Buying a car is a large purchase that many people don’t look forward to.
That’s why, in the last 20 years or so, people have been going online to buy a new or used car to avoid the traditional car dealership experience: the pushy salesmen, the dishonest tactics, and the lemons disguised as lemonade.
Carvana claims to help people do exactly that. But do they?
Carvana touts immediate benefits: a great format for a consumer to do a car make/model search, apply for financing through the website, buy insurance, have the administrative and tax taken care of in a vehicle purchase, and receive delivery, all without leaving your house.
My own personal experience with Carvana closely resembles the customer journey of a lot of other Carvana car buyers out there, as I found out, which both comforts me and horrifies me a little.
- With online pre-owned car dealer Carvana, you can complete the entire car-buying process—including trade-ins and financing—without ever setting foot inside a used car dealership.
- More than 15,000 vehicles from Carvana are available for purchase, and each one has undergone a stringent 150-point inspection, according to Carvana.
- While probably not the norm, Carvana’s rapid growth may have provided fresh opportunities for sloppy work practices and massive fraud within their own supply chain– the kind typically associated with used car rip-off schemes– in order to acquire and move cars off their lot.
Carvana sounds almost perfect, doesn’t it?
Car + nirvana = Carvana.
But the more you dig, and depending on whom you ask, it might seem to appear more as:
Car + Havana = Carvana.
And let’s be honest, no one really wants to go car shopping in Cuba, for obvious reasons I shouldn’t have to get into.
Carvana, (NYSE: CVNA), is an online used car company with a lot of hype, a potential for greatness, and a few serious flaws and issues. If you’re thinking about buying a car from Carvana, you’ll want to read our review before making your final decision.
Let’s check out Carvana.
Review: What’s Carvana?
Carvana’s not new.
They’ve been around since 2013. And the biggest voting shareholders, the Garcia family, have been in the used car business since at least 1991 in one way or another. Carvana is a relatively new and somewhat revolutionary idea– buying a car online and forgoing the typical dealership experience.
But the economic and societal shutdowns of 2020 only did good things for Carvana, where it experienced exponential growth based on an artificially induced economic situation. As we’ve said on this site, rapid growth can be harmful in the long run, especially if it’s not managed properly and to scale.
Carvana’s stock has dropped massively in the last year– 97% –erasing billions off CEO Ernie Garcia III’s own net worth. His dad did much better, selling billions worth of his Carvana stock in 2021. Maybe he expected things to go a little more back to normal, including the historical high prices of used cars.
Where Does Carvana Get Its Cars From?
Carvana obtains its vehicles in a number of different ways, including through auctions, trade-ins, affiliated dealerships, and private sales. While Carvana uses the CARFAX vehicle history report when giving you information on the car, it ultimately will not be held liable for any misrepresentations or fraud used to create a fraudulent vehicle history.
This is important to remember moving forward, since the used car market is what it is.
Carvana: Injecting Dignity Into the Used Car Buying Process, Maybe
Let’s not fool ourselves. Selling used cars has long been a notoriously shady business, fraught with deception and traps. Anyone who has purchased a lemon from a used car lot is well aware of this. Carvana can help you avoid being around pushy salespeople on a showroom floor, but what about the other aspects of buying a used car?
Buying or selling a car is pretty easy on Carvana. I’ll give them that. The benefit of software that takes a website visitor from car browser to car buyer and eventual driver is that once the work’s done, it’s set in stone. That makes the whole process predictable and transparent.
You do a car search, you click on the heart symbol to save the models you like, then narrow them down to one option and press the “buy” button. From there, you’ll be required to upload documents proving your identity and residence as well as insurance, though you can opt to buy Carvana’s insurance. I wouldn’t recommend it since it’s probably not cheaper through them.
After documents have been verified, Carvana lets you pick a delivery or pickup date, and then a person with a flatbed truck shows up to your location and unloads your car.
Carvana Real Life Experiences Challenge Consumer Assumptions
Most people use Carvana, assuming they’re not buying a total piece of junk that was taped together just to last long enough past the test drive and first week of ownership and eclipse the 7-day any reason. They’re hoping the 3-month, 4,000-mile warranty from Silverrock that covers issues (not related to normal wear and tear) is proof that you’re in good hands and you’ve got a quality car.
