Vroom Used-Car Loans: 2021 Review

To review Vroom, NerdWallet collected more than 15 data points from the lender, and compared the lender with others that seek the same customer or offer a similar product.

Car shoppers can browse Vroom’s inventory of thousands of used vehicles online, apply for a loan quote and eventually order a car to be delivered. Vroom provides free CarFax vehicle history reports and only sells cars with a clear title and that haven’t been in an accident. All prices are no-haggle, set by Vroom based on current market data.

Vroom works with more than a dozen lenders to find you the best interest rate when you apply for financing. Car shoppers can apply online or on a mobile device and get pre-qualified financing offers with a soft credit inquiry, which doesn’t lower your credit score. Buyers can also use their own financing or pay cash.

» MORE: Best auto loans for good, fair and bad credit

Vroom auto loan rates

Vroom didn’t share its financing rates for this review. While the company says it can finance loans for borrowers with bad credit (300 to 629 FICO), you should carefully explore your car loan options if you have bad credit.

If your credit score will get you double-digit APRs, consider saving to buy a relatively inexpensive used car entirely with cash. If you decide to finance, check rates from multiple auto lenders to get the best deal and attempt to refinance your car loan after your credit improves in six to 12 months.

Loan example: For a subprime borrower (501 to 600 FICO score), a $10,000 car purchase with a $2,000 down payment, 12% interest rate and 36-month repayment term would carry monthly payments of $266, according to NerdWallet’s auto loan calculator.

How Vroom compares

Online used-car buying, where the car is delivered and a return policy is included, is relatively new and is currently only provided by a handful of companies. Besides Vroom, the other notable companies are Carvana and Shift, though Shift is available only in parts of California.

Unlike Carvana, which is a direct lender, Vroom works with multiple lenders to arrange financing. While both companies perform a soft credit pull for prequalified offers and have no minimum credit score requirements, Vroom has a higher minimum income requirement.

Delivery charges differ for Vroom and Carvana, but both companies show competitive estimated financing rates and sell cars at prices that are below or close to the current market value as set by major pricing guides such as Edmunds.com and Kelley Blue Book.

When buying from either company, make sure you factor in all costs and check certified pre-owned car pricing. If the online dealer prices are the same or higher than market value, consider how much the convenience of avoiding the dealership is worth.

Applying for Vroom financing

• No hard credit inquiry required for pre-qualification.

• Decision for pre-qualification within minutes; more information and hard pull required for final approval.

• Application, prepayment and late fees vary with final lender.

• Vroom allows co-applicants.

Vroom restrictions

• Minimum income: $1,800 per month.

• Maximum loan term: 75 months (NerdWallet generally doesn’t recommend loans longer than 36 months for used cars and 60 months for new cars).

• Financing available for Vroom vehicles only. Financing not available in Pennsylvania.

• Vehicles 8 years old and newer, with less than 100,000 miles

• Applicants must make a $500 deposit to hold the car.

• Delivery fee of $599.

More from Vroom

Delivery: Vroom delivers its vehicles (to the lower 48 states only), which can be included in the financing. Customers are told the delivery time is within 10 to 14 days after it receives a signed contract and funds. To avoid the delivery fee, customers can pick up the vehicle from a Vroom dealership near Houston.

Return policy: Vehicles sold by Vroom can be returned within seven days (or 250 miles, whichever comes first). If the car was shipped, it will be picked up for free but the delivery fee will not be refunded. If you picked up your vehicle, you must return it to Vroom at the same location — and there may be a $599 restocking fee, depending on the reason you’re returning it.

Trade-ins: After you answer some basic questions about your trade-in, Vroom will give you an offer, which is good for two days or 250 miles. Once Vroom picks up the car, you will get paid (trade-ins are picked up only in the lower 48 states). You can also sell your car to the company even if you don’t buy one from Vroom.