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  • Nicholas Hinrichsen

Vroom Vs. Carvana

Updated: Mar 2

Nowadays, there are many ways to buy and sell cars that do not require the hassle of going to a car dealership and negotiating with haggling salespeople, and navigating through mounds of paperwork. Companies like Vroom and Carvana have changed the car buying experience by allowing you to buy, sell, and finance cars conveniently from the comfort of your home (and avoid the coronavirus). This article will go through online car buying vendors, Vroom and Carvana, and compare each service.



What is Carvana?



Carvana (CVNA) is based out of Tempe, AZ, and was founded in 2012 as a subsidiary of DriveTime. The online car vendor is well known for their car vending machines where customers can locally pick up their recently purchased vehicles. Carvana acquires cars from auctions, trade-ins, partnered dealerships, autotraders, and customers who sell or trade-in their vehicles. Carvana has a partnership with CarFax, which allows customers to quickly look up the car history of any vehicle in Carvana’s inventory. They have completely changed the car buying process with their e-commerce car sales.

What is Vroom?



Based out of New York City, Vroom (VRM) is an e-commerce online used car retailer that provides a way for consumers to buy, sell, trade, and finance cars online. Vroom was founded in 2013 and became a publicly traded company on the NASDAQ in 2020. Vroom sources vehicles from auctions, private sellers, rental car companies, and dealerships. They recondition the vehicles and sell them on their website and app while providing financing services. Vroom also has physical retail locations, and cars that do not meet their retail criteria are sold in wholesale auctions.


Buying from Carvana


To buy a car from Carvana, you go onto their car buying site or app and search for vehicles by price, model, body type, and other features. From there, once you find a vehicle you want, you can place an order. Then you will decide on any other features you desired and whether or not you want the car delivered or to pick up at a local market location. If you are within one of their local markets, they will deliver to you for free, or you can use one of their massive vending machines to pick it up yourself. All vehicles on Carvana are inspected to ensure that the car has a clean title, no reported accidents, and no reported fire, flood, or frame damage. What is excellent about Carvana is you have one week or 400 miles to test drive the car before deciding if you want to return it, but if you pass the week period or 400 miles, you will face additional fees.


Unfortunately, Carvana does not negotiate on pricing, and the terms are non-negotiable. The terms are based on the car you purchase, your credit history, and income. Carvana does not have a minimum credit score requirement. As long as you make over $10,000 per year and have no active bankruptcies, you may qualify for financing through Carvana. Vehicles from Carvana come with a 100 day/4,189 mile and seven-day money-back guarantee. Carvana also offers CarvanaCare, a protection plan for vehicles that includes a $50 deductible, covers the powertrain and basic components, and roadside assistance.


Buying from Vroom


To buy a car from Vroom, go to their website or app and filter the search by make, model, year, body type, mileage, and price range. After you pick your new vehicle and Vroom approves the contract, they will send you a verification with the expected delivery date. Vroom delivers to all states in the US except for Hawaii, Alaska, and Massachusetts. Like Carvana, Vroom has a generous return policy that includes a 7-day/250-mile testing window, and they do not charge to have the car picked up, but their $600 delivery fee is non-refundable. All vehicles in Vroom’s inventory are inspected, and offer free CarMax vehicle history reports to buyers.


If you finance your vehicle through Vroom, they will register the car for you and mail you the registration and plates after being processed by your local DMV. Financing through Vroom is a relatively straightforward process. They have partnered with many banks and lenders to allow you to compare interest rates and monthly payments. Vroom does not have a minimum credit score requirement, but you must have an income of $21,600 per year to qualify for financing, which is just over double that of Carvana’s requirement.


Like Carvana, Vroom also offers several limited warranty protection products, including complimentary coverage, gap policies, tire and wheel protection, and vehicle protection plans. Vroom has mechanical protection plans for up to 10 years or 100,000 miles. This includes coverage on the engine, transmission, axle, 24/7 roadside assistance, and rental car reimbursement.


Selling with Carvana


Carvana makes selling your car fast and seamless. They claim they will have an offer price in just two minutes after providing them with some information. First, it works to go onto Carvana’s website and input all the required information on the vehicle you wish to sell. Then they will offer you a price which they claim will be fair and no lowballs. You can choose to trade in your vehicle for a new one or sell it for cash, and Carvana will come to pick it up from you.

Selling with Vroom


Vroom advertises selling your car as one the easiest tasks you will ever do. They offer “No obligation to sell,” “Quick and easy” process, and “free pickup” for sellers anywhere in the lower 48 states. Selling your car to Vroom requires three steps. First, provide Vroom with information on your car such as year, make, model, license plate, condition, and mileage. Then Vroom will make you an offer, and if you accept, they will come to your home to pick it up. For more on selling your car with Vroom, check out our article here.


To understand how Carvana and Vroom will value your vehicle, check out our vehicle valuation tool, and read the reviews we’ve gathered on each service.


Conclusion


When it comes to buying or selling a car with Carvana or Vroom, Carvana is best for car buyers who are not good at negotiating, have low credit scores, cannot afford a hard credit check, and want to avoid used car dealers. Especially during the COVID-19 pandemic, buying and selling through these vendors might be the best option compared to traditional dealerships. Vroom and Carvana offer an easy process to get a new car quickly shipped to your front door without having ever to leave your home. You might end paying higher prices than buying from a private seller or negotiating with a dealership, or if you are selling your car, you might forgo the highest price you could get selling to a private buyer on platforms such as Craigslist. That being said, if you value the convenience of buying and selling cars from your home hassle-free, then either company will likely satisfy your needs.


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