Carvana Review: A New Way to Buy Your Next Car?

By now, you’ve certainly seen the commercials or—if you’re in one of the now 118 markets served by Carvana—one of their giant automotive “vending machines” next to a major highway. Standing nearly 100 feet tall, these vending machines look like every automotive fantasy you ever had when you were putting your Hot Wheels into their carrier. Carvana’s vending machines are the architectural manifestation of their promise to bring the public a “new way of buying a car.”

But is their new way any better? As a journalist, I wanted to know. And as someone who realized they didn’t need both a pickup truck AND a minivan, I also wanted to know.

So, I took one for the team and found out, the hard way. Which turns out to have not been so hard after all.

It all started online late one night—as most great adventures do—when the realization began to sink in that, although I liked my 2015 Ram Promaster City minivan, owning both it and a half ton pickup was a bit redundant. Then there was the Suddard Boy, all smug and gasless with his fancy electric car. Seeing Tom’s Nissan Leaf at the office daily made me miss the days when I drove a Chevy Volt and filling up meant electrons at $.10 per Kwh instead of hydrocarbons at $3.00 per gallon.

Just as I was deep in thought, a Carvana commercial came on, promising great deals, an easy transaction, and peace in our time.

“Pshhh. Bullcrap!” I exclaimed. Probably. Since I say that a lot anyway. “Anything that seems too good to be true probably is.”

Moments later, I found myself on Carvana’s easy-to-navigate website looking at Nissan Leafs.

Prices were a bit steep compared to other segments of the market. Larger used car retailers like CarMax or Autonation seemed to be a few percent below what Carvana was looking for—and private party sales were cheaper still—but the Carvana choices seemed uniformly nicer and lower mileage. Plus, the search functions were quick and intuitive. Best of all, every facet of the pricing was laid out on each car’s page, so I knew exactly what I was getting into when I was shopping.

Then I entered my trade info, which consisted of the VIN from my Promaster, and a few simple questions about its mileage, condition and options. I hit a button, and their system spit back an offer for my trade.

It was… fair. Generous, even. While they were asking high-book for the Leaf I was shopping for, they were also offering high-book for my trade, which was more than any other retailer had offered and as much or more likely than I’d be able to get on the open market, with the added bonus of not having to deal with the assembly line of idiots from Craigslist.

As it turns out, paying a premium for trades and stock acquisitions was not an isolated incident for us in the Carvana world. In hearing from associates in the auction business, they uniformly report that Carvana reps at the auctions are professional and courteous, but not at all shy about outbidding their competition on quality cars.

And that auction scene was even the genesis for the entire concept of the company. We spoke with Amy O’Hara, Carvana’s Associate Director of Communications, and she made the connection from the wholesale market to the retail concept. “Our founder, Ernie Garcia, comes from a background in auto retail. He was used to going to an auction and making transactions on cars in a matter of seconds with little hassle and wanted to find a way to bring the best parts of that streamlined experience to the consumer.”

So far, so good. At this point I was impressed with their offer on my trade, satisfied with their price on my purchase, and even delighted with their in-house financing rates, which were only about half a percentage point more than I was currently paying with my credit union. Sure, you can bring your own financing or cash, but the difference was a few bucks a month, and for that I didn’t want to further complicate what seemed like a fairly easy process by getting another party involved. Plus, at this point I was basically committed to living or dying by the full Carvana experience. For you, the reader. It should be noted that I—possibly a rarity among automotive journalists—have really good credit. I can’t speak to the rates for someone who’s run into some snags along the way, but typically in-house financiers like this are not as kind to the credit challenged.

Now, we play the waiting game.

My new Leaf—which I had confirmed through a VIN search was a one-owner, just-off-lease car from the Atlanta area—was coming from within Carvana’s ‘free delivery’ area. Delivery fees for in-stock vehicles ranged from free to about $700 to ship a car all the way across the country. Additionally, I scored a $500 off “coupon” merely by posting on a Reddit thread that I was looking to buy a Carvana car. A previous customer contacted me and shared a loyalty code that got me the discount and got her a small kickback as well. I was also within 100 miles of one of Carvana’s signature “vending machine” delivery centers, so I was eligible for free personal delivery of the new car and pickup of my trade. Outside that 100-mile radius, customers have the option of traveling to a delivery center or having the Carvana transporter meet them somewhere within the 100-mile radius.

During the time before my delivery, I contacted Carvana a few times to clear up some “surely this is too good to be true” questions. Their reps answered all my concerns thoroughly and professionally.

