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Carvana: 2024 auto loan review

2024-01-01 14:00:00

At a glance

4.2
Rating: 4.2 stars out of 5

Bankrate Score

  • Availability
    Rating: 3.6 stars out of 5
  • Affordability
    Rating: 3.8 stars out of 5
  • Customer Experience
    Rating: 5 stars out of 5
  • Transparency
    Rating: 4.5 stars out of 5
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About Carvana

  • Moneybag

    Loan amount

    Not specified

  • Credit Good

    Min. credit score

    No minimum

  • Rates

    APR from

    Not specified

  • Funds available in

    As soon as one day

Carvana auto loans are best for shopping from home

Carvana lets you skip the car lot and hours of paperwork at the dealership. Instead, you can take advantage of a seamless shopping and application process from your couch. Carvana may also be a good fit for people who lack good credit or a strong income but need an auto loan.

Carvana pros and cons

No minimum credit score and a money-back guarantee make Carvana an enticing option, but its drawbacks should also be considered.

Green circle with a checkmark inside

Pros

  • Good credit not required
  • Money-back guarantee
  • One-stop-shop
Red circle with an X inside

Cons

  • Limited to Carvana inventory
  • Down payment required
  • APR ranges not disclosed

Carvana offers auto loans for all types of borrowers. It’s available to people looking to purchase a vehicle through Carvana — which delivers cars to your doorstep or using a “car vending machine” in select areas. You don’t need perfect credit to qualify for financing, and you can view potential loan offers without affecting your credit score.

Do you qualify? 

You must live in the contiguous U.S. to shop through Carvana — it doesn’t operate in Alaska or Hawaii. Carvana only lists the following qualification requirements:

  • Be at least 18 years old.
  • Have six months of credit history.
  • Have no active bankruptcies.
  • Make a minimum of $4,000 a year.

You’ll need to provide documentation — like a recent utility bill, loan statement or lease agreement — for address verification purposes. Carvana will also verify your income through your two most recent consecutive pay stubs, three most recent bank statements or Plaid.

Carvana versus CarsDirect

While CarsDirect, an online car shopping platform and online broker, won’t deliver your car to your doorstep, it’s a comparable option. The platform has an extensive lender network, which makes it a solid choice for those with bad and fair credit. However, Carvana is more seamless for those who prefer a fully online experience. 

Carvana versus CarMax 

CarMax offers a convenient online shopping and financing experience similar to Carvana's. Both feature options for consumers with varying credit backgrounds, and you can get prequalified with no impact to your credit score. The two offer similar limited warranties — CarMax’s lasts 90 days, while Carvana’s stretches to 100 days. 

But there are some key differences to be aware of. CarMax offers brick-and-mortar locations if you prefer an in-person shopping experience. Plus, CarMax’s 30 day/1,500 miles money-back guarantee is much longer than the seven days/400 miles Carvana provides. If you want more time to fall in or out of love with your car, Carmax might be a better choice.

What we like and what we don’t like

Carvana simplifies the car-buying process, but there are limitations to consider. 

Pros

  • Good credit not required: You could be eligible for financing if you earn at least $4,500 annually and do not have any active bankruptcies — even if your credit score is low.
  • Money-back guarantee: You’ll have seven days to return the vehicle and walk away from the loan agreement without facing negative consequences — aside from the temporary dip in your credit score from the hard credit check.
  • One-stop shop: Carvana simplifies the process from start to finish by letting you shop for a ride, arrange financing and have your car delivered, all in one place.

Cons

  • Limited to Carvana inventory: Carvana auto loans can only be used for vehicles available for sale on Carvana’s website.
  • Down payment: You may have to make a nonnegotiable down payment to purchase a new vehicle.
  • APR ranges not disclosed: Prospective borrowers must get prequalified to view interest rates and terms. You can do that without hurting your credit score, but it’s still an added step.

How to contact Carvana

Carvana provides extensive customer support that goes beyond normal business hours to make your purchase as painless as possible. Support is available online and by phone from 7 a.m. to 1 a.m. ET. You can also text with a live advocate from 9 a.m. to 10 p.m. ET, seven days a week.

