Is Carvana Good for First Time Buyers?
Car buying is stressful enough without having to worry about whether or not you're going to get ripped off. It doesn't matter how many times you've bought cars before, every single car purchase is a new experience.
However, if you are a first time buyer, how do you make sure you are getting a good deal? What about making a mistake? Can you avoid a problematic car?
Luckily, we will review Carvana in this article and detail the Pros and the Cons for first time buyers. In fact, I'm going to share with you some simple tips that will make sure you buy a great car for less money.
Like I mentioned earlier, car buying has become a nightmare. It used to be simple - just go to the dealership, get a deal, and drive away with your new ride. Nowadays, dealerships are full of salespeople who will do anything to sell you a car. They'll even lie to you!
Let's dive in about Carvana...
Carvana: How It Works
Carvana is one of the fastest growing companies in America. They make it super simple to buy a used car without having to go to a dealer. While the vending machine sounds like fun, the advantage of Carvana is the convenience and risk-free transaction.
In fact, you don't even have to come into contact with a salesperson. Instead, you simply use the Carvana website to browse hundreds of vehicles, find what you want, and place an order. Once the car arrives at your house or office, you'll receive a call from a delivery specialist to schedule a time to pick up your new ride. And there's no additional cost to do that.
The process takes less than 20 minutes, and you could save thousands of dollars off the sticker price.
Plus, once you've bought a car from Carvana, it really changes the experience.
Car Buying Tips for First Time Buyers
I've purchased cars at dealerships, private parties and almost purchased from a public car auction. All of them had a lot of stress and pressure in different ways.
As a first time buyer, you most likely will have a budget that you want to stick to. It's an exciting time to start browsing all the different makes and models.
Carvana makes it easy to search. However, I would suggest that you take a look at a few local dealerships to see in person what a typical car might look like and also take it for a test drive.
Even though the local dealership might be out of budget, it's good to get experience in the field so when you do end up purchasing the car from Carvana, you will know if the car drives ok or not.
I've also shared my best tips in my free guide, how to buy a used car. It's full of years of experience and will help you sort out the important things to focus on.
Below-Average Prices
Carvana offers vehicles that are priced VERY competitively and adjusts to the market. This makes it one of the better options out there. But the cheapest place to get cars is via a private party but that carries a lot of risk if your car is expensive. However, at under $10,000, a private party is the way to go in my opinion.
Apples to apples comparison, their pricing was about $2,000 less than what local dealerships were advertising. Plus, there are no dealer prep fees that are added on to the bottomline.
In my experience, dealerships, especially shady ones, add dealer prep fees that can be $1,000 or more depending on the place. This is a HUGE turn-off. Meanwhile, there were no-hidden fees from Carvana.
No Haggling Tool
Overall, Carvana was transparent and you know exactly what the bottom line is. Take it or leave it, this saves tons of time and stress compared to the hoopla I've encountered at used car lots.
With Carvana, it was a no-haggle, straight forward price. In addition to the price of the vehicle, there might be a delivery fee.
In my case, this was $490 and delivery fees are NON-REFUNDABLE, so keep that in mind. If you decide you don't like the car and want to return, your delivery fee will not be refunded.
There are logistic fees and transport fees which is understandable.
Free Vehicle History Report
I always recommend reviewing the vehicle history report or Carfax before considering purchasing a car. In my free guide, I detail EXACTLY what to look for.
Carvana does screen their inventory and you typically won't find a car with a reported accident. But recently, there have been some in minor fender benders.
This is a good first step in finding a car that was not involved in an accident. Plus you will be able to see how many owners and the service records of the vehicle.
How is Carvana able to price competitively?
But how do they manage to keep vehicle prices low while still making a profit?
The answer lies in the fact that Carvana doesn't actually stock cars. Instead, they buy cars wholesale from dealerships across the US and Canada. Then, they sell those cars directly to consumers. So, rather than having to pay for expensive showrooms, advertising, etc., they just pass on the savings to customers.
Plus, they have streamlined the process of preparing their cars to save money and make money via the financing and extended warranties as well.
The cost savings are great for first time buyers.
