How Does Carvana Work?

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Carvana is an online-only used-car retailer that performs almost all the functions a physical dealer would offer: buying and selling cars, accepting trade-ins, and financing purchases. Naturally, the company's site contains a thorough FAQ page, but here's a primer on how it works.

How do I find and buy a car?

It's as easy as going to the Carvana home page and clicking "Search Cars." Vehicles costing from around $7000 to $100,000 are sourced from auctions and dealer partners, trade-ins, and cars Carvana buys from private sellers.

Clicking on a car pulls up the vehicle detail page. If someone else has just begun the purchase process, a pop-up displays how long the vehicle's being held for the other customer. Photos with the "Purchase Pending" graphic have been bought and won't be available again unless they are returned. You can sign up for email alerts for vehicles that return to the available pool. It's also possible to save searches if the desired car isn't in inventory, and you can save cars to "Favorites" to look at later.

Each detail page loads a 360-degree tour of the vehicle, a photo gallery, and a free CarFax report. Carvana says every vehicle is Carvana Certified, meaning it has passed a 150-point inspection, has a clean title, no reported accidents, and no fire, frame, or flood damage.

Clicking "Delivery & Pickup Options" tells you how soon you can have a car delivered to your nearest Carvana market.

Clicking "Get Started" initiates the buying process, which begins by creating an account. Prices aren't negotiable, but the listed price is the out-the-door price before adding registration fees and optional extras. Buyers can apply for financing through Carvana's in-house Bridgecrest Acceptance, use third-party financing, or pay with cash. They can also apply a trade-in, purchase GAP coverage, and add an extended warranty.

To finance through Carvana, the company requires you be at least 18 years old, make at least $10,000 per year, and have no active bankruptcies. Carvana doesn't accept co-signers for financing. Pending verification of the applicant, the finance terms offered are good for 45 days.

How do I take delivery?

Whether you live in a local or non-local market can make a notable difference to your Carvana experience. At the time of writing, Carvana counts 261 local markets in 31 states plus Washington, D.C. If you live in any of those places, Carvana delivers your car on one of its trucks at an appointed day and time, usually free of charge. Some vehicles incur shipping charges even in local markets if there's a "significant transport distance to your location." The site offers the option to search for the same make and model without shipping charges. If a buyer pays for shipping to a local market, the shipping charges are refunded if the buyer returns the vehicle by the end of the seven-day trial period.

If you don't live in a local market, you have two choices. You can pay a non-refundable shipping charge to have your car delivered to your door by a third-party company within a delivery window of "a few days." The shipping cost can be added to the financing. If you return the car, you will get back the amount you paid minus the shipping fee.

Or you can go to a local market to retrieve your car, Carvana reimbursing you up to $200 for a plane ticket so long as you decide to keep the car. A Carvana rep will pick you up in the local market and escort you to your car or to a vending machine if you're in one of the 25 markets that have them. At the machine, you'll be given a token to feed the giant toy box to get your car. If the car gets stuck between the dispenser and the glass, the Carvana rep will kick or tip the vending machine to get the car unstuck. (We might have made that last part up.)

Once you've met the vehicle, a driver's license and proof of insurance gets you a test drive of up to 20 minutes. If you don't like the car, you can send it back right there. If you do like the car, you fill out the final forms and registration paperwork, and it's yours to drive home.

How do I trade-in or sell a car to Carvana?

As part of the buying process, Carvana asks for details on a trade-in. If you plan to trade in a vehicle, you'll be asked to provide standard information such as mileage, features, condition, and accident history. Based on your answers, Carvana will make an offer that's good for seven days.