A couple of days ago I talked about the issues I had buying a used car. From hidden fees to misleading advertisements it’s a minefield. One bright spot in my recent adventures was dealing with Carvana.
Trade in value is not a hard number.
Don’t let anyone tell you that trade-in value is a hard number. Dealers can pay whatever they want for a trade. They will generally pay near market value but occasionally you get a dealer who undercuts the price by several thousand to maximize profits.
Making money is not a crime. As a matter of fact, it is the point of being in business. Not ripping off customers to make that profit is a better long-term strategy to staying in business.
We recently helped someone trade a vehicle in and found that there is another option available that wasn’t around just a few years ago. Way back in 2014 I wrote about selling a car to CarMax and how great that experience was. (Selling a Car at CarMax)
Since then I have sold another car to CarMax and the experience was just as smooth although there was more red tape and less value for the vehicle compared to the first time.
The new option is Carvana.
Carvana is supposed to be the new way to buy cars. I didn’t realize it was the new way to sell cars as well.
The trade-in was a 2018 Jeep Wrangler JL Rubicon. Low mileage, good condition, with some decent parts – lift, tires, wheels, etc. The dealer offered $35,500 for the vehicle on a trade-in. Kelly Blue Book that most consumers go to for trade-in values listed the trade-in at $38,000. Both reasonable numbers and in Maryland, you get a tax credit based on the trade-in value.
The deal for the Jeep that was being looked at wasn’t that great and it didn’t have some of the features that were really wanted. That’s when an idea struck. I had heard about Carvana buying cars and figured why not give it a try. He was down for it so the next step was to get a value.
This is possibly the easiest process in the history of selling a car. It takes only slightly more time than creating a Craigslist listing.
Punch in your Vin or plate number and the Carvana site will pull up your vehicle info. Type in some basic information such as miles, condition any additional options, and Carvana’s website gives you a price that they will pay. There is a caveat here: you need to be honest with yourself and Carvana about the vehicle condition. If you put that your vehicle is excellent but it’s missing trim, has interior stains, or is damaged Carvana isn’t going to pay you the estimated amount.
Back to our 2018 Rubicon. Carvana offered over $43,000 compared to the dealer trade-in of $35,500. The difference was a little over $8000. Now to find out if this was too good to be true.
If you decide to go forward you will need to upload some information: title, registration, odometer picture, and license. Once that is done wait for them to validate ownership and send you a scheduling email.
Getting your vehicle to Carvana.
There are two ways to get your car to Carvana. They will schedule a pick-up to your home and bring your money right to you. You can also drive to their location and drop off your car. This is generally faster but that depends on where they are located.
You also have two options for payment. A printed check or a direct deposit to the account of your choosing. For this first transaction, we went with a paper check but I think I would be comfortable doing a bank transfer after watching this process.
The process was easy, fast, and honest. Arrival was on time, the adjuster gave the paperwork to fill out, the check was already printed for the agreed-upon amount, and after a brief check of the vehicle, the transaction was done. From entry to exit, it took 20 minutes. The great part is they cut a check for the equity and paid the bank for the remainder of the loan balance leaving nothing for the owner to take care of.
There are still good reasons to trade at a dealer.
Every purchase has different needs and offers. Carvana won’t be the correct answer for every deal. In this case, the value Carvana offered was far greater than any tax benefit from a trade and allowed the owner the flexibility to shop with some cash.
My advice is to check every avenue for the best value for your trade or vehicle sale before taking the first offer from a dealer.