Good Financing Options
Carvana is offering financing options to qualified customers. Depending on your credit score, your rates can be in the single digits if you have excellent credit. However, if you have bad credit or credit is less than stellar, you might see interest rates that are double digits.
Carvana Financing
The loan terms can vary. Financing terms can be as short as 12 months and up to 72 months. Obviously, you will need to determine what your budget is and what you can afford. I believe when they pre-qualify your credit it is a soft credit check and will not impact your credit score or credit history.
In addition to offering competitive prices, Carvana offers flexible terms and no hidden fees. You can even use their app to see exactly how much you can afford and compare deals across dealerships.
You can opt for third party financing outside of Carvana such as a Federal Credit Union, but that will require proof of coverage and a letter to submit in order to complete your purchase process.
For first time car buyers, I would rate Carvana financing as a great option. It keeps everything under one contract and rates are good. There are no prepayment penalties and there are no hidden fees.
No-Hassle Return Policy and 100-Day Warranty
When you buy a used car online, it’s easy to feel like you are getting ripped off. But there are actually some benefits to buying a preowned vehicle online. For one thing, you don't have to worry about driving around town looking for a specific model.
I must have wasted hours trying to look at cars at local dealerships. Most of the time, there is an extra dealer prep fee that is added on top of the asking price. This was a HUGE turnoff as I mentioned before.
Carvana's no hassle return policy was good and my Carvana advocate was there at each step to make sure I was happy with my purchase.
100 Days Warranty
Carvana also provides 100 days or 4,000+ miles for your warranty. As detailed in my other Carvana article, we got a purge valve replaced for $0 but the invoice was for $2,000+. SilverRock, the warranty company, made the process simple.
While this did not show up on the initial 150-Point Inspection, we were covered during the 100 Days.
This coverage is great for first time buyers since you never know what might come up for repairs. I also suggest looking into their Extended Warranties. The entire process has been pretty good so far and if you do not wrench on cars like I do, then it would be peace of mind for years to come.
Like I mentioned, it has been a pleasant experience up to this point. We are 5 months into our purchase.
In Network or Out of Network
You have the choice of in network and out of network repair shops. I STRONGLY suggest going out of network initially. I would select a dealership to complete the work, especially if they have experience working with SilverRock.
I have found that indie auto shops or independant shops that are out of network refused to work on the car since they had issues dealing with warranty company payouts. So it's good to ask around.
In fact, you might find a good in-network shop. I was not that lucky.
Can You Get Scammed on Carvana?
The only way you can get scammed is if you don't check the vehicle completely. This includes getting a thorough PPI or pre-purchase inspection.
Remember, these are used cars and were put on the market for sale for a reason. Sometimes you get a great deal and I believe that Carvana does a good job at standardizing their 150-point inspection.
However, these are used cars and things may break or need repair. The good thing is that you have 7 days to decide to keep the vehicle risk free.
Secondly, you have 100 Days of protection.
The ONLY way you can get scammed is if:
- Don't check your Auto Loan Rates and Loan Amounts
- Don't check and review the Vehicle History Report
- Don't get the car inspected by a trusted mechanic or dealership
- Don't return the car within the 7-Day Return Policy, if you are unsure
When Does Carvana Update Inventory?
Carvana gets new cars each and every day. Unfortunately, I have encountered that their website doesn't display all of their inventory.
For example, when I was shopping, I found the vehicle listed on CarsDirect.com but not listed on Carvana. Despite trying to locate it on the Carvana website, I was still not able to get the exact vehicle to show up.
It must be something with their Algorithm. TIP: But if you enter the VIN from the CarsDirect listing, then you will see it. If you see your car on a third party site and it is supposed to be a Carvana listing, search the VIN in Carvana's website and you should be able to find it.
Final Thoughts for First Time Buyers
In conclusion, Carvana has made buying a used vehicle easier than ever before. With their easy-to-use website and friendly customer service team, you won't have to worry about finding a dealer who knows what they're doing. Instead, you can browse through hundreds of vehicles online and choose the perfect one without having to leave your house.
Carvana offers low rates and flexible terms. So if you are unsure about Carvana for your first car, Carvana can help you save money and get behind the wheel today!
If you want a $500 off promo code, email anthony@buycarblog.com and I can send you a special code. Let me know how I can help!