While Carvana says it provides a 150-point inspection and that all it’s certified cars have not been in any accidents or serious natural disasters, it’s difficult to believe that happens for every car.
Buying a Car from Carvana: My Own Customer Review
The ordering process was fairly straightforward. However, obtaining insurance for the Kia I wanted to buy was nearly impossible, as I discovered the reason a month or two later. There’s been an incredible number of thefts in America’s largest cities on certain car makes and models from social media challenges encouraging people to steal them, and insurance companies are refusing to cover many Kia and Hyundai models from 2011 – 2021 for not having keyless entry/anti-theft mechanisms.
After Geico saved the day and still overcharged me, I was able to proceed by uploading my insurance info to Carvana. The car delivery date was also pushed back an extra day due to some type of unrelated system error, which a Carvana help agent corrected manually.
And so, about 3 – 4 days after ordering my car, it arrived, preceded by lots of text messages from the driver and the Carvana lot staff with updates and demands for new documents, since they hadn’t corrected old ones even when I recommended that some of the information was not correct.
When I accepted delivery of my certified Carvana car purchase, the car had major issues with alignment, first of all.
The car would go left drastically unless you held the wheel turned to the right. Next, the tire pressure was too low on the tires. I would eventually see the tire low-pressure light illuminate over the coming 2 months, increasing in frequency until I was putting air in the tires ever couple of days.
What’s especially odd about that is I couldn’t twist a Tires Plus manager’s arm to pull the tire off and inspect the tire in question, which was always going low, even if it resulted in money for them, which it eventually did for a different repair shop.
Within 2 months, next the engine light came on in my car. And yes, I took it to an authorized repair facility under Bridgecrest and Blackrock’s agreement. This Tires Plus location was also hesitant to do any repairs. However, I pressed to get the full fogging procedure done to check for any bigger issues with the transmission. They found no major issues and replaced the gas cap.
In the week after the repair, the Tires Plus representative complained they still hadn’t been paid by Silverrock. Maybe they didn’t collect the deductible from me? The guy that gave me my car keys and said I was “all set” the previous week after the repairs were done might have just done that to avoid doing paperwork and didn’t know what was going on with all the details. The new normal is people not doing a thorough job, and having a visible tattoo on your neck of a pair of lips with heavy lipstick simulating a kiss, apparently.
At present, my car still runs and it’s only cost me $30 in tire repairs and a full day’s worth of hours sitting in a Tires Plus lobby waiting area. It’s hard to believe the Carvana car 150-point inspection missed all these issues, especially the alignment and low tire pressure.
Additionally, the names of other people I found on the car’s phone pairing list was one of the most diverse experiences I think I’ve ever had, making me wonder just how much maintenance and regular upkeep had been done by previous owners, if any. It also made me wonder why they didn’t keep the car.
And, I’m reasonably sure the car was repossessed at least once, as confirmed by the CarFax.
Selling Your Car to Carvana for Cash or Trade-in
You can also sell a car to Carvana, either for cash value or as a trade-in. They claim to offer the highest value, though some have complained they didn’t. The process is simple enough. You fill out a form with details of your car and they make you an instant offer (probably based on your VIN/CarFax report).
The offer is good for 7 days after you get it, and they’ll come by and pick it up with contactless pickup. If the person looks like my Carvana delivery driver, then they’re probably wearing two masks just to keep up the hysteria that some people can’t seem to let go of.
A trade-in may offer specific state tax benefits which can be immediately applied to your potential Carvana car purchase.
Carvana car value is usually close to the Kelley Blue Book price.
Carvana Financing with Silverrock Inc.
However, if you use Carvana financing, expect to pay a much higher interest rate than from a usual lender. And you can forget about re-financing that loan, as several Carvana customers have reported being denied refinancing through another lender to get a more reasonable APR for their loan, which is often recommended by credit reporting companies like Credit Karma.
You don’t have to finance with Silverrock. You can use your own bank’s loan offer, if applicable, just as you can (and should) use your own car insurance provider.
