Summary: Carvana enables people to buy and sell used vehicles directly from their phones and have them delivered to their homes. Though the company enjoys positive ratings across various review sites, many customers complained about experiencing prolonged delivery, terrible customer service, and other irregularities. A deeper dive into customer experiences teaches us that you may want to think twice before working with this company.
Whether you are in the market for a vehicle and trying to avoid traditional dealerships or just wondering what it’s like to purchase a vehicle from a giant vending machine, it is safe to say that Carvana has piqued interests across the country. However, you may wonder how safe and legit it is and whether it’s worth your time. All the answers you seek are here; keep reading.
Table of Contents
- Carvana Company Information
- What is Carvana?
- Is Carvana Legal and Safe or a Scam?
- Is Carvana Reliable and Trustworthy?
- The Pros and Cons of Carvana
- How Does Carvana Make Money?
- Best Alternatives to Carvana
- FAQs
Carvana Company Information
| Official Website: | Carvana.com |
| Founded: | 2012 |
| Founder: | Ernest Garcia II, Ben Huston, Ryan Keeton |
| Location: | Tempe, Arizona, United States. |
| Contact: | 1 (800) 333-4554, https://www.carvana.com/help/ |
| Social Media: | Facebook, Twitter, Pinterest, LinkedIn, Instagram |
What is Carvana?
Carvana is an online used car retailer known for its multi-story car vending machines. It is a relatively new company on the auto dealer scene, advertising in-house financing, top-quality vehicles, and even a 7-day money-back guarantee if you aren’t satisfied with your vehicle. In addition, they offer delivery where the vehicle is brought to your home, or you can pick up the vehicle at one of their many locations across the country and experience a Carvana Vending Machine.
They sell used vehicles and even offer trade-in options if your vehicle meets their standards. Carvana also purchases vehicles that pass their inspections and quality standards from the public. They are entirely mobile, managing sales through the website and even the Carvana application on smart devices.
In a nutshell, Carvana is a modern way to purchase a vehicle, allowing customers to avoid physical auto dealerships and car sales agents. Instead, they streamline the car-buying process by listing all available vehicles on their platforms.
Is Carvana Legal and Safe or a Scam?
While it may be convenient to purchase a vehicle online or even through a mobile app, there will always be reservations and questions about the website and application’s legality and safety. Carvana is currently only available in the United States, and its website is totally legal.
Many sensitive and personal data is collected during the application process. The good news is that if you withdraw from the purchase or wish to cancel your account, it is as easy as reaching out to the company via the contact form at the bottom of their webpage. In addition, there’s no evidence suggesting that the website steals sensitive data or contains viruses.
Is Carvana Reliable and Trustworthy?
The legitimacy of Carvana’s website has been covered, but that doesn’t necessarily mean the company itself is reliable and trustworthy. The reviews on the site are very positive and boost confidence in the company and overall process. On TrustPilot, Carvana has a 3.7/5 stars rating from 5,896 reviews, while on Dealer Rater, the company has 4.1/5 stars from 9,262 reviews. On the Carvana website itself, the company has a 4.7/5 stars rating from 168,691 reviews.
However, Carvana also has its fair share of negative reviews and complaints. Several customer experiences outlined where the company fails to deliver vehicles on time, provide proper documentation and plates for vehicles, and provide decent customer service. Customer service is reported to be extremely difficult to get in contact with, to begin with, and if they get one, customers have been forced to wait for too long for reimbursement and refunds.
These complaints may be acceptable and looked over for companies selling smaller products, but Carvana isn’t selling a $10 iPad case; they are handling thousands upon thousands of dollars from individuals. It is scary to think that if a case/complaint is not appropriately managed, the customer may not see a dime of the money refunded or any acceptable resolution at all.
Although Carvana claims each car passes a 150-point inspection and is 100% accident-free, many reports of vehicles having pre-existing damage and even accidents are on record. And while the company does have an extended car warranty for their vehicles, customers have had to go to great lengths to get the damage covered. These reviews give reason to believe Carvana is not reliable or trustworthy.
The Pros and Cons of Carvana
| Pros | Cons |
| Convenient | Terrible Customer Service |
| Trade-in option | Unreliable delivery |
| Money-back guarantee | Documentation discrepancies |
| Flexible financing options | Vehicle inspections are unreliable |
| Nationwide locations | Agent knowledge is lacking |
| Wide variety of vehicles | Payment issues when selling/trading in your vehicle |
How Does Carvana Make Money?