Auto loan types offered 

You can use a bank or credit union to finance your used car purchase — or streamline the process with financing from Carvana.

Used car loans 

  • Amounts: Not specified
  • Terms: 12-72 months
  • APR: Not specified

Carvana features auto loan financing for used vehicles purchased on its platform. While Carvana doesn’t list a funding amount range on its website, its chatbot stated Carvana’s loans can be used to finance any vehicle for sale on the site at any price.

Its loans are available to borrowers with all credit types as long as you make at least $4,000 per year, have six or more months of credit history and don't have active bankruptcies. Even better, the loan terms are flexible, and you could get approved for financing and finalize your loan the same day.

How to apply for a loan with Carvana

You can get prequalified for an auto loan with Carvana on its website. It only takes two minutes of your time and won’t affect your credit score. If there’s a match, you will be able to view actual loan terms and monthly payments for the vehicles available for sale on the platform.

To prequalify you will need to enter your:

  • Name and contact details.
  • Residential address.
  • Birthdate.
  • Employment details.
  • Annual income.

If you plan to apply with the help of a co-signer, simply input their information on the first application page. Your co-signer must also be present for vehicle pick up or delivery. 

Features and perks

Some borrowers who enroll in autopay are eligible for a discounted interest rate. Another key benefit is the accessibility of the customer support team — you don’t have to pick up the phone to get the assistance you need since it’s also available by chat or text.

Additionally, like many car-selling websites, Carvana has a return policy. You can return the car within seven days after driving it up to 400 miles and get your money back, minus shipping charges. It also offers a free limited warranty for the first 100 days or 4,189 miles, whichever comes first. 

Fees and penalties

Shipping and delivery fees apply when you choose to purchase and finance with Carvana. However, you can avoid the latter by choosing to have the vehicle delivered to a Carvana location or vending machine where you can pick it up. Some cars also include free shipping, which is disclosed in the listing. 

You’ll also face fees for late payments or having insufficient funds in your account.

Carvana frequently asked questions 

How Bankrate rates Carvana

Overall score 4.2
Availability 3.6 Carvana requires you to use its marketplace if you want to use its financing option. It also doesn’t offer more than used car loans.
Affordability 3.8 Carvana doesn’t share its interest rate range and it charges standard NSF and late fees. But its acceptance criteria is more flexible than other lenders.
Customer experience 5 Carvana offers support seven days a week. It also has a large shopping window — 45 days — and full online access.
Transparency 4.5 Carvana allows prequalification and clearly lists almost all of its rates and fees.

Methodology

The Bankrate team assessed more than 35 auto lenders to find the best. Bankrate considered 18 criteria, such as acceptance criteria, loan amounts and APR range. These scores are broken into four categories.

  • Availability: Loan amounts, repayment options, dealership requirements and state availability all contribute to this category. Lenders that serve customers nationwide with flexible loan amounts rank higher.
  • Affordability: This section houses APR ranges, acceptance criteria, fees and discounts. Lenders with the lowest rates, fewer fees and most generous acceptance criteria receive higher scores.
  • Customer experience: Our team looked at how easy it is for customers to apply for and manage their loans. Criteria include how long you have to shop, customer service hours, whether there’s an app and autopay availability.
  • Transparency: This includes prequalification and disclosure of rates and fees. We favored lenders that make it easy for customers to preview possible costs.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.

Written by
Allison Martin
Contributor, Personal Finance

Allison Martin is a contributor to Bankrate covering personal finance, including mortgages, auto loans and small business loans. Martin’s work began over 10 years ago as a digital content strategist, and she’s since been published in several leading outlets, including The Wall Street Journal, MSN Money, MoneyTalksNews, Investopedia, Experian and Credit.com. Martin, a Certified Financial Education Instructor (CFE), also shares her passion for financial literacy and entrepreneurship with others through interactive workshops and programs.

Edited by Editor, Auto Loans