What Is Carvana and How Does It Work? (2024)

If you'd like to buy a used car, there are now more websites and apps to help you than ever before. One of the more novel options is Carvana. It is an online used car retailer that also happens to sell cars out of vending machines.

The idea of a car vending machine is obviously attention-grabbing. They are, however, just one of the reasons for the company's popularity. So, what is Carvana and should you try it?

What Is Carvana?

Carvana is an online used car retailer. It has physical premises across the United States, but most sales occur online. Its website allows you to inspect cars virtually, and this enables customers to make informed choices without seeing a car in person.

It offers all of the services that you'd expect from a used car retailer, such as buying and selling cars, accepting trade-ins, and offering financing. If you're buying a car, you can have it delivered to your door.

Why Does Carvana Use Vending Machines?

What Is Carvana and How Does It Work? (1)

Carvana currently has 24 car vending machines spread throughout the United States. You don't need to use them, but you can. It's possible that they were designed as a way to attract attention to the company, but they also offer an alternative to having a car delivered.

If you opt to pick up your car at a Carvana location, you will receive a coin that activates the machine. You can then watch as the car is delivered to the ground.

How to Buy a Car Online With Carvana

Buying a car online obviously has its drawbacks. The idea of choosing a car without seeing it in person isn't going to appeal to everyone. Carvana, however, is designed to allow you to inspect each vehicle virtually.

Each vehicle is listed with a 360-degree view. More importantly, there doesn't appear to be any attempt to hide problems. Each dent is not only visible but advertised. The page for each vehicle includes an alert section, which highlights any problems that the vehicle has. The website also provides VIN information and history for all vehicles.

To further alleviate concerns about vehicle condition, each car sold by Carvana has to pass a 150 point inspection. If you find a vehicle that you like, you can purchase it directly on the website. You can pay cash but Carvana also offers both financing and trade-ins.

Related: Websites to Help You Purchase Your Next Vehicle

If you don't want to try the vending machine, Carvana will deliver your new vehicle to your door. The price depends on your proximity to one of its premises. If you live nearby, delivery is handled by Carvana. This type of delivery is either free or paid depending on the distance. But anything you pay is refunded if you decide to return the vehicle.

If you don't live nearby, delivery is outsourced to another company. This type of delivery is always paid and it is not refunded if you decide to return the vehicle.

The obvious issue with Carvana is that you are asked to pay for a vehicle before you've inspected it yourself. To get around this potential problem, all vehicles are sold with a one-week money-back guarantee.

If the vehicle isn't as expected, or you simply decide that you don't want it, it will pick the car back up and refund your money.

How to Sell a Car Online With Carvana

Carvana can also be used as a way to sell a vehicle, and like buying one, the process can be initiated online. In order to receive a quote, you are asked to fill out a questionnaire and provide your vehicles VIN number. Afterwards, you will be given a quote immediately.

Carvana obviously has to check your vehicle in person before paying but the availability of an online only quote allows you to know where you stand. If you accept the quote, Carvana will then send somebody to your house to collect the vehicle. Carvana purchases cars for cash and as trade-ins.

Are Customers Happy With Carvana?

Carvana currently has a score of 2.8 stars out of 5 on Consumer Affairs. While many people are happy with the service, various complaints have been aimed at the company. Some customers report that vehicles arrive with problems that haven't been fully described. Other customers complain that refunds take longer than they should.

How Does Carvana Compare With Other Online Retailers?

What Is Carvana and How Does It Work? (3)

If you like the idea of Carvana, it's worth noting that there are other apps for buying used cars. Here are a few alternative options:

Autotrader

Autotrader is probably the best known website for buying a used car. Unlike Carvana, it doesn't actually sell cars but rather allows you to find people who are. The advantage of this is that it has a massive selection of vehicles to choose from. The website offers a choice of private sellers and dealerships. It also offers new cars and the ability to negotiate on price.

Vroom

Vroom offers an almost identical service to Carvana. It's an online-only used car retailer, it also offers a 150 point inspection of all vehicles, and it delivers to your door. One notable difference between the two is that Vroom charges a non-refundable $599 delivery fee on all purchases.

eBay

eBay allows you to buy almost anything and it has a dedicated section for cars. Unlike Carvana, buying a car on eBay usually means buying a car from a private seller and possibly bidding in an auction. This may allow you to get a better price but it also carries additional risk. You also won't get a warranty.

Carvana Is an Interesting Alternative for Buying a Used Car

If you'd like to buy a used car, Carvana is certainly an interesting option. Buying a used car online is convenient, removes the need to negotiate, and it allows you to spend longer researching your options and comparing prices.

On the other hand, buying a car from Carvana usually means paying for a car before you've seen it. Carvana attempts to provide as much information as possible but many buyers may still prefer the experience of viewing in person.

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What Is Carvana and How Does It Work? (2024)

FAQs

What Is Carvana and How Does It Work? ›

Carvana is an online-only used car retailer that allows you to virtually complete every step of the car buying process including trade-ins and financing without setting foot in a used car dealership. Carvana only sells used cars, which are generally from the last 10 model years.