Like any used car sales company, Carvana makes a profit by selling the vehicles they purchase for a higher amount than they originally paid. However, because they also offer in-house financing, they make money from the interest charges and additional fees that come with their loans.
Best Alternatives to Carvana
If purchasing from Carvana is not something you want to risk, or if the experience does not seem worth it, here are some alternatives for your used vehicle needs:
- Vroom
- CarGurus
- Cars24
- ACV Auctions
- CarMax
- Driveway
- Auto Trader
- Cazoo
Frequently Asked Questions
What happens at delivery?
When you purchase a vehicle from Carvana and choose to have it delivered to your home, there are a few things to know.
- A representative will haul the vehicle to you, and once it is unloaded from the auto hauler, they will sanitize the inside of the vehicle.
- You can test-drive the vehicle to ensure it is in good shape and satisfactory, and then you sign the documents left in the vehicle with any required documentation.
- After this, the representative will double-check to make sure everything is correct and call to confirm the completion of the sale.
Does Carvana price match/Can you negotiate prices?
No, Carvana does not offer price matching or negotiations. The price listed on their website and mobile app are the final prices of the vehicles.
How is financing determined?
Carvana uses a combination of credit history and income and considers the vehicle’s cost to determine available financing options.
How do I return the vehicle?
If the customer is unsatisfied with the purchase, they can contact Carvana to set up a time for a representative to come and collect the vehicle within the first 7 days.
How does the vending machine work?
If someone chooses to retrieve a vehicle from one of Carvana’s Vending Machines, the customer will receive a specialized coin upon arrival. The coin is then inserted into the vending machine, which activates it and begins the process. The vehicle is then lowered from the loading bay to the ground, where the customer takes possession of it.
Is Carvana in legal trouble?
Carvana is currently under investigation and has numerous class-action suits against it for its practices. These are spread across multiple states in the U.S. and are due to the company’s failure to deliver documents, tags, registrations, etc., within the legal timeframe required.
Is Carvana cheaper than a dealership?
While Carvana makes purchasing a car quick and relatively easy, price is definitely something to consider when comparing the two. Buying a car from a giant vending machine may be fun, but customers may be overpaying for vehicles just for the experience.
Dealerships can negotiate prices and even have sales on certain cars throughout the year. However, Carvana prices are set firmly and non-negotiable, so you will often get a better price at a physical dealership.
Read More:
FAQs
Is Carvana safe 2022? ›
Carvana is a legitimate and trustable company. If you don't want to drive to multiple dealerships or haggle over prices, Carvana can be a wise choice. The company offers online listings that make the process simple and quick. In addition to delivery and pickup, Carvana offers financing for nearly anyone.
What is the controversy with Carvana? ›The company is facing lawsuits from customers in multiple states involving alleged issues over titles and registration and over purchasing vehicles. Michigan Secretary of State Jocelyn Benson also suspended the retailer's license, with Carvana suing in return.
Is Carvana in financial trouble? ›After a number of years of massive vehicle sales growth and thus revenues, Carvana hit a wall in 2022. The massive Adesa acquisition added a lot of debt and more expenses, but management eventually realized it couldn't continue on its then current path.
Which is better CarMax vs Carvana? ›Which Is Better: Carvana or CarMax? Carvana is a better option if you look for convenience and ease of use in your purchases and trades. On the other hand, CarMax is ideal for people who want to test drive the car beforehand and who do not mind going to their nearest CarMax location to do it.
Why is Carvana banned in some states? ›Online car dealer Carvana has been barred from doing business in Illinois over issues with consumers receiving vehicle registrations and titles.
Why is Carvana closing? ›Carvana reported declines in revenue, profit and sales compared with a year earlier. Morgan Stanley pulled its rating and price target for the stock following the results. Analyst Adam Jonas cited deterioration in the used car market, company's debt and a volatile funding environment for the change.
Where did Carvana go wrong? ›Carvana's poor financial results
The company has consistently borrowed money to cover losses. They've also borrowed money in the past for growth plans as they finance. The most shocking aspect of the earnings report is the amount of cash the company has burned through.
Carvana is an online used car retailer based in Tempe, Arizona. The company is the fastest growing online used car dealer in the United States and is known for its multi-story car vending machines. Carvana was named to the 2021 Fortune 500 list, one of the youngest companies to be added to the list.