While Silverrock is the financing arm, Bridgecrest is the warranty service company associated with Carvana.
Carvana Pros and Cons
Carvana has some positive things going for it:
- All in one, thorough and convenient car buying experience – Carvana has an easy-to-use, simple and clean website that gives you great images of a wide variety of over 25,000 vehicles. Take as long as you like to look for a car, truck or SUV that suits your needs, tastes, and budget. Process the entire transaction online from documentation, financing, insurance, extended warranty purchase, and schedule the car’s delivery to your front door.
- Carvana is run by experienced pre-owned car industry people – Carvana’s founders, owners and majority shareholders have been in the used car game for the last 30 – 40 years in some capacity or another, and their previous companies have developed and many ways evolved into the entity Carvana is today.
- Overall, Carvana customers are satisfied with their purchase – When the car is delivered and it runs well, people are usually happy. And why shouldn’t they be? Buying a car can be stressful, so a quality car at a fair price without having to spend a few days at a car dealership is a great deal. With so many cars to choose from, you’re bound to find something you like.
- 7-day return policy, 100-day limited warranty up to 4189 miles – If you don’t like the vehicle, you can return it or swap it out. If there’s a repair that needs to be made within the first 7 days, Silverrock and Bridgecrest will cover it. After that, you’ll be required to pay $100 deductible at a preferred facility or $250 at a mechanic of your choice.
Carvana has a couple of key complaints that might be a deal-breaker for you:
- Title and registration issues – Many customers have said they never received their title or the DMV never received it, but they still couldn’t acquire temporary tags. Issues with titles has caused states like Illinois to suspend Carvana’s business license until they can rectify 95 complaints filed against them.
- Inaccurate listings and false vehicle histories – Some customers have reported buying a 4 x 4 truck only to receive a truck with only two-wheel drive, thus making the truck impractical for various work purposes. Other cars’ real accident and maintenance history has been altered or falsified, only to be discovered by mechanics who discover major damage. To make matters worse, some have complained they received a car with flood damage.
- Dealing with Silverrock and the warranty procedure can be painful – As someone who’s had to get 3 repairs now in about 2.5 months of ownership of my Carvana car, I can attest to the grumbles you might get, even from their authorized and preferred repair facilities, who don’t exactly look forward to dealing with Silverrock. Apparently, Silverrock has an issue with paying for repairs in a timely manner, as resentful mechanics and other customers report.
- Buying a car with a trade-in could be problematic if you decide to return your purchase – Every car comes with a 7-day no questions asked return option, but what happens if you already traded another car in? Trying to get back your trade-in vehicle back
- Stock market manipulation by retail traders could be an ominous sign – The price of Carvana’s (NYSE: CVNA) stock recently took a dramatic turn. Since the start of the year, investors who communicate through Reddit investing boards have once more joined forces to buy shares of a troubled company in the hopes of triggering a short squeeze, driving the stock price up by more than 200%, much like how they did with Gamestop stock a few years ago.
- You might just end up with a car that doesn’t work – This is a scary situation but it’s not unfounded since there are clearly customers of Carvana on the web sharing their stories and calling their state governments to complain. Imagine sitting on $15,000 in debt because one of Carvana’s questionable vehicles stops working on you. To a lesser but still terrifying degree, having $5,000 in unexpected car repairs just so you can go to work is not an empowering prospect either.
- Carvana’s add-on extended warranty and GAP coverage aren’t affordable – If you’re buying a used car out of necessity like most people, then by the time car insurance companies give you an exorbitantly high policy due to your credit score and Silverrock’s got you on the hook for a loan with 17% interest, throw in the price of a few full tanks of gas and your total monthly car-related payments are so high that an added warranty would make your total car payment look more like a house payment from 20 years ago. Therefore, most people won’t have the money for this option and likely won’t get it, thinking they’ll probably be fine once the 100-day limited warranty window closes.
For everyone out there with experiences both good and bad, a Carvana Reddit group is available to help you navigate the customer journey of being a Carvana customer.
