How to Use Carvana to Buy a Car

If you’ve come across a Carvana listing during your car search or passed a Carvana vending machine along the highway, you might be wondering what the used car retailer is and how it works. Carvana presents itself as a new way to buy a car. But is it better than the old way? We did the important research to help you decide.

First, the basics of what Carvana is: Carvana is an online car retailer that allows you to purchase a new car completely online without setting foot in a used car dealership.  While buying a car online might seem unsettling, it has become an attractive purchase option and has gained popularity in the covid era. But given the amount of time you spend in the car dealership during the car buying process and all the paperwork that goes along with it, you might also be wondering how buying a car online is even possible.  

What is Carvana?

Although online car buying might not have been buzzed about until the wake of the COVID pandemic, Carvana has been selling cars online since 2013. 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. However, the vast majority of vehicles on the site are five-years-old or newer. Carvana’s inventory includes more than 15,000 vehicles, which have each gone through a thorough 150-point inspection process.

While buying a car online might seem unsettling, it has become an attractive purchase option and has gained popularity due to its convenience. But given the amount of time you spend in the car dealership during the car buying process and all the paperwork that goes along with it, you might also be wondering how buying a car online is even possible. 

Here’s what happens if you decide to skip the dealership and buy a car through Carvana:

Step 1: Find Your Vehicle

Carvana vehicles are listed on many used car search engines like iSeeCars.com and Autotrader so you might come across a Carvana listing among inventory from traditional dealerships while looking for a used vehicle. Or, if you know you want to purchase a car online through Carvana, you can use the search engine on Carvana’s website that includes its inventory of over 21,000 vehicles. You can search by make, model, body type, year and mileage, and by features. We found the price search especially helpful. You can search by your price range, or you can enter how much money you’re putting down and your desired loan term, and it will estimate your monthly payments.

It will also ask if you are trading in a car. If you do have a trade-in, you can enter your vehicle’s VIN or license plate and answer a few quick questions to get an instant offer. You can then better estimate how much you will put toward your down payment. (Check out our article about Selling a Car to Carvana that details the process).

Each listing on Carvana.com includes 360-degree photos and clearly states any imperfections such as dents or dings that the vehicle might have. Every listing also links to a free CARFAX history report that provides helpful information like accident history, maintenance records, odometer readings, and if it was used for personal or commercial purposes. 

Carvana only sells one-owner vehicles that have never been in a reported accident, so the CARFAX report should verify that information. Each Carvana vehicle is subject to a 150-point inspection, and the results are posted with each listing. Lastly, each vehicle is backed by a 100-day, 4,189-mile limited warranty.

If you were purchasing a vehicle through a traditional dealership, now would likely be the time that you’d test drive it to see if it matches your needs. When you buy a car with Carvana, you forego a traditional test drive. Instead, you test drive the vehicle when it’s delivered (we’ll get to that later). If this scares you from proceeding, know that each Carvana vehicle comes with a seven-day money-back guarantee. Think of this return policy as an extended test-drive in your day-to-day environment. 

Step 2: Trade-Ins and Financing

So you’ve found the car you’re looking for and are ready to make a purchase. That was easy! Now it’s time to get the ball rolling. Click the “Get Started” button, where you will be asked to create an account if you don’t have one already.

After you enter your personal details, it will ask you if you have a trade-in. If “yes,” then press the “get offer” button, if “no,” then select “I don’t have a trade-in.” If you created an account and already have an offer on your vehicle, then your offer will load. Your offer will be good for one week. After you have your offer, you’ll apply your trade-in to your purchase and complete the process with the purchase of your vehicle. Before you accept any trade-in offer, make sure you do your research to determine how much your car is worth. 

The next step is to select one of three financing options. You can select “finance through Carvana,” “pay with cash,” or “third-party financing” from an outside lender such as a bank or credit union. It’s also worth noting that the listed car price is final with no room for negotiation, as Carvana provides no-haggle pricing. Financing through Carvana

If you opt to finance through Carvana, it will ask you to enter your date of birth and income. Then they will perform a soft credit check, which won’t harm your credit score, and will provide you with a pre-qualified financing offer for your auto loan. The default is a 72-month loan, the maximum allowed, which you can shorten. This offer will be valid for 45 days.

Keep in mind that Carvana provides financing to even customers with bad credit who might otherwise have trouble securing financing from outside lenders. While there is no minimum credit score required, you must make at least $833 per month to qualify for financing. Also, you must be at least 18 years old and no co-signers or co-applicants are allowed.  

Paying With Outside Financing

For this step you should have your pre-qualification ready and your information handy. You will need to enter your loan details during this part of the purchase process. 

Paying with Cash

If you’re paying with cash you will select that option and proceed to the next step. 

Step 3: Select Delivery or Pickup 

Next, it’s time to select if you want to have your vehicle delivered to you or to pick it up at a nearby car vending machine. If you live within a local market, you can have the vehicle delivered to your door at no charge.  If you live outside its delivery market, Carvana hires a third party to deliver your vehicle — and costs range from $199 to $1,000. To save on delivery costs, you can drive to the nearest vending machine or take advantage of Carvana’s Fly and Drive program, which will reimburse you up to $200 toward airfare to one of its vending machine locations. Carvana will pick you up from the airport, and then you can drive your car home.

While many Carvana vehicles offer free delivery, we found that despite being in a major market, some used SUVs in our search had a $590 delivery fee. You still have to pay this fee if you pick up your vehicle from the vending machine.