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Auto Loans

Carvana Review: Used Car Auto Loan Options



Today, any type of purchase, whether food, clothes, homes, or cars, is all about convenience. COVID-19 has made the online buying process even more important and essential.

Learning from other online car dealerships like Carmax, Carvana has revolutionized the used car-buying process.

Their entire inventory and car purchase process is online, so you never set foot in a car dealership or deal with the hassle of haggling for the best price.

The Carvana website, www.Carvana.com, is convenient for those who hate the car shopping and car buying experience.

About Carvana

DriveTime founded its wholly-owned subsidiary, Carvana, in 2012.

In 2014, Carvana spun off on their own, but their auto loans financing options are still serviced by the auto lender Bridgecrest, which is an affiliate of DriveTime.

Carvana officially became a publicly-traded company on the New York Stock Exchange in 2017.

How Does Carvana Work?

When you go to Carvana’s website, you can pick out the car you want from their inventory.

They have more than 10,000 cars including Honda, Toyota, and Chevy to name a few, and will ship to the 48 contiguous United States.

Their vehicles are all used vehicles with relatively low miles. They offer a 150-point inspection and a free CarFax report with every car they sell.

Carvana’s prices are non-negotiable, so no stressing about haggling prices. They seem to price their used vehicles to be similar to the values that Kelley Blue Book suggests.

Carvana will also accept a trade-in in some cases. This upfront car buying service even touts a “DMV free” registration process.

They take down all the necessary information including the VIN number and your driver’s license information, complete all the registration items at the DMV after your drop off, then give you a temporary license plate until the process is completed.

Once the registration process is finished, you will receive your permanent license plate in the mail.

Carvana Qualifications

You have to make at least $10,000 per year to qualify, but there is no minimum credit score requirement.

This process makes Carvana great for people of all credit profiles, especially those who have a hard time getting approved with traditional auto loan lenders.

There is no hard credit inquiry to get pre-qualified, and you get a pre-qualification decision within minutes.

You also don’t have to worry about any application fees or prepayment penalties. As always, check Carvana’s loan against your bank or credit union, making sure you find the best loan for your budget.

Carvana Perks

7-Day Money-Back Guarantee

Once you purchase the car, you have a 7-day money-back guarantee return policy on your new ride .

Next Day Delivery or Pick-Up

Delivery can be as early as the next day drop off in some locations.

You also have the option to pick up the vehicle at one of their Vehicle Vending Machines if there is one close by.

They have several machines throughout the country, including Atlanta, Georgia, and Tempe, Arizona to name a few.

100-Day Limited Warranty

Each car comes with a 100-day limited warranty or 4,189 miles through SilverRock.

They also offer an extended warranty called Carvana Care if you want a little more coverage.

Pros and Cons of Carvana

Carvana has some pros and cons you should seriously consider before deciding to finance and purchase your used car through their network, especially as your car delivery is the first time you actually drive the car.

Pros:

  • Convenient: Carvana is convenient. Your entire transaction takes place online, so you never have to get out of the house, drive around town to different dealerships, or haggle with the salesperson about the price.
  • No-haggle pricing: Carvana prices their vehicles competitively so you don’t have to haggle. Their prices are in line with Kelley Blue Book value estimates, so you know you’re getting a good deal on a used car.
  • 150-point inspections: All Carvana cars go through a 150-point inspection, so you know the issues have been fixed before purchase. That’s more than you can say for buying a used car from an individual.
  • Pre-qualification in minutes: You can get pre-qualified online in minutes and begin shopping right away. The company suggests keeping your phone or computer close by in case they need to follow up with a phone call or email.
  • No hard credit check until purchase: Your pre-qualification does not require a hard credit check until you find a vehicle and are ready to purchase.
  • No application fee: There is no application fee for Carvana qualification.
  • No prepayment fee: If you want to pay off your car early, you can always pay a little extra or pay a large lump sum, and you won’t be penalized with a prepayment fee.
  • No minimum credit score: If you have bad credit, you can still get qualified through Carvana because they make it easier than traditional lenders.
  • Seven-day returns: Carvana has a test-drive period of seven days. If you don’t like your car in the first seven days, you can return it and get a refund on your down payment.
  • Trade-ins available: Carvana accepts trade-ins, even if you don’t purchase a car from them.
  • Delivery: Carvana delivers for free in a lot of cities. Some locations require a fee for delivery, but you can also pick up your car from one of their vending machines. If you have to fly to a pickup city, they will subsidize a portion of your airfare and pick you up at the airport.

Cons:

  • You are buying sight unseen: The entire process is so convenient that you may forget you’re buying these cars sight unseen. Carvana provides pictures and details online, plus a seven-day test drive period, but you never quite know if you’ll like a car until you see it in person and experience the drive.
  • They only deliver to 48 states: Carvana currently only delivers to the 48 contiguous United States. So, if you live in Alaska or Hawaii, you have to fly to a pickup city for a Carvana car.
  • They only finance Carvana cars: Carvana only provides financing for Carvana cars, which makes sense, but it’s something to keep in mind.
  • They only have used cars: Carvana only sells used cars, so if you would like a new car, Carvana is not an option.
  • You must make $10,000 per year: Carvana requires you to make at least $10,000 per year to qualify for financing. This is a bummer for people who make less than that, but it also protects those who probably can’t afford to buy a car on their limited income anyway.
  • The delivery fee is non-refundable: If you decide to return the car, your delivery fee is non-refundable.
  • Reviews: Carvana is rated an A+ by the BBB, however the company has received 826 complaints since it’s accreditation with the BBB. Customer satisfaction received 1.5 out of 5 stars, with many comments complaining the Carvana car buying process is a scam.

How Much Can You Borrow?

How much Carvana is willing to loan you for your purchase will depend entirely on your credit score and income.

The maximum amount they will lend is not disclosed, but they only sell cars from their inventory, so the maximum amount you can borrow will depend on their current stock at the time you’re looking to buy.

What Is the APR with Carvana Auto Loans?

Your interest rate will vary depending on your credit score. With an excellent credit score, you may find rates as low as 4.43% through Carvana.

But with bad scores, you may find rates around 17.42%.

Fees

Carvana charges a delivery fee that varies depending on your delivery location.

They also charge fees for late monthly payments. However, they don’t charge an application fee or a prepayment fee.

FAQs

How much does Carvana charge for delivery?

Carvana charges a delivery fee that varies depending on your delivery location.

Does Carvana sell new cars?

Their vehicles are all used vehicles with relatively low miles. They offer a 150-point inspection and a free CarFax report with every car they sell.

Can you negotiate with Carvana?

Carvana’s prices are non-negotiable, so no stressing about haggling prices. They seem to price their used vehicles to be similar to the values that Kelley Blue Book suggests.

Is Carvana Auto Loan the Best Choice For You?

Carvana is an excellent choice for people who have bad credit and can’t get financed through a traditional lender.

The entire experience is convenient and easy. If you find a car in the Carvana inventory that you would like and you don’t want to haggle with the dealership, Carvana would be the right choice for you.

Carvana
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