana include Carmax, private marketplaces like Ebay and Craigslist, and dealerships with online marketplaces.