Carvana Used Car Loans Review

Best for great inventory with in-house financing – Carvana

While it’s not quite a state of vehicular bliss, Carvana offers used car buying peace of mind with comprehensive auto inspections and solid in-house financing.

APR Range
Varies
Term
36–72 months
Loan Amount
Varies by state
SimpleScore
4 / 5.0
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SimpleScore Carvana 4
Rates 3
Loan Size N/A
Used Car Rate 4
Terms 5
Fees 4
  • Get a 7-day “test own” on all purchases
  • All financing happens in-house
  • High quality, tested and certified used car inventory
  • No ability to co-sign
  • Can’t use Carvana financing elsewhere
In The News
  • At the beginning of August 2020, Carvana opened its 25th car vending machine in the nation and the first one in Louisville, Kentucky. This was quickly followed by the 26th car vending machine in Detroit, Michigan.
  • According to Forbes, Carvana saw significant stock growth over August 2020 as customers concerned about potential pandemic problems switched to buying online.
  • Yahoo! Finance reports that Carvana’s stock growth is up 160% since its launch on the market. “The scale in the business is really showing up in that incredibly rapid leverage,” said Carvana founder and CEO Ernie Garcia.

Carvana bills itself as the The New Way to Buy a Car™ and the claim has merit — buyers can choose from more than 16,000 used vehicles that have been thoroughly tested, have these cars delivered or pick them up from vehicle vending machines and enjoy a seven-day test-own. In addition, Carvana financing all happens in-house, meaning you won’t need to complicate the process with a third-party lender.

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In this article

    Comparing used car loan providers is easy using our SimpleScore methodology. Using key data including used car rates, new car rates, loan size, customer satisfaction and fees, we can help you find the best fit for your vehicle financing. Here’s how Carvana cars stack up.

    Carvana car loans at a glance

    Minimum income$4,000 / year
    Financial requirementsNo recent bankruptcies
    Financing quote valid for45 days
    Limited warranty100 days
    Standout FeatureSeven-day test-drive available
    Best forPeople with average or bad credit who want to buy a used car
    Not forBorrowers with recent bankruptcies, borrowers with excellent credit or people looking to buy a new car

    What we like about Carvana car loans

    Seven-day “Test Own” on all purchases

    Carvana used cars come with a week-long “Test Own” period that gives new owners time to make sure their purchase best fits their needs. So long as the vehicle isn’t modified or damaged, Carvana will refund your money or exchange the car for another.

    All financing happens in-house

    Carvana handles its own financing in-house and also works with most U.S. banks to make buying your vehicle as simple as possible. After creating a Carvana account, you can get a financing quote (good for 45 days) in just a few minutes.

    High quality, thoroughly tested vehicles

    All of Carvana’s used car inventory must pass a 150-point inspection. In addition, these vehicles have clean titles and no reported accidents. New Carvana car owners also enjoy a 100-day, 4,189-mile limited warranty.

    Things to consider

    No co-sign options

    Carvana doesn’t allow cosigners, which means that if you don’t meet the minimum requirements — over 18, earning more than $4,000 per year and no recent bankruptcies — you won’t be able to secure financing with the auto lender.

    [ Read: The Best Bad Credit Car Loans for 2020

    Can’t use Carvana financing anywhere else

    While Carvana credit checks are “soft” — meaning they won’t hurt your credit score — and for Carvana, bad credit isn’t a reason to deny your application. However you can’t apply Carvana financing to any other used car buying site. If you finance with Carvana, you’re buying a car from Carvana.

    Carvana car loans vs. the competition

    LightStream

    LightStream offers similar APR and maximum loan amounts to Carvana but will also beat any competitor’s rate by 0.10%. In addition, you can save 0.50% on your rate if you choose to set up autopay.

    Fixed APR
    as low as 2.49% w/AutoPay
    Max. Loan
    $100,000
    Term
    24–84 months
    SimpleScore
    4.2 / 5.0
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    SimpleScore LightStream 4.2
    New Car Rates 4
    Loan Size 5
    Used Car Rates 4
    Customer Satisfaction 3
    Fees 5

    LightStream is a division of SunTrust Bank (now Truist), making it easy to access customer service for loan questions or financing issues if they arise. But be aware of eligibility requirements. While LightStream is a top online lender, it takes a great credit score to get the best rates. Check out our full LightStream review.

