Many of us looking to buy or sell a car online have the same question: is Carvana a good deal?
Carvana lets you buy and sell used cars online on Carvana.com or in the Carvana app. There’s zero negotiation involved — the price is the price. And if you choose, you can even have your car delivered right to your door.
But like every online service, Carvana definitely has their pros and cons (plus their fair share of unhappy customers). How does Carvana work? Is selling better than buying? Is CarMax better than Carvana? We dug into the details to answer the question you’re dying to know: is Carvana a good deal? Whether you’re selling your car or hoping to buy a used one, this guide will give you the info you need to decide if Carvana is right for you.
What is Carvana?
Carvana specializes in buying and selling cars online. With Carvana, you could buy a car 100% online and skip hopping from dealership to dealership (and avoid pesky salespeople trying to make a decent buck). Carvana offers a selection of 25,000 cars, all of which are inspected and reconditioned by technicians and have no fire, frame, or flood damage according to Carfax and AutoCheck.
How buying a car through Carvana works:
Buying a used car from Carvana is done completely online. You can browse the inventory on Carvana.com, choose a car, and then select your payment method. If you have a car to trade in, you’ll include those details in the buying process, too.
You can also finance your car purchase through Carvana or indicate the bank or credit union you want to work with. The last step is to choose whether you want your car delivered or to pick it up yourself from a Carvana “vending machine” location near you.
Carvana’s out-the-door prices are usually better than dealership prices.
Many online reviews say Carvana’s prices are higher than the dealership’s. But here’s the thing: the dealership’s main goal is to make as much money as they can from each sale. Plus, car salespeople make a commission on every car they sell, so the more you pay, the more they benefit. Even if you’re able to negotiate with the dealer, you’re probably saving on an inflated price to begin with.
Since multiple factors play into the vehicle’s price at both dealerships and Carvana (e.g., location and market demand), it’s important to pay attention to your out-the-door price. This is the final price you’ll pay with all taxes, added fees, and delivery costs included.
Dealerships tend to charge a hefty amount of added fees on top of the vehicle’s list price, like:
- Local taxes, title, and registration costs (vary by state)
- Inspection
- Destination fee (for the car to get from the manufacturer or another lot to the dealership)
- Advertising fee
- Dealer prep
On the other hand, Carvana only charges you the following fees:
- Local taxes, title, and registration costs (vary by state)
- Any extras you choose to add (like CarvanaCare or GAP coverage)
- Any shipping or delivery charges (if applicable)
I will note that Carvana offers free delivery for many cars, but that’s not always the case. If you live far from where the car will ship from, you could be looking at shipping costs as high as $1,000. In that case, it’s probably worth comparing prices to your local dealership.
TIP: As you browse cars on Carvana, look for listings labeled “Good Deal” or “Great Deal” to find the best values. You can also search cars eligible for free delivery by using the Free Shipping filter as you search.
Every Carvana car comes standard with a 100-day (or 4,189 miles) warranty.
When you buy a car from Carvana, it automatically comes with a Limited Warranty that’s valid for 100 days or 4,189 miles (whichever comes first). The warranty protects your car against mechanical or electrical failures, including:
- Engine
- Suspension
- Roadside Assistance
- Transmission
- A/C & Heating
- Steering
Under the limited warranty, you’ll pay a $100 deductible for repairs at a Preferred Repair Facility or $350 if you take your car to a Non-Preferred repair facility.
Each car also comes with a 7-day return policy. If you don’t love your car after driving it for seven days, you can return it for your money back. Just keep in mind that shipping charges are nonrefundable. And obviously, you can’t return the car if it’s been damaged since you bought it.
You can finance your car through Carvana, but interest rates may be higher.
According to Carvana, 80% of buyers choose to finance their car through Carvana. Even though Carvana offers easy and flexible financing, they definitely have their pros and cons.
The biggest downside is that you’ll likely pay the maximum APR, so it’s possible you’d find better interest rates through another lender. The good news? Carvana has a long list of banks and credit unions they work with to meet your financing needs. But they don’t work with some big ones, like Chase, PNC, TDBank, and Wells Fargo.