“When you deliver the car, how long do I get to inspect it? What if it sucks?” Customers get up to 60 minutes to evaluate their purchase upon delivery, including a 15 minute test drive. At any time, the customer can pull the plug on the transaction with no obligations whatsoever.

“What if my trade is worse than I said it was? Will the deal change?” Like the consumer, Carvana can also call the deal off on your trade if they show up and there’s a family of marmosets living in it that you failed to mention previously. While you’re evaluating your purchase, the delivery driver will also be looking over your trade to confirm it’s what you said it was. Once your trade is loaded and hauled away, though, the value is locked. There’s no getting it back to the mothership then trying to renegotiate.

“I never really got to test drive this car. I’ve had it three days and have now realized something I hate about it.” Well, that’s not really a question, but Carvana does give you a seven-day, 400 miles, no questions asked return policy. The only cost you’d be liable for is delivery outside the normal 100-mile free delivery radius if applicable. The one other catch is that if you return three cars, you’re put on hold for 90 days before you can buy another one, which seems like an entirely reasonable policy.

Still, even with all these generous safety valves in place, O’Hara told us that fewer than 10% of cars are either refused at delivery or returned inside the free-return window.

On delivery day, it all basically went according to plan. The delivery driver showed up at the appointed time, and I let him know that I’d be using every second of my allotted inspection time. I probably have better resources to inspect a car than most folks—the driver did admit this was the first time one of his deliveries has been thrown on a lift and had all four wheels removed and a WiFi dongle hooked to the OBDII port before someone even heard the stereo—but there was no pressure to make a hasty decision, and it was reinforced that I was under no obligation to take a car I wasn’t 100% satisfied with.

In the end, though, I was satisfied, and the driver was satisfied with my trade, even complimenting its cleanliness and presentation. The paperwork was signed in about 10 minutes, and a few minutes later, my new car was in my driveway while my old van was leaving it.

And so, my experience, while limited to a sample space of one, was certainly positive. Could I have found a cheaper deal on a car from a private seller? Sure. Probably. But how much effort and time would I have expended to research, shop, negotiate and acquire that deal? Would that deal have come with a no-questions-asked week long guarantee? A 100-day warranty? No and no.

Is this the better mousetrap? It was certainly not much more hassle than buying some speaker cable on Amazon, and by far the least stressful car purchase I’ve ever been involved in. In fact, much of the stress of the process was me calling or chatting Carvana reps basically asking them “Really? Is it really this easy?” With the answer mostly being “Sir, this is a Wendy’s, I think you have the wrong number.”

The other question, from an industry perspective, is whether or not this business model is sustainable. So far in their early history, Carvana appears to be in startup mode, working hard to build a culture and customer loyalty, not worrying much about profits. Some financial commentary outlets were reporting that every car they sold was costing them over $1000 in their early days. But O’Hara—and their latest shareholder reports—tell us that trend is reversing and heading rapidly toward the black. Additionally, much of their focus at the moment is on changing the culture of car buying as much as the process. O’Hara said that their hopes are to not only be delivering upwards of 2,000,000 cars a year to consumers in the foreseeable near future, but they also want to demystify and democratize the car buying process, eliminating much of the needless complexity that lies between the consumer and the product.

Ultimately, my new Leaf was probably even better than I was expecting. Their photography process is thorough, but the photos aren’t the greatest, and certainly not as flattering as I’d expect from someone trying to “sell” me a car. But I guess that says more about my expectation of how the process should be rather than how Carvana is actually doing it. The car that showed up seemed cleaner than it did in the photos, and the paint chip that was referenced in the listing was barely even noticeable in person. Honestly, if I had been selling that car, I’d have probably not have even mentioned the chip, and I’d have dramatically photographed the hell out of the thing like it was going on the next cover. But that’s me coming from a frame of reference that Carvana is specifically trying to leave in the past.

Would I buy a ‘specialty’ car this way? Not sure. If I were looking for my next track or autocross car, it would probably have a very specific set of options that I’d want to examine and confirm in person. Likewise, when questioned about the possibility of expanding into specialty or collector markets, O’Hara made it clear that Carvana wanted to focus first on the widest possible marketplace before adapting the business model for more specific niches, although she didn’t rule out that the business model could be adapted for more specialized markets.

But would I buy my next daily driver through this process? Heck yeah. Shopping for non-fun cars is a hateful process. Anything that can be done to decrease that misery is a win in my book. In the meantime, if anyone wants a loyalty code for a discount, just hit me up.

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