This Is Why Car Dealerships Don't Like Carvana
Do you dread buying a car? You’re not alone.
According to an Edmunds automotive survey, most people find the car-buying experience more stressful than getting married or going on a first date. They would rather give up sex and smartphones than haggle over the price of a car.
Enter Carvana. This online-only used car company wants to make the process of buying a car a pleasant experience. Carvana lets you buy, sell or trade a car without leaving your home and could make car dealerships a thing of the past.
Here’s everything you need to know about Carvana.
You Can Buy Cars a New Way.
Carvana does not have any car dealerships.
Customers can shop, finance, and sell or trade cars through Carvana's website, which has over 29,000 cars that can be browsed.
The site has tools to help you narrow down your search. All you have to do is answered a few simple questions to get started and find a car.
The Prices Are Nonnegotiable.
No more haggling over the cost of a car. Once you find a car you like that fits your budget, the price you see is the price you pay.
By cutting out the middleman (dealership), Carvana cuts out about $2,000 of transaction costs to reduce car prices.
"It’s a totally different business model. They’ve built a tremendous technology platform," said Mike Maroone, a board member at Carvana and former AutoNation CEO and current head of the Maroone Auto Group, in Automotive News. "It’s nonnegotiable. … People do not go online to negotiate. It’s a transformation in technology and business processes."
In other words, Carvana is not trying to recreate the traditional car dealership experience online. Carvana has created a whole new car sales approach.
They Offer Financing If You Need It.
Carvana offers personalized financing terms with no payments for up to 90 days.
You can get you pre-qualified and see the terms in less than two minutes. They even have an auto loan calculator to see you how much you can afford.
Just make sure you read the fine print and understand how everything works.
You Control the Purchase Process.
Carvana is open 24 hours a day, so you can buy a car whenever you want. That means you can take as much time, or as little time, as you want.
Once you find the car you like, you place the order, take care of payment and schedule delivery. All of this is done online.
Carvana says it has had customers complete transactions in 10 minutes.
Your Car Can Be Delivered to You.
They will bring your car to your home or office. If it’s within one of Carvana’s local markets, delivery could be free. Their growing list of local markets covers 29 states and Washington, D.C.
Arizona (Prescott, Tolleson, Tucson)
California (Bakersfield, Fresno, Los Angeles, Modesto, Ontario, Oxnard, Sacramento, Salinas, San Diego, San Francisco, San Jose, Santa Cruz, Stockton, Vallejo, Visalia)
Colorado (Boulder, Colorado Springs, Denver, Fort Collins, Greeley)
Connecticut (Hartford, Norwich)
Florida (Jacksonville, Miami, Naples, Orlando, Tampa)
Georgia (Atlanta, Augusta, Columbus, Macon, Savannah)
Illinois (Chicago, Rockford)
Indiana (Elkhart, Fort Wayne, Indianapolis, South Bend)
Kansas (Kansas City, Topeka)
Maryland (Baltimore, Hagerstown, Salisbury)
Massachusetts (Barnstable, Boston-Danvers, Boston-Norfolk)
Michigan (Ann Arbor, Detroit, Grand Rapids, Kalamazoo, Lansing, Flint)
Missouri (St. Louis)
New Jersey (Atlantic City, Delanco, Newark, Trenton)
New Mexico (Albuquerque)
New York (Albany, Binghamton, Buffalo, New York, Rochester, Syracuse, Westchester - Westport)
Nevada (Las Vegas)
North Carolina (Asheville, Charlotte, Fayetteville, Greensboro, Hickory, Raleigh, Wilmington)
Ohio (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, Youngstown)
Oklahoma (Oklahoma City)
Pennsylvania (Allentown, Erie, Harrisburg, Lancaster, Pittsburgh, Reading, Scranton - Moosic, York-Hanover)
South Carolina (Charleston, Columbia, Florence, Greenville, Myrtle Beach - Conway, Spartanburg)
Tennessee (Chattanooga, Knoxville, Memphis, Nashville)
Texas (Austin, Beaumont, Blue Mound, College Station, Corpus Christi, Dallas, Houston, Killeen, San Antonio, Waco)
Virginia (Charlottesville, Richmond, Roanoke, Virginia Beach)
Washington D.C. (Washington D.C.)
Wisconsin (Appleton, Green Bay, Madison, Milwaukee)
Or You Can Pick It Up at One of Their Vending Machines.
That’s right. Carvana has vending machines. And they are eight stories high. If you don’t want your car to be delivered, you can pick it up at one of Carvana’s 26 vending machines.
