Carvana is an online service selling used cars based in Atlanta, Ga. and boasts it will allow you to skip the car dealership or craigslist ad and select, purchase, and receive your new wheels without moving a muscle. Carvana insists buying a used car through them will save almost $2000 in fees charged by dealerships and also give you a much better experience.
How is Carvana different from buying a car from a used car salesman?
Carvana is attempting to take the uncertainty, confusion, and hassle out of purchasing a used car. To do so, they promise to eliminate several things that used to come with the process. First of all, the entire browsing process is online so you don’t have to trudge through a giant used car lot to find your car.
This is what a typical search page looks like for vehicles:
As you can see, they show you the Blue Book price (a popular guide for determining the value of used cars) vs. the Carvana price and show you the savings.
Click on a car and it takes you to an interactive image that you can drag to view the car in 360 degrees.
If you click on the Features and Imperfection List you can see everything about the selected used car, including any damage.
If you click Start Tour it will walk you through the interior and exterior and go over everything right and wrong with the car.
If you decide you like this particular car, you click Start Purchase. This is where the complexities begin, however, Carvana claims to guide you through the process as quickly and painlessly as possible – the quickest purchase to date for a cash transaction is currently listed as 15 min 36 seconds. (We’ll get to the nitty gritty of the payment options in a sec.)
Then, once you’ve signed on the virtual dotted line, they state your new used car can either be picked up at one of their Vending Machines or will be shipped right to your door, totally clean and ready to go.
And you never had to deal with a guy in a bad comb-over and loud suit!
Carvana Guarantee and Refund Policy
After you have bought your used car, Carvana promises it won’t be a lemon. They claim to take every car they sell through an extensive certification process. This includes:
- 150 point inspection
- Carvana says they don’t buy any cars that have been in accidents
- They spend $250 in detail work to make it look shiny and new
- They give you a free Experian AutoCheck vehicle history
- They give a free oil change
- They make sure you have the car’s manual, often missing from used vehicles
Carvana’s used cars are all guaranteed for 100 days or 4,189 miles, whichever comes first (they say this number is based on the 41.89 miles average commute).
But what if you find out the car is a clunker? Carvana gives you a chance to “Test Own” it, meaning you have 7 days to drive it around and if there are any obvious major problems you notice, they’ll refund your money and haul it away. BUT:
- It has to be in the same condition you got it
- You can’t have driven it over 400 miles (otherwise pay $1 per mile)
- You can’t have gotten in an accident
- You will have to pay to ship it back to them if you are outside of the Atlanta, Dallas, or Charlotte area.
Carvana Delivery Trade-In and Pick Up Options
Carvana gives you the opportunity to trade in your existing car but you must get it to Atlanta, Ga. Carvana also allows you to pick up your car via their Vending Machine located in midtown Altanta. You can fly-in, take it for a test drive, and if you buy it they’ll pay $200 of your one-way ticket. (Carvana also has outposts in Dallas and Charlotte.)
Carvana Outside Delivery Area Options
If you don’t live near Atlanta, Dallas, or Charlotte you can have your car delivered BUT:
- You pay the delivery fee (it was estimated to be $1250 to deliver to California)
- You also pay the return delivery if there are any problems within 7 days
- Carvana uses a third-party shipping company to deliver your car to you
- You can take it for a test drive before signing for the car
Carvana Purchase Options
You can buy your car with “cash” (meaning ACH transfer via your bank’s routing number), you can use credit from your bank, or you can use Carvana’s financing tool, which they insist is transparent and easy to understand. Carvana uses an interface that looks kind of like a car gage, where you can see and adjust your down payment, interest rate, and monthly payment to get a total picture of what you will pay.
In addition to the sticker price, you will have to pay:
- State/local tax
- DMV fees (Carvana says they will do the paperwork for you)
- Car insurance
- Delivery fees, as noted above
Okay, that all sounds cool – what’s the downside of Carvana?
Well, if you are outside of the Atlanta/Dallas/Charlotte area, you really won’t be able to “kick the tires” on your vehicle before committing money to ship each way, potentially costing you several thousand dollars.
Carvana insists that every vehicle is thoroughly checked and cleaned before shipping and that their prices are still lower than buying from a dealer even when you factor in shipping charges. They point to not only their glowing customer reviews, but also what they say is their worst review, which is also on their site.
A woman named Carita gave her experience a 2-star rating, due to the fact that the car took too long to ship and it arrived dirty. However, there is also a response and an apology from Carvana, who said they paid the customer a $500 late fee and covered the cost of a detail. (No word as to how Carlita responded.)
Bottom Line: Should I use Carvana to buy a used car?
Carvana is a relatively new company, having launched in 2012, but has expanded so rapidly they took in $45 million last year. Forbes put them at #5 on their list of Most Promising Companies in 2015.
Car and Driver Magazine concluded while they liked the idea and general execution of Carvana, it is still a good idea to take any used car you buy to an independent mechanic first, which you can’t do with a Carvana car. While refunds are possible, they also noted the paperwork process is a huge hassle.
And since Carvana is so new, they don’t have the volume of cars their closest rival Carmax does (1376 vs. 30,000+ in our last check). Carvana also doesn’t have the volume of negative complaints that Carmax does… at least not yet.
Conclusion: If you are local to Carvana locations, this might be a good way to buy a good used car inexpensively, sight unseen. Otherwise, you may be at risk for losing shipping fees, which may take a bite out of the money saved.
When we called Carvana, a representative we spoke with told us the most important thing to do when purchasing from them is to make sure the car you buy is really the one you want. To do this, he encouraged us to visit a local used car dealership to test drive the model, but then actually buy from Carvana.
But then that means you have to deal with…
Let us know your experience with Carvana below!