What are the pros and cons of getting a car from Carvana? ›

Carvana pros and cons
ProsCons
Bad-credit borrowers may qualify for used car loans Seven-day return policy Entire process can be completed online Comes with limited warrantyOnly offers financing purchased through Carvana Comes with high delivery and shipping fees No option to negotiate car prices History of legal issues
Dec 5, 2023

How does Carvana work step by step? ›

We did the important research to help you decide.
  1. What is Carvana? ...
  2. Step 1: Find Your Vehicle. ...
  3. Step 2: Trade-Ins and Financing. ...
  4. Step 3: Select Delivery or Pickup. ...
  5. Step 4: Select or Decline Extended Warranty. ...
  6. Step 5: Upload Your Driver's License. ...
  7. Step 6: Finalize Financing. ...
  8. Step 7: Payment.
Nov 4, 2023

What to expect when buying a car from Carvana? ›

You'll finalize your purchase by completing your payment for any down payment, shipping fees and/or delivery fees. Once you've completed the payment step, you'll schedule your pickup or delivery appointment where you'll select your appointment location, date, and time.

Does Carvana test drive before buying your car? ›

No test drive. Unlike on the lot, you will not be able to take the car for a spin before signing off. This means you may miss exterior damage not revealed by pictures, and you won't have a chance to learn how specific features work before purchasing the vehicle.

Does Carvana have a bad reputation? ›

Carvana Customer Reviews

The company has a rating of 1.8 out of 5.0 through the BBB from over 2,900 reviews. However, it has a 4.3 stars out of 5.0 through Trustpilot from over 9,000 reviews. Positive reviews praise the easy process of selling your car, stating that payment and pickup are a breeze.

What is better, Carvana or CarMax? ›

Both Carvana and CarMax advertise no-haggle pricing, but Carvana offers a seamless selling process that helps it come out ahead in our rankings. We give Carvana the edge over CarMax as a car selling website. Our team rates CarMax just slightly ahead of Carvana for its car buying services.

Can you negotiate the price on Carvana? ›

MARKETWATCH GUIDES TIP: Can You Negotiate With Carvana? Carvana does not negotiate prices on sales or purchases of vehicles. The price you see on an offer is the price you get, with no wiggle room.

Does Carvana really pay you on the spot? ›

Carvana will pay you for your car at your pickup or drop-off appointment. We'll either hand you a printed check or initiate payment via an ACH direct deposit into your checking or savings account (ACH transfers normally take between 2-5 business days).

How does payment from Carvana work? ›

If I sell my car to Carvana, how and when will I be paid? You will receive payment from Carvana at your pickup or drop-off appointment. Options for receiving payment are: Certified Check ACH direct deposit into your checking The ACH transfers normally take between 2-5 business days.

Can you trust selling your car to Carvana? ›

I had a great experience selling my car to Carvana. They made me a solid offer and gave me 7 days to accept. Once accepted, I had a check in my hand within 5 days at pickup.

Does Carvana pay you what your car is worth? ›

If your vehicle is worth more than you owe, you'll receive the difference, or you can apply it toward the purchase of your next vehicle from Carvana.

How does Carvana verify income? ›

What documents can I provide for proof of income? We will need your official employment offer letter along with your first pay stub in order to verify your income.

Does Carvana actually check your car? ›

While not every vehicle is Carvana Certified, all vehicles in our inventory are inspected and reconditioned by quality technicians, and have no reported fire, flood or frame damage according to CARFAX™ and AutoCheck®. Carvana Certified vehicles receive our highest standard of cosmetic reconditioning.

Is it hard to get approved for a car through Carvana? ›

99% of customers who apply get approved and your terms are good for 30 days. There's no impact to your credit and you can see your actual down payment and monthly payment on all vehicles in our inventory.

Do I need to clean my car before giving it to Carvana? ›

There's no need to clean your automobile before selling it to Carvana, as it won't have any bearing on the offer you receive. That said, Carvana asks sellers to take personal belongings out of the car before the scheduled pickup.

Does Carvana affect your credit? ›

No. When you pre-qualify with Carvana, you see real, personalized terms without affecting your credit score. Though your terms will not change, we do complete a formal credit inquiry when you schedule your delivery or pickup.

Does Carvana actually check their cars? ›

While not every vehicle is Carvana Certified, all vehicles in our inventory are inspected and reconditioned by quality technicians, and have no reported fire, flood or frame damage according to CARFAX™ and AutoCheck®. Carvana Certified vehicles receive our highest standard of cosmetic reconditioning.

Is buying a car from Carvana more expensive? ›

Both dealerships and Carvana have comparable prices based on market trends. Carvana does have a “no-haggle” policy, which means that what you see on the listing price is what you'll pay, or at least close to it. You cannot negotiate the costs down when shopping in Carvana.

Can Carvana change their offer after accepting? ›

Your offer from Carvana is valid for 7 days. If the information you provide accurately reflects your vehicle details and condition, your offer will not change. If you submit updated information, we will generate a new offer for you, automatically.

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