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Carvana Used Car Financing: Review

Auto Loans, Loans

Best for: used-car shoppers who don’t want to negotiate and have identified a car they want in Carvana’s inventory

Carvana is an online used car dealer that also provides direct financing for the cars it sells. Shoppers can browse the online inventory, preview personalized financing terms and complete the purchase from their couch. Your car may be delivered to you, or in some cities you can pick it up from Carvana “vending machines” — towering glass buildings filled with cars that serve up your vehicle when you insert a special token.

The company provides direct financing exclusively for Carvana vehicles, but also accepts cash purchases or outside loans. Carvana “extends credit to customers with a broad range of credit profiles,” says Ryan Keeton, Carvana co-founder and chief brand officer. Carvana will even provide financing for subprime and deep subprime shoppers who may have trouble securing financing from traditional dealerships and lenders.

The company

  • Is an online used car dealership
  • Provides direct financing for its inventory only; does not provide refinancing or loans for cars from other sellers
  • Offers financing for a broad range of buyers, including deep subprime customers
  • Offers delivery in 48 states (fees vary) or pickup in a handful of locations

Carvana at a glance

APRsNot disclosed; see "Build my deal" section below
PricesNonnegotiable; set by Carvana
Late fees?Yes
Time to funding/purchaseOnce documents are uploaded, underwriter will call within 24 hours
Soft credit check to see financing terms?Yes

Carvana review details

To review Carvana, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online application process with sample data and compared the lender with others that seek the same customer or offer a similar product.

Carvana is good for

Carvana is suited for the shopper who doesn’t want to negotiate and is ready to buy and finance a car entirely online. You can pick a car, select financing terms and complete the necessary paperwork in one sitting. Unlike some traditional lenders and dealers, Carvana will finance its cars for buyers at the very low end of the credit spectrum. And because Carvana only performs a soft credit check, which won’t affect your credit score, before displaying personalized financing terms, it’s good for casual shoppers comparing rates.

Keep in mind, however, that Carvana’s inventory changes frequently and is limited to around 7,000 cars. Your vehicle may have to be shipped to reach you, which will take time and may require extra fees, depending on your location.

Minimum requirements

With a minimum FICO requirement of 300, Carvana essentially has no minimum threshold when it comes to your credit score. To be approved for financing, however, you must be at least 18 years old, make at least $10,000 annually and not have any current bankruptcies. The maximum loan term is 72 months, though NerdWallet generally recommends terms of no more than 36 months for used cars (60 months for new cars). Carvana does not allow co-buyers.

Carvana pricing

Carvana sells used vehicles, mostly with low mileage, that are “Carvana certified” — put through a 150-point inspection. Carvana uses its own algorithm to set car prices, which are nonnegotiable. Many customers will like this no-haggle buying method, while others may see it as a downside if they believe they could get a better price through negotiating at a conventional dealership. Even with fixed prices, always make sure you’re paying a fair market value by using online pricing guides such as Kelley Blue Book or And keep in mind that for some, the convenience of the shopping experience may be worth a higher price. Carvana also accepts trade-ins.

‘Build my deal’ tool

Carvana does not disclose its interest rate ranges, but provides a “Build my deal” tool showing sample annual percentage rates. Using the dials, shoppers can toggle the loan terms to see APR and monthly payment combinations based on income and credit score. “Customers are free to select an exact dollar payment plan based on thousands of pre-qualified permutations of APR, down payment, monthly payment and term — and Carvana makes it happen,” Keeton says.

To compare rates, NerdWallet ran the numbers on two different vehicles using loan terms of 36 months and down payments of just under 20% of the car price. Income was not included in the calculations.

2014 Honda Civic EX: $14,250 (35,870 miles)

Down payment: $2,800

Credit scoreAPRMonthly payment
Excellent (780)3.83%$371
Good (680)7.47%$392
Average (630)9.66%$405
Below average (588)13.32%$427

2015 Ford Focus SE: $11,500 (33,634 miles)

Down payment: $2,200

Credit scoreAPRMonthly payment
Excellent (780)3.84%$303
Good (680)7.47%$320
Average (630)9.67%$330
Below average (588)13.55%$348

Bad credit

Carvana doesn’t show sample rates for deep subprime credit (below 500), but, according to Experian data, the average rate for borrowers with scores of 300 to 500 is 19.62%. Carefully explore your car loan options if you have bad credit, and consider buying an inexpensive used car. To get the best deal on financing, check rates from multiple auto lenders and attempt to refinance your car loan after your credit improves in six to 12 months. Or, if your credit score will get you double-digit APRs, consider saving to buy a car entirely with cash.

Carvana financing

In minutes, you can create an account to see personalized financing options, without affecting your credit. You enter your name, date of birth, income and address. Carvana may also ask for a Social Security number; however, only a soft credit pull is required at this point. Now you’ll see the same “build my deal” tool, but programmed with your credit and income information.

Once you select and accept the financing terms with which you want to purchase the vehicle you’ve chosen, a hard credit pull is performed. Required documentation for the more detailed credit application includes proof of income, identity, insurance and residency, and your Social Security number, if you haven’t already provided it. Once you’ve uploaded your documents and completed the electronic signatures, a Carvana underwriter will call within 24 hours to finalize the sale.

Carvana prides itself on offering customers transparency and control in the financing process. When you click “Is this rate fair?” under Carvana’s displayed APR, you’ll see Experian data on average rates for those with your credit score in your state. You can also purchase a used car from Carvana with cash or financing from an outside lender.

Loan Servicing And Company ownership

Note that when you choose Carvana financing, loans are actually serviced by subprime auto lender GO Financial, an affiliate of Carvana’s original parent company, DriveTime Automotive Group, a nationwide used car retailer and finance company. DriveTime and its finance arm, DT Acceptance Corporation, make up the country’s biggest buy-here-pay-here dealer, according to the Consumer Financial Protection Bureau, which fined the company $8 million in 2014 as part of a settlement over its debt-collection practices and other issues.

Carvana was founded in 2012 as a wholly owned subsidiary of DriveTime and was spun off in 2014. A company spokesperson says Carvana differs from buy-here-pay-here and conventional dealerships in that customers have more control over the purchasing process and notes that Carvana itself does not service any loans. “Our loans are serviced by a third-party vendor, and we monitor that vendor for compliance with all consumer finance laws and regulations,” the spokesperson says. That vendor is GO Financial.


Carvana provides different ways to get customers into their new ride: delivery, for free or for a fee depending on your location, or pickup from a Carvana vending machine. Delivery times vary by location. If you fly to a pickup city, Carvana will subsidize up to $200 of your airfare, and pick you up from the airport.

Carvana also offers a seven-day “test drive.” If customers decide they don’t want their car after a week of owning it, they can return it, receive a refund for their down payment and unwind their loan before their first payment. However, check the fine print, as you may be responsible for the delivery fee to return the car.

Before you take a car loan

Thanks to the internet and competition in the marketplace, many car-buying and financing opportunities are available to you. Just because you can qualify doesn’t mean you have to take the loan if it severely stretches your budget. When choosing a car, pick one that addresses your needs. When shopping for a car loan, select the one that fits into your budget and helps you achieve your long-term financial goals. If your financial picture changes, consider refinancing your loan to better suit your new situation.

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Nicole Arata is a staff writer at NerdWallet, a personal finance website. Email: