Pros & Cons
- Offers pre-qualification with a soft credit check.
- Customer service available seven days a week.
- Allows co-signers in most states.
- Application process 100% online including document upload.
- Maximum APR possible is higher than many other lenders.
- Only finances vehicles sold through Carvana.
- Not available in Alaska or Hawaii.
- Buyers have reported problems receiving titles for purchased vehicles.
Compare to Other Lenders
How does Carvana work?
Carvana is an online-only used car retailer that also offers financing and warranties for the vehicles it sells. Online car buyers can choose a car from the Carvana website, select financing terms and complete loan paperwork — all from home.
Carvana keeps an inventory of more than 25,000 vehicles, most with low mileage. Each receives a 150-point inspection and comes with a free Carfax vehicle history report. Carvana prices are non-negotiable.
Carvana also accepts trade-ins and buys cars outright. (You may save money on sales tax with a trade-in.)
When buying a car outside Carvana's local markets, you pay shipping costs. If you're trading or selling, you must take your vehicle to one of Carvana’s service areas.
This review looks first at Carvana in recent news, Carvana financing options and then buying or selling through Carvana.
Is Carvana filing for bankruptcy?
Carvana made headlines in late 2022 for crashing stock prices, heavy debt, employee layoffs and some analysts predicting a possible bankruptcy in the company’s future. In early 2023, Carvana’s stock began to rebound slightly, but the company’s future remains unclear.
If you’re thinking of buying a car from Carvana, here are a few points to consider:
Many companies have filed bankruptcy, restructured and continued operating.
Typically, state laws do provide some protection for used car buyers, even if a dealer files bankruptcy and goes out of business.
Courts would most likely require that any existing warranties be honored.
Car buyers should still take precautions when buying from Carvana. The company has recently faced numerous complaints and lawsuits for not being able to provide titles for purchased vehicles in a timely manner, so ask for proof of title before signing to buy.
Carvana makes loans directly to consumers, unlike most car dealers that instead arrange financing through a bank or other lender. Carvana does offer third-party financing, but it says 80% of its buyers use Carvana in-house financing.
Carvana has no minimum credit score or credit history requirements and says it extends credit to customers with a broad range of credit profiles. This includes car buyers with bad credit — typically FICO scores below 630 — who may have trouble getting loans from traditional dealerships and lenders.
Carvana does require that borrowers have an annual gross income of at least $4,000 and no active bankruptcies. Carvana shoppers can pre-qualify with a soft credit inquiry, which does not affect credit scores.
Carvana recently began allowing co-signers in the majority of states to help borrowers qualify, and will soon allow co-signers in all 50 states. If Carvana doesn't currently allow co-signers in your state, you can finance with an outside lender that allows co-signers. You’ll need to provide the lender’s information to Carvana when you begin the buying process. Carvana has a list of lenders it does not work with, including Chase Bank, Wells Fargo and Ally Bank.
NerdWallet strongly recommends getting a preapproved auto loan before shopping, so you can compare the rate with Carvana’s offer. (Check out Nerdwallet's comparison of auto loans, rates and lenders.) If you finance with Carvana, consider whether refinancing your auto loan with another lender after a few payments could lower your rate.
Carvana may be a good fit for those who:
Want a streamlined process for buying and financing a car. Carvana enables car buyers to browse and select used cars, arrange financing and schedule pickup or delivery from one website.
Have good or excellent credit. While Carvana does provide financing for car buyers with bad credit, loans for these borrowers may have a much higher APR than rates available from other lenders.
Want more choices when buying a used car. Carvana provides access to a large inventory of used vehicles, along with a seven-day, money-back guarantee.
Carvana financing at a glance
Note that Carvana serves as a direct lender but also allows third-party financing. Information below pertains to Carvana financing.
Buying a car from Carvana
Carvana keeps an inventory of more than 25,000 vehicles, most with low mileage. You can verify a vehicle's condition with a free Carfax report, 360-degree photos and the results of Carvana's 150-point inspection process. All vehicles have clean titles, no reported accidents, fire, frame or flood damage.
Carvana operates in every state except Alaska and Hawaii. If you live in one of Carvana’s local markets, you may be able to pick up a car from a Carvana “vending machine.” Otherwise you will pay to have a car shipped to you.
Buyers in several states have reported persistent issues getting titles for their Carvana vehicles, leaving them unable to register and legally drive their cars. NerdWallet recommends requesting proof of title availability before signing to buy a car through Carvana.
Does Carvana sell new cars?
Carvana sells used cars, but much of its inventory is low-mileage, late-model vehicles.
Can you negotiate with Carvana?
No, Carvana says it does not negotiate on pricing.
Costs and fees
No deposit is required to hold a vehicle. A "Purchase Pending" message signals an order in process for a listed vehicle. Carvana does accept $100 deposits by credit card to hold vehicles not yet prepared for sale.
There is a nonrefundable delivery charge of up to $599 that appears automatically if you select a car that requires shipment. You can also filter for free delivery.
Guarantees and warranties
Carvana offers a seven-day money-back guarantee, with a limit of 400 miles. A returned vehicle may be exchanged for another vehicle or for a refund, minus delivery fees. NerdWallet strongly recommends you pay for a vehicle inspection during this period.
For all cars purchased through Carvana, any balance of the factory's warranty carries over. Also, Carvana offers a 100 day/4,189-mile warranty against mechanical and electrical failures on all vehicles.
Selling or trading in a car with Carvana
If you're looking to sell your car online, Carvana accepts trade-ins and buys cars outright. Trading in a car may reduce the amount of sales tax you pay.
You'll need to provide your car's 17-digit VIN or license plate number, mileage, vehicle options, and loan or lease information. You'll also need to provide your ZIP code and email address, and fill out a condition questionnaire.
Carvana operates in every state except Alaska and Hawaii. If you're trading or selling a car, you must get your vehicle to one of Carvana’s service areas.
Can you negotiate with Carvana?
No. Carvana says it makes its best offer upfront and will not match another price or negotiate. If Carvana makes an offer on your car, that offer is good for seven days.
Will Carvana buy my car if I owe on it?
If you owe more than Carvana offers, you will need to provide a cashier's check for any shortage. If you're trading the car for a Carvana vehicle, you may be able to finance the negative equity by increasing your loan amount by up to $2,500.
Does Carvana buy leased vehicles?
Yes, if the leasing company allows third-party transactions. If not, you can buy out your lease at its residual price, obtain a new title in your name, and get a new offer.
To review Carvana, NerdWallet sent a survey to Carvana requesting more than 60 data points and followed up with company representatives. The information was compared with other lenders that seek the same customer or offer a similar product.
Frequently asked questions
Founded in 2012, Carvana is an online car retailer based in Tempe, Arizona. The company is not accredited by the Better Business Bureau.
In late 2022, Carvana made headlines for falling stock prices and heavy debt that some analysts predicted could lead to bankruptcy. In early 2023, Carvana’s stock began to rebound and by early February was up 200% year-to-date (but still about 95% lower than its closing high in 2021). The company’s path forward remains uncertain, and some Carvana buyers have reported issues getting titles for their vehicles. NerdWallet recommends requesting proof of title availability before signing to buy a car through Carvana.
Carvana does not offer price matching or negotiation on any car purchases, sales or trade-ins.
Car buyers can either make a down payment or use a trade-in as down payment. The amount depends on factors such as the applicant's credit history, annual income and vehicle price.