The vending machines are located in Atlanta, Nashville, Charlotte, Houston, Austin, San Antonio, Frisco, Raleigh, Jacksonville, Tampa, Birmingham, Orlando, Gaithersburg, Tempe, Warrensville Heights, Philadelphia, Indianapolis, Bridgeville, Oak Brook, Kansas City, Ontario, Greensboro, Westminster, Oklahoma City, Memphis or Miami.
"[Customers] can select a time and day when they would like to pick up their vehicle at the car vending machine," Carvana spokeswoman Amy O'Hara told WKSU Cleveland. "Once you’ve selected that time, you come down to the vending machine. We give you a large, oversized commemorative coin, and you put it in the coin slot. It brings the vending machine to life, and it vends your car out for you."
It's that easy.
Every Car Is Certified.
Every car Carvana sells is Carvana Certified. That means Carvana cars have no reported accidents, pass a 150-point inspection and come with a limited warranty of 100-days, or 4,189 miles, whichever comes first.
Carvana came up with 4,189 miles because consumers drive 41.89 miles per day on average.
Every Carvana vehicle also has a CarFax report to show the history of its cars. The report appears on every Carvana vehicle details page.
Watch this video to learn more about how Carvana certifies its vehicles to ensure they meet safety and quality standards.
Carvana Has a 7-Day Return Policy.
And it’s a money-back guarantee. So you can get the car checked out by a trusted mechanic, friend, family member. Drive it around for a few days. If you love it, keep it.
If you are not satisfied, Carvana will take the car back. For customers within Carvana’s local delivery markets, you will get a full refund. If you are located outside of a local market, Carvana will refund everything except the delivery fee.
Carvana processes the refund the day you return the car, and the money typically is back in your account in 3-5 business days.
You Also Can Sell or Trade in Your Car.
Carvana has an online appraisal process. Complete an online form with some details about your car, and Carvana will make you an offer based on the value of your car. Again, it’s a quick process. As in a couple of minutes.
You can trade your car or sell it. Either way, Carvana will pick up your car, or you can drop it off at one of their vending machine locations.
After an on-site review of your car, you will be paid, or the money can be applied toward a down payment for a new ride.
Carvana Has an A+ Rating From the Better Business Bureau.
The company has been in business since 2013 and accredited by the Better Business Bureau (BBB) since 2015.
They have an A+ rating from BBB, but customer reviews are not used in the calculation of the review.
This Is What Customers Think.
Customers have left over 400 reviews on the Better Business Bureau site. The average rating is 1.5 stars out five stars. On Consumer Affairs, Carvana has an overall rating of two out of five stars based on 52 reviews since 2019.
Some people have nothing but good things to say about their experience with Carvana. Other people, not so much. Like anything, customer experiences vary by customer.
Keep in mind that consumer anxiety is a real thing. Psychologist Barry Schwartz wrote a book on the subject called "The Paradox of Choice: Why More Is Less," which was published in 2004 and explores how an abundance of choices can lead to dissatisfaction and regret.
So do your homework, and you will be prepared to make a smart decision.
Carvana Has Big Plans.
The company keeps growing. In 2019, Carvana hit its 100th market for as-soon-as-next-day delivery. In April 2020, Carvana’s as-soon-as-next-day delivery service became available in over 160 markets across the United States.
According to Forbes, Carvana has gone up from No. 8 to No. 4 in the annual U.S. rankings of used car businesses based on used vehicle retail sales. The company made its debut on Automotive News' list of the top 100 retailers in 2019, after selling 94,108 vehicles in 2018, more than double what it sold the year before. In 2019, Carvana sold 177,549. And it wants to sell more than 2 million cars per year.
“[Most consumers] still don't even know exactly what is meant when you say you ‘buy a car online,'" said Carvana CEO Ernie Garcia in 2019. Garcia, who cofounded Carvana in 2012 and holds a B.S. in management science and engineering from Stanford University, believes as more people get comfortable with what Carvana does, more people will change the way they buy cars.
Another Carvana cofounder, chief brand officer Ryan Keeton, a graduate of Harvard University, explained the origins of the company on the "Modern Customer Podcast" in 2019.
"The traditional way of buying a car hasn’t really changed in over 75 years," Keeton said "… [We wanted to] create a better way to do that and ... create some technology that can reduce some of that friction and create more surprise and delight and a better customer experience."
They also wanted to make it cheaper to buy used cars.
The Future of Car Sales Is Here.
There’s a reason Carvana has been called the "Amazon of autos." They are disrupting the car industry the same way Amazon disrupted traditional retail book stores and then the entire retail industry.
Carvana might be on a similar path. It has a thorough FAQ page that goes through every step of its buying and selling process, or you can call 1-800-333-4554 or email email@example.com to answer your questions.
If you want an easier car sales experience than the traditional car dealership, Carvana might be right for you.