Carvana vs. CarMax: Which Online Car-Buying Site Is Right for You?
A no-haggle dealer can take the stress out of buying a used car. By removing negotiations from the equation, online car-buying sites such as Carvana and CarMax can offer a streamlined car-buying process from the comfort of your home.
There are many similarities between these online dealers, but there are some important differences too. Here’s how Carvana and CarMax compare when buying a car.
| Carvana | CarMax | |
|---|---|---|
| Best for buying a car online if… | You have bad credit | You want to test-drive multiple vehicles |
| Financing | APR: Starting at 6.85% Loan terms: 36 to 72 months | APR: Starting at 5.99% Loan terms: 24 to 72 months |
| Test drives | Can take a “short test spin” when car is delivered to you at an appointment (except in Michigan) | Can take a 24-hour test drive on some cars when visiting a CarMax location |
| Return policy | 7 days or 400 miles | 30 days or 1,500 miles |
| Limited warranty | 100 days or 4,189 miles | 90 days or 4,000 miles |
| Accepts trade-ins and buys cars | Yes, and offers pickup service in some locations | Yes, and offers pickup service in some locations |
Carvana vs. CarMax: buying a car
Carvana and CarMax attract customers who are seeking a no-haggle car buying experience, whether online or at the dealership.
Carvana has more than 150 physical locations nationwide (though they are not customer-facing) and more than 30 Carvana Car Vending Machines. CarMax has more than 240 retail locations nationwide.
CarMax lets you test drive a car for 24 hours before you decide to buy the vehicle — although not all cars qualify for this benefit — and customers may only take two test drives within a 30-day period. After purchasing a car, CarMax has a 30-day or 1,500-mile return policy if you change your mind.
Carvana customers can take a “short test spin” when the car is delivered to you at an appointment before you fully sign off for the purchase (except in Michigan). Their return policy is slightly shorter than CarMax’s at seven days or 400 miles.
Both Carvana and Carmax offer their own financing that you can pre-qualify for, but they also allow some outside financing if you prefer to go directly with a bank or credit union instead. Carvana states that you can still qualify for their financing even if you have bad credit — as long as you are at least 18 years old, make at least $5,100 per year, and have no active bankruptcies.
Carvana vs. CarMax: selling a car
When comparing CarMax versus Carvana for selling or trading in a car, both make it easy. Just answer a few questions and get an online offer within minutes. Their offers are good for seven days, and you are under no obligation to sell your car.
Carvana will pay you with a certified check or ACH direct deposit, while CarMax will pay you with a bank draft. Both companies will pay you the day you sell your car.
Is online car buying right for you?
Whether you’re buying or selling, the idea of haggling over used car prices can be stressful. Shoppers who prefer a less stressful car-buying experience may find online car-buying sites like Carvana and CarMax to be a good fit. Haggle-free pricing and a straightforward online experience can even make buying a car fun. Or at least, painless.
This hassle-free experience does have some disadvantages. When you can’t negotiate the price, you could end up paying more for a car than you should. Even if you’ve shopped around and found a lower price elsewhere, online car sites may not match it or negotiate.
Although no-haggle dealerships offer an easy car-buying experience, you may be leaving money on the table. In addition to shopping around for the car you want, it’s important to shop for the best financing offer. By filling out a single form at LendingTree, you may receive up to five auto loan offers. Finding the most competitive financing deal is one of the best ways to keep your auto loan payment manageable.