    LightStream Disclosure

    Disclaimer: Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

    Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66

    © 2020 Truist Financial Corporation. SunTrust, Truist, LightStream, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

    [ More: Best Auto Loans of 2020 ]

    OneMain Financial

    OneMain opts for old-school operations: You’ll need to go in person, and you can expect your APR to be higher than that of Carvana.

    Fixed APR
    18.00%–35.99%
    Max. Loan
    $20,000
    Term
    2–5 years
    SimpleScore
    1.5 / 5.0
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    SimpleScore OneMain Financial 1.5
    New Car Rates 1
    Loan Size 1
    Used Car Rates 1
    Customer Satisfaction N/A
    Fees 3

    The benefit? It has generous lending policies if you’ve got bad credit, and you can have someone else cosign on your car loan to boost your chances of getting approved. Don’t let the not-so-great SimpleScore fool you — if your credit isn’t what it should be but you need a used car, OneMain may be your best choice. Read our complete OneMain review.

    Bank of America

    Bank of America is all about low interest rates, especially if you’re already a customer and you get a discount if you have a Bank of America account.

    Fixed APR
    as low as 2.19%
    Max. Loan
    $100,000
    Term
    12–72 months
    SimpleScore
    4.4 / 5.0
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    SimpleScore Bank of America 4.4
    New Car Rates 5
    Loan Size 5
    Used Car Rates 5
    Customer Satisfaction 3
    Fees 4

    Terms are 12 to 75 months long, and you can secure an auto loan of up to $100,000. You can purchase your car through participating dealerships, used car lots or private sellers with a Bank of America auto loan. However, its customer reviews are average — Bank of America scored a 3 out of 5 with J.D. Power’s auto loan origination satisfaction survey. Dive into our Bank of America auto loans review.

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    How much does a Carvana car loan cost?

    After a successful Carvana credit score check, you’ll be offered financing terms that are good for 45 days. Rates vary significantly based on creditworthiness. There are also other costs to consider including local taxes, title and registration fees along with delivery fees for some areas.

    You can also choose to add CarvanaCare protection, which includes roadside assistance and covers both basic and powertrain components. Most vehicle repairs covered under CarvanaCare come with a $50 deductible.

    [ Read: Best Providers of Pre-Approved Car Loans

    Cheaper alternatives to Carvana car loans

    While Carvana reviews make it clear that the company is largely succeeding in its mission to change the car buying experience, it’s not always the cheapest option. Lenders such as CarsDirect and PenFed offer lower APRs for qualified buyers making them great options if you’ve got the credit score to qualify. Both of these companies also offer used car refinancing at similar rates.

    [ Read: Why You Should Worship Your Paid-Off Car ]

    Carvana in the news

    • At the beginning of August 2020, Carvana opened its 25th car vending machine in the nation and the first one in Louisville, Kentucky. This was quickly followed by the 26th car vending machine in Detroit, Michigan.
    • According to Forbes, Carvana saw significant stock growth over August 2020 as customers concerned about potential pandemic problems switched to buying online.
    • Yahoo! Finance reports that Carvana’s stock growth is up 160% since its launch on the market. “The scale in the business is really showing up in that incredibly rapid leverage,” said Carvana founder and CEO Ernie Garcia.

    Methodology

    SimpleScore

    We’ve created the SimpleScore™ to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore™

    We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.

    Why do some brands have different SimpleScores™ on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores™ because they offer more than one financial solution — like auto loans, home loans, personal loans and banking.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore™ to each financial solution, we’re able to give you a more accurate view of their services and how they compare to competitors’ services.

    Minimum new car rate

    Companies that look out for new car buyers with lower rates receive higher scores from us.

    Minimum used car rate

    We also give higher ratings to companies that look out for used car buyers by offering lower rates.

    Maximum loan size

    Having enough money to cover your auto loan is important –– that’s why companies with higher maximum loan amount receive better scores from us.

    Customer satisfaction

    We use the J.D. Power 2019 Consumer Lending Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)

    Fees

    Fees can add up very fast –– that’s why we give a higher score to companies who have fewer fees.

    Doug Bonderud

    Contributing Writer

    An award-winning finance, technology and security writer, Doug has a knack for distilling complex concepts down into actionable, readable copy that generates interest and drives engagement.

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.