Carvana vs. CarMax: Which Online Car-Buying Site Is Right for You?
- Carvana and CarMax both offer a no-haggle, streamlined car-buying experience.
- Carvana may be the better choice for buyers with bad credit, as it offers financing to those earning at least $10,000 per year with no active bankruptcies.
- CarMax offers a longer return window (10 days versus seven) and a 24-hour test drive on select vehicles, giving buyers more time to evaluate their purchase.
How Carvana and CarMax compare
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 a longer test drive period or want to test drive multiple vehicles |
| Financing | APR: Not specified Loan terms: Not specified | APR: Starting at 5.24% 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, which only allows for driving after the paperwork is signed) | Can take a 24-hour test drive (150-mile limit) on some cars when visiting a CarMax location |
| Return policy | Seven days or 400 miles (after 400 miles, you’ll be charged $1 per mile for each additional mile) | 10 days, and the vehicle’s condition must be consistent with when you purchased it |
| Limited warranty | 100 days or 4,189 miles for used cars | 30 days (longer in select states) |
| 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 both attract customers who are seeking a no-haggle car buying experience, whether online or at the dealership.
Carvana has 39 Carvana Car Vending Machines and additional physical locations across the country. CarMax has more than 250 retail locations nationwide.
CarMax lets you test drive select cars 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 10-day return policy if you change your mind. The vehicle must also be in the same condition as when you bought it.
Carvana customers can take a quick test drive when the car is delivered for an appointment before they fully sign off on 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 you can also use third-party 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 $10,000 per year, and have no active bankruptcies and no Carvana loan defaults in the past two-year period. If you’re in Georgia or Alabama, you must be 19 years of age or older.
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 auto loan rates.
If you shop for auto loans on the LendingTree platform, you could save an average of $2,346 by choosing the offer with the lowest APR.
By filling out a single form at LendingTree, you may receive auto loan offers from up to five lenders. Finding the most competitive financing deal is one of the best ways to keep your auto loan payment manageable.
Frequently asked questions
Carvana and CarMax are both good options for first-time buyers. Carvana is likely the better option for new buyers who don’t have high credit scores, but both offer simplified purchasing processes, no-haggle policies, and generous return windows.
Carvana has more competitive financing options for those with bad credit, and currently boasts a 99% financing approval rate. CarMax also says that they accept all types of credit and have a variety of financing sources to help offer competitive APRs to customers.
This said, make sure that you always check current rates before making a final decision. You can get prequalified from both lenders and from a third-party lender to see what loan terms (including APR and loan duration) are available to you.
Yes, you can test drive cars before you buy at Carvana or CarMax in most cases.
Carvana allows you to take “a short test spin” at your appointment or when your car is delivered, though Michigan residents must sign the paperwork first.
At CarMax, you can take a 24-hour test drive on some cars that are at your local CarMax location, but you can only test drive two cars within a 30-day window.
If you’re unsure what make and model interests you, it may be helpful to test drive different options at dealerships that don’t have restrictions. This can help you narrow down your choices, and some dealerships also have good deals on used vehicles.
CarMax has a longer return window than CarMax.
You can return a vehicle to CarMax within 10 days of purchase, though the vehicle must be in the same condition as when you purchased it.
Carvana allows you to return a vehicle within seven days, but there’s a 400-mile cap. If you drive more than 400 miles in the seven days, you can still return the vehicle, but you’ll be charged $1 per mile for every mile over 400.
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