Will Carvana buy cars in bad condition? ›Are there any requirements my trade-in must meet to be accepted? Yes. Carvana will accept your vehicle if it is newer than 1992, the odometer is in working condition, and we are able to safely perform a test drive. We'll also accept vehicles where registration is expired (except for California).
Does Carvana overcharge on cars? ›Prices Are Higher
We've seen it many times. Carvana spikes up the cost of all cars in their inventory to make sure you're the one covering the costs of their business model. We guarantee you, you're much more likely to find great deals on used cars at one of our car dealerships under Prieto Automotive.
Are there complaints against Carvana? ›
Overview. Carvana has a consumer rating of 1.35 stars from 365 reviews indicating that most customers are generally dissatisfied with their purchases. Consumers complaining about Carvana most frequently mention customer service, delivery date and point inspection problems. Carvana ranks 218th among Car Buying sites.
How many people is Carvana laying off? ›(WJW) – Carvana is laying off 8% of its workforce, which is about 1,500 people. On Friday, a message from the CEO went out to employees telling them about the layoffs.
Can Carvana return your car after buying it? ›Yes! All Carvana cars come with a 7-Day Money Back Guarantee. If you decide you don't like the car during those first 7 days, please contact us and any of our Advocates can help set up a return or exchange for you.
Who is Carvana's biggest competitor? ›- CarGurus.
- Vroom.
- CarMax.
- Auto1 Group.
- ACV Auctions.
- Cars24.
- TRED.
- Cazoo.
Are Carvana's vehicle prices negotiable? We don't negotiate on pricing; our vehicles are priced as competitively as possible and we never add on any dealer charges.
What is Carvana being investigated for? ›KSF's investigation is focusing on whether Carvana's officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws.
Why did Carvana fail? ›At its peak, Carvana sold 200,272 vehicles during the first six months of 2021. But Carvana reported its first decline in sales in the first quarter of 2022 as rising interest rates, falling used-car prices and inflation-wary consumers formed the ultimate trifecta that hurt the company's growth prospects.
Is anyone approved with Carvana? ›99% of customers who apply get approved and your terms are good for 45 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.
Are car prices expected to go down in 2023? ›In the U.S., the Manheim Used Vehicle Value Index — which measures the prices dealerships pay for used cars at auctions — hit a high of 257.7 in January 2022 and has since fallen to 222.5 in January 2023. Overall, J.P. Morgan Research predicts used car prices will decline by roughly 10% in 2023.
Was Carvana on Shark Tank? ›PHOENIX --(BUSINESS WIRE)-- Carvana (NYSE: CVNA), a leading e-commerce platform for buying, selling and financing used cars, will appear on “Shark Tank,” airing Sunday, Jan. 6 at 9 p.m. ET on ABC Television.
Who is behind Carvana? ›
No one has lost more than Ernest Garcia III, the 40-year-old founder and CEO of Carvana. His fortune soared to over $11 billion at Carvana's peak in August 2021.
Is Carvana losing business? ›Yet by 2022, on $12.8 billion in revenue, the company reported almost $2.9 billion in net losses. The fall started in 2021. Carvana stock plummeted 98% from its 2021 peak, and some believe the company's story may end in bankruptcy.
Does Carvana change the oil? ›Free Oil Change
This falls into the "of course" category, but as part of that inspection we told you about, we also change out your vehicle's oil and check all the fluids.
The average car gets in 10,000 to 12,000 miles per year, so used cars with an annual average lower than that can be considered as having good mileage. Simply divide the odometer number by the car's age in years to determine it's annual average.
Is it safe to sell with Carvana? ›Both trade-in and sales of used vehicles on Carvana can be touchless and safe. When you enter your car information online and agree to sell to Carvana, you can schedule a vehicle pick up at your home. Or, drop off your vehicle at one of their car vending machines.
Does Carvana have hidden fees? ›Additionally, when you buy online with Carvana, there are no hidden fees associated with your purchase of a vehicle, since we have no overhead costs associated with maintaining a physical dealership or sales personnel. The listed price is the price you can expect to pay.
Are there hidden fees with Carvana when selling a car? ›The only fees Carvana will charge you are 1) sales tax, which is inevitable and 2) a possible delivery fee if your car is coming from a different region (IE, you live in Texas but bought a car currently located in New York).
What is the best online site to buy a car? ›- Best online reputation: Kelley Blue Book.
- Best for consumer reviews: Cars.com.
