Buying a Used Car From Carvana

Vehicles are seen on a display at a Carvana dealership in Austin, Texas, on Feb. 20, 2023. (Brandon Bell/Getty Images)

From August 2019 to August 2022, used-car prices increased by 52 percent, while new cars increased by 29 percent. And with soaring interest rates, it was challenging for many Americans to afford a new, let alone a used vehicle. Looking for options to buy a car became vital.

Founded in 2012 and based in Arizona, Carvana offers an innovative and convenient way to purchase a vehicle. But how does Carvana work, and can you save money buying a used car?

How Carvana Works

Seventy percent of cars sold in the United States are used, and buying one can be nerve-wracking. Going to a high-pressure dealership or used car lot is intimidating for some people. That’s where Carvana comes into play.

Carvana is an online used-car hub that offers a no-pressure convenient alternative to car shopping. The website allows people to search for and purchase a car entirely on their own time. You can skip jumping from dealership to dealership and sit at your computer and shop. And you don’t have to worry about haggling over price.

Carvana offers a selection of 25,000 vehicles available both in your area and from one of their 261 markets in 31 states plus Washington, D.C. Each vehicle has undergone a “150-point inspection.”

How to Find a Car on Carvana

On the Carvana website, you can search for a specific model or general category. If you want a “small SUV,” you can search for one. If you want a 2021 Ford Explorer, the filter will also let you search for that.

You can also search by other filter options, for example, price, color, year, etc.

Once you find a car you’re interested in, you can look at its profile. You’re provided with an interactive 360-degree view of the actual in stock vehicle. And you see multiple images of its interior. You can also click the vehicle identification number (VIN) to look up the vehicle’s history for free.

Unfortunately, you won’t be able to test drive the vehicle before purchase.

How Does Carvana Deliver a Car?

How you take delivery on a Carvana vehicle depends on where you live. If you live in one of its local markets, Carvana delivers your car on one of their trucks on an appointed day. This is usually done at no charge. But sometimes, even if you’re local, there’s a delivery charge.

You can search for a make or model without shipping charges.

For those not living in a local market, you pay a non-refundable shipping charge to have your car delivered by a third party. The shipping cost can be added to your financing. You won’t receive your shipping cost back if you return the car.

You have seven days to decide if you want to keep the car. And you have a 100-day or 4,189-mile limited warranty.

Another option for delivery is to go to the local market. Carvana will reimburse the cost of your plane ticket up to $200 if you decide to keep the car. If you live near one of their 24 vehicle vending machines, you'll receive a token you insert into it. The machine automatically retrieves your car and slides it into a garage-style loading bay. From there, you can drive your car away. Keep the token as a souvenir.

Does Carvana Offer Financing?

Financing is available at Carvana, even if you have bad credit. But depending on your FICO (Fair Isaac Corporation) score, the terms can be expensive. You may want to go to your own bank or credit union instead.

You can fill out forms online when you select your vehicle. And the rate quote won’t impact your credit score. Your quote to shop at Carvana is good for up to 45 days.

Does Carvana Cost Less Than Dealership?

The vehicle purchase price on Carvana’s website is fixed. There’s no negotiating. Depending on the vehicle, Carvana is somewhat competitive compared to what you might purchase at a dealership. For larger, newer SUVs, you may find the dealership less expensive, though.

If you want a deal at Carvana, look for listings labeled “Good Deal” or “Great Deal.” Also, look for “Free Shipping” filters if you want a car eligible for free shipping.

How to Sell a Car to Carvana

Carvana takes trade-ins and will also purchase your vehicle outright.

They only accept trade-ins or cars for sale in local markets. If you don’t live in a local market, you'll need to take your car to a local market to sell it or trade-in to Carvana.

If you’ve traded in your car, it’s held for seven days while you decide if you want to keep your Carvana car. If you don’t keep the car, Carvana will return your trade-in.

If you want to sell your car, input the license plate number, VIN, and your vehicle, then click “Get My Offer.”

You’ll be asked several questions about the condition of the car. If Carvana accepts your car, you’ll receive a cash offer that’s good for seven days.

Once you accept the offer, a Carvana representative will come to your home to inspect your vehicle onsite. If it passes, the representative will cut you a check on the spot. You’ll usually receive a higher price than selling to a dealer.

Carvana a Good Used-Car Option, but Use Caution

Carvana has been hit with some legal issues. Several suits from states claim buyers were sold cars without titles. Carvana was banned from selling cars in Michigan until lawsuits were settled. So, ensure you receive the proper documentation when purchasing a vehicle.

But despite these problems, Carvana is just another version of online shopping. And it’s a viable option if you’re looking for a used car. It’s also a good deal if you want to sell your car.

The Epoch Times Copyright © 2023 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.