Carvana Dealerships Near Me
Carvana dealerships, or vending machines, are located strategically around the country to provide access to customers wanting to buy a car and pick it up, as well as a hub from which to deliver cars to customers ordering at home.
Carvana dealerships and vending machines are located in 34 places around North America including:
- Ontario, Canada
- Richmond, VA
- Rhode Island
- St. Louis
The first Car vending machine was created in Nashville, TN in 2016. The tallest Carvana vending machine is located in Tempe, AZ, where the company is based.
There are other online car dealerships or platforms similar to Carvana:
- CarMax – founded in 1993, and with a typical inventory of more than 55,000 vehicles that can be viewed at carmax.com, CarMax is the largest used car retailer in the United States. Customers can arrange for home delivery within 60 miles of a store in some markets or pick up a vehicle at one of more than 220 CarMax locations. CarMax is kind of a hybrid version of Carvana, since CarMax has a large in-store staff and sales floor component.
- Vroom – Used car buyers and sellers can use the end-to-end e-commerce platform provided by Vroom, Inc. The company’s data-driven technology offers consumers a selection of used cars, at-home pick-up and delivery, and access to all stages of the car buying and selling process.
- Acceleride – The innovative online platform AcceleRide® is what several different car dealerships from Toyota to BMW utilize to have online car dealer functionality. Thus, it’s not an online dealership in itself, just a third party software provider you might encounter while searching to buy or sell a car online.
These are just some of the most popular and best ways to buy used cars online.
Conclusion: Carvana Customer Reviews
Carvana is a great idea that has been executed well for the most part, but it has some nightmarishly bad horror stories from real people. Just hope you’re not one of them if you buy a car from Carvana.
After all, I’m still here, and my car still works– for now. That’s more than I can say for some people on the BBB website who’ve filed complaints regarding their car-buying experience.
I think those voices should be heard and their problems addressed. This is another example of why companies should set aside cash reserves during the good times to pay for problems and product accountability issues faced by customers as a result of their rapid scaling and growth.
But the truth is, Carvana’s business model is based on re-selling used cars, which is inherently risky for everyone at the end of the day. Which is why I purchased the CarvanaCare subscription to extend the warranty for major car components like the drive train, engine and A/C for an extra $47/month after my initial 100 day Carvana warranty expired.
The subscription claims to offer towing and rental car assistance, though hopefully I’ll never have to find out how easy it is to obtain and without a hassle. $30/day for a rental car seems awfully low for a 10-day period, especially with supply chain issues for auto repair. But then I think I remember seeing a review online complaining about just this scenario with Carvana.
Carvana HQ Company Info
Carvana Co. Address:
1930 W Rio Salado Pkwy, Tempe, Arizona, 85281, United States
Carvana Phone: (480) 719-8809
Carvana BBB Rating
Carvana is not rated or accredited with the BBB, but gets less than 2 out of 5 stars by customers on the website.
Carvana Trustpilot Score
On Trustpilot, Carvana gets 4 out of 5 stars. However, it appears that most of the positive, 5-star reviews are from recent transactions expressing satisfaction over speed and ease of purchase, and don’t reflect the lasting value of their car which will be revealed over time.
Due to the fact that most reviewers only have one review, it makes me wonder if they were encouraged to leave reviews, if they did so on their own because they wanted to, and if they are 100% real.
Frequently Asked Questions – Carvana Review
While the majority of Carvana transactions have been positive, try telling that to people whose Carvana car purchases broke down and racked up major repair bills within the first couple of years. My own experience is mixed. On one hand, they make buying a car possible under challenging circumstances. On the other, some people have discovered major issues and structural damage that was not disclosed beforehand.
Carvana cars are a little pricier than cars sold at dealerships, but not by much just going off the sticker price. Where the costs really rack up is through their in-house financing option, Silverrock Inc., which will certainly offer you a loan even before your own bank will because the interest rate will be 15%+, easily, over the next 6 -7 years.
Carvana makes it easy to browse and buy a car online. Their dealerships are known as Carvana vending machines. They have 34 locations in North America spanning the U.S. and Canada. You can go pick up the car at the vending machine or have it delivered to your location.
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