On a more positive note, you can prequalify for Carvana financing without it affecting your credit score (they’ll only do a soft credit check), and you don’t need a super high credit score to qualify. Also, Carvana allows you to cosign your loan in most states, which can potentially help you get a lower interest rate.
Be cautious — several states have sued Carvana over claims they sold cars without titles.
In the past couple of years, Carvana has been challenged with some legal issues, and as a result, a big drop in their stock price. Several states have sued the company claiming buyers were sold cars without titles. In fact, Michigan banned Carvana from selling cars in their state as the lawsuits play out.
With all that going on, rumors were even circulating that Carvana might go bankrupt. These rumors are unproven, but whether that impacts your decision to work with them is up to you. From what I can see, this is more concerning for investors and those who own stock in the company.
If you’re choosing between CarMax and Carvana, CarMax is slightly better overall.
Many people want to know which is better: CarMax or Carvana. Both companies are highly competitive with one another, so it makes sense that their offerings are pretty neck and neck. But when you take a look at the big picture, CarMax comes out on top for a few reasons.
For one, you have the chance to test-drive your car before you buy it from CarMax, which is not something you can do with Carvana. Additionally, CarMax has a longer return policy window, more cars available in their inventory, and many more locations where you can pick up your car.
| Carvana | CarMax | |
|---|---|---|
| Test Driving | Not Available | 24-Hour Test Drives |
| Return Policy | 7-Day Money-Back Guarantee (up to 400 miles) | 30-Day Money-Back Guarantee (up to 1,500 miles) |
| Financing | Prequalification with No Impact on Credit Score | Prequalification with No Impact on Credit Score |
| Warranty | 100 Days or 4,189 Miles | 90 Days or 4,000 Miles |
| Inventory | 25,000 Cars | 45,000 Cars |
| Delivery Fees | Free on Select Cars, up to $1,000 on Others | Free on Select Cars, up to $1,000 on Others |
| Pickup Locations | 34 Locations Nationwide | 242 Locations Nationwide |
Carvana only comes out on top with their warranty — which covers you for 10 more days (or nearly 200 more miles).
Selling your car to Carvana usually gets you a pretty good deal.
Selling your car through Carvana is definitely easier and less stressful than buying. Instead of putting a sign in your car window with your phone number, posting it on Facebook, or driving around to used car lots, Carvana can give you a real offer online in a matter of minutes. If you accept, they’ll send someone to inspect your car, and if it meets their standards, they’ll cut you a check.
To sell your car on Carvana, it has to meet a few requirements:
- It must be newer than 1992
- Your odometer has to be in working condition
- Carvana must be able to safely perform a test drive
The price you’ll get for selling your car depends on a few things, like market demand and your car’s condition, model, mileage, and year. Some people claim Carvana bought their car for more than it was worth brand-new, so they actually made money off the sale. Other reports say Carvana typically provides the highest possible price for used cars (excluding private sellers) and offered a price quite a bit more than its Kelley Blue Book value.
Currently, used cars are in extremely high demand, so it could just be the nature of the current market. But if you’re selling your car in good condition, it’s worth getting a Carvana quote.
Overall, is Carvana a good deal?
Buying with Carvana
The concept of Carvana comes down to the same basic nature of online shopping — you’re taking on more risk for the benefit of convenience. You really can’t beat the ease of Carvana’s fully-online offerings, especially when you’ll avoid the haggling, added fees, and shady sale strategies from dealerships. But just like any online purchase, you should always shop with caution. So if you compare prices, read all the terms, and ensure you receive all proper documentation, yes, Carvana can give you a good deal on a used car.
With that said, CarMax offers some competitive features, and some are better than Carvana’s. If you’re serious about buying a car, you may want to evaluate both options.
Selling with Carvana
Carvana is a good deal when it comes to selling or trading your used car. Most of the process is done online in a matter of minutes, and you’ll often get a higher price than selling through a used car dealership or privately through other channels. So if you want to get the biggest bang for your buck, selling your car with Carvana is definitely worth considering.
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