- Best for deals on used cars: CarsDirect.com.
- Best for variety: Autolist.
- Best selection of inspected used vehicles: Carvana.com.
- Best for shopping around: CarGurus.
Drivers are always busy when they're on the road, but they know that these updates give you the peace of mind that your car is safe and that your delivery is on-time. As a result, you should feel free to tip them as a “thank you” for considering your needs.
Where does Carvana get most of their cars? ›We source our vehicles a variety of ways: auctions, trade-ins, partnered dealerships and customers who sell their vehicle to Carvana. Those vehicles are rigorously inspected to ensure they meet our high standards.
Is Carvana actually successful? ›
Trade publication Automotive News tracks companies by volume of vehicles sold every year. The latest data shows that in 2021 Carvana sold over 425,000 vehicles, giving the company its number two spot after used car behemoth CarMax . But the sky-high demand that made Carvana a Wall Street star would also bring it down.
How do cars come down from Carvana? ›“Our customers are provided with a large, silver, Carvana-branded coin to drop for their vehicle to vend down, spin, and disperse into a delivery bay in order to be driven out.”
What happens after Carvana takes your car? ›If I sell my car to Carvana, how and when will I be paid? We have two different ways you can choose to get paid: Physical printed check handed to you at the time of your appointment. ACH direct deposit into your checking account and payment typically deposits within 1-2 days of Carvana receiving your car.
How long does Carvana take to pick up your car? ›We generally estimate your pickup or delivery appointment to take 30-60 minutes. This includes everything such as your new vehicle review, processing your trade-in vehicle (if applicable) and completing your paperwork.
Does Carvana test drive your trade-in? ›We'll ask you to come out, leave the title and keys inside the vehicle you're planning to trade-in and take the paperwork to sign while we test drive your vehicle. Vehicle sanitation: Once we're back from test driving your vehicle, we'll unload your new one and sanitize the keys, shifter and steering wheel!
Why is Carvana being sued? ›Their complaint against Carvana opens a new front in legal challenges faced by the auto retailer. A separate lawsuit filed in Pennsylvania on behalf of customers, for which class-action status is also being sought, alleges that Carvana committed fraud and other offenses by failing to timely register their vehicles.
Why is Carvana worth more than CarMax? ›Physical Locations
Likewise, you can test drive cars. But having physical locations means CarMax also deals with higher overhead costs, which could translate to you paying a higher price for your car. On the other hand, Carvana's process is mainly online, and lower overhead costs could result in better prices.
They differ in that VROOM charges a delivery fee, while Carvana offers free delivery and more pickup locations if you are outside of their market coverage area. Additionally, Carvana also has more than three times the inventory of VROOM.
Does Carvana have high interest rates? ›Carvana rates, fees and terms
Financing from Carvana ranges from 3.9% to 27.9%. Loan terms last from one to six years, and the exact amount you can borrow depends on your income, FICO credit score, desired loan term and the car you want to purchase.
Yes! When you purchase a car from Carvana, you will receive a complimentary 100 Day Limited Warranty and our 7-Day Money Back Guarantee. This will allow you to return or exchange* the car if it isn't right for you. We also offer optional protection plans to extend coverage and provide additional peace of mind.
Why is my Carvana down payment so high? ›
Your down payment is based on the results of your Carvana Financing application which looks at your credit history, yearly income, and the price of the vehicle. Some options to lower your down payment include: Trading in a vehicle that you could apply to your purchase.
Is there a class action against Carvana? ›The action seeks compensation for alleged losses on behalf of Carvana investors and accuses the Tempe, Ariz. -based used-car retailer of fraudulent activity between May 6, 2022, and June 24, 2022, according to a release today from law firm Levi & Korsinsky.
Can Carvana return your car after they buy it? ›Our 7-Day Money Back Guarantee begins the day you receive the vehicle, regardless of time of day. During that time, you can drive it for up to 400 miles and return or exchange it for any reason.
Is there a advantage in using Carvana? ›Pros for using Carvana
Car quality and vehicle history: Many of the cars on Carvana's site look nearly immaculate and each one comes with a history report from Carfax. Return policy: The seven-day return policy is a “no questions asked” affair. The vehicles go through a 150-point inspection.
Trade publication Automotive News tracks companies by volume of vehicles sold every year. The latest data shows that in 2021 Carvana sold over 425,000 vehicles, giving the company its number two spot after used car behemoth CarMax .