If you are looking to buy or sell a car, then you might be thinking about using Carvana. Similar to eBay Motors and Auto Trader, Carvana is an online-only used car platform where customers can buy, sell, and trade in their cars. It is no surprise why online platforms such as Carvana are popping up.
Simply, people don’t like going to dealerships. Trying to negotiate with a car salesman who has every advantage over you is no longer the ideal option. Billions of dollars are being poured into startups like Carvana because customers want a different option ($1.1 billion globally in 2016).
If you are looking to buy or sell your car, let’s see if Carvana is the right option for you.
Benefits of Using Carvana
People like having the ability to test and try out their vehicle before they buy it, but Carvana is an online-only car platform. Because of this, they have had to take many precautions to ensure a safe and reliable service.
Here’s the basic rundown for the platform:
- They only sell cars that have never been in an accident.
- They perform a 150-point inspection on all vehicles listed.
- Customers get a 7-day trial with the option to return the vehicle, no questions asked.
To give Carvana the brownie points it deserves, it is a convenient service. If you are within a 100-mile radius of Atlanta, Austin, Cincinnati, or any other city that they service, you are eligible for free delivery. If you don’t want a delivery, you can pick up your vehicle at one of their “used car vending machines.”
Arguably, the platform represents the pure online shopping experience.
The Negative Side of Carvana
People like to try before they buy. There are many practical reasons why this is important: you can check for damage, make sure the car works properly, see the miles on the odometer, and get a feel for whether you like the car or not.
With Carvana, instead of trying first, you buy then try.
To help customers make a purchase without seeing the car first, Carvana implements a 360-degree camera system to let you look at the exterior and interior of the car online. This sounds like it solves the problem of needing to see the car yourself, but we have found numerous examples of the 360-degree camera not catching damage. We also found an example of a customer receiving a car with an odometer reading that was more than 500 miles over what was advertised.
Now let’s talk about convenience:
Depending on your location, the service can come with extra costs. If you live outside the 100-mile radius of one of their delivery locations, you will be charged a delivery fee. If you choose to return the vehicle during your 7-day trial and live out of the 100-mile radius, you will also be charged a fee unless you return the car yourself. There are also many cases where deliveries are either late or rescheduled multiple times, whether or not you’re paying for it.
This is not to say Carvana is a bad service. Far from it. But as with any innovative business model, growing pains can cause unexpected problems that may slip through the cracks.
Alternatives to Carvana
Depending on whether you value cost, convenience, or reliability, here are three alternatives you can use besides Carvana.
- Craigslist. This is a tried and true platform of the used car sales market. The website has given buyers and sellers a chance to do business without a middleman since 1995. Sellers can expect to get 12 percent more for their cars (versus dealerships), and buyers get a chance to find bargain deals. Of course, you will have to do the paperwork and check on the car’s condition yourself. If you don’t have the proper knowledge and experience, this can be a hassle.
- Auto Trader. If you are looking for a mix of convenience and reliability, then Auto Trader might be right for you. If you just want a quick sale, you can opt for the “instant cash offer.” This is basically like going to a dealership. Or, you can choose to list your vehicle to sell to Auto Trader’s audience of car shoppers at the price you determine. This comes with a price, though. You will pay between $25 and $100 to list your car on their site.
- TRED. For both buyers and sellers, we think this is the premium option. Full disclosure: this is us! But hear us out first. Like Carvana, we offer many benefits that ensure the quality of the cars on our platform. We provide a CARFAX and NMVTIS report, and offer buyers online financing, warranties and GAP insurance. On top of this, we take care of all the paperwork and implement identity and financial protocols to ensure safe transactions. Also, the service is completely free until you sell your car. This can help sellers get 30% more than what they would receive from a dealership. We eliminate all the hassle that comes with private party sales and still give buyers the ability to try before they buy.
Carvana is an innovative service that is seeking to create a 100-percent-online car buying and selling experience. But with any innovation, there are problems that will take some time to solve. At TRED, instead of completely eliminating the person-to-person interactions that come with buying and selling cars, we have made the process convenient and reliable. Here’s how:
- Your payment is protected by TRED. As a seller, you don’t have to worry about fraudulent checks or handling a lot of cash in a parking lot.
- TRED takes care of all the paperwork so neither the seller nor the buyer needs to visit the DMV.