Buying a used car is easier today than it has ever been. Gone are the days of walking onto a car lot and haggling with a car salesman. Today you can buy a car without ever leaving home. Vroom and Carvana are online car dealers that allow you to complete the car buying process completely online, and they will even deliver the car to your doorstep. Vroom and Carvana are pretty similar in their overall business model, although there are a few distinct differences. Keep reading as we give you the details on these online car dealers and help you decide which one might be right for you.
How Does Vroom Work?
Vroom is one of the newest players in the online car dealer industry. Vroom has a large inventory of thousands of vehicles, and they are bound to have something in stock that appeals to you. Their vehicles range in price from around $10,000 to more than $100,000. Since Vroom does not maintain physical car lots, you do not get to test drive the vehicle before purchase. Once you find a car on their website that you wish to purchase, you complete the entire transaction online.
Vroom partners with several lenders to offer financing options on their vehicles to make things even easier. So, you can apply for financing during the buying process. Unlike a traditional dealership, Vroom offers fixed prices with no haggling. The price you see online is the price you pay for the car. Since they don’t maintain physical locations, you cannot test drive the vehicle before purchase. However, they do have a return policy and a limited warranty with all their cars. In addition, they offer a free CarFax vehicle history report, and all the cars have undergone a multi-point inspection to ensure that they are working correctly. In some cases, Vroom will even register your car with the state DMV and send you the license plates for the car.
If you purchase a car and decide that you are not happy with it, you have seven days to return it with no questions asked. In addition to this full money-back guarantee, Vroom also offers a limited warranty with all the vehicles they sell. The limited warranty is in effect for 90 days or 6,000 miles. If you decide to return your car, you can contact Vroom’s customer service to have them come and pick up the vehicle. Online Vroom customer reviews do show a little bit of negative feedback around their customer service process.
Finally, Vroom will also buy your vehicle even if you don’t purchase a car from them. Not only do they take a traditional trade-in, but they’ll also purchase your vehicle even if you don’t buy a new one. You need to provide them with some basic details about your car to get an online quote for your vehicle. Someone will come to your location to perform a vehicle inspection. As long as your car passes the inspection, they’ll hand over a check and pick up the car. They make both buying and selling a car easy!
How Does Carvana Work?
Much like Vroom, Carvana is an online car dealer that allows you to purchase a vehicle from your phone or computer. Carvana has a large inventory of used cars available nationwide as their inventory typically exceeds 20,000 vehicles. They have cars available in many different price ranges, so you are likely to find a vehicle that meets your needs within their inventory. Unfortunately, Carvana does not offer test drives before purchase. You simply find the car you wish to purchase on their website, upload all the required documentation, complete the purchase online, and they will deliver the vehicle to you.
During the buying process, Carvana offers in-house financing and makes it easy to apply for financing directly through their website. Their interest rates are usually a little higher than you might receive at a bank or credit union, especially if you have a good credit score. However, this does make for a seamless purchase process if you want to complete everything in one place.
If you are located in one of Carvana’s local delivery areas, then there will be no delivery fee for your vehicle. However, you might need to pay as much as $500 to have the car delivered outside this area. Even though you can’t test drive the car before purchase, Carvana does offer a 7-day money-back guarantee. If you change your mind for any reason during this time, simply contact customer service to begin the return process. They will come to pick up the car and give you a full refund on your purchase. In addition, they offer a 100-day, 4,189-mile limited warranty on all vehicles purchased. They also offer extended warranty coverage plans for an additional fee.
Not only does Carvana sell cars, but they also will buy your car even if you decide not to purchase a new car from them. All you need to do is give them some basic information about your vehicle, like the year, make, and model, and they will make you an instant cash offer to buy your car. Their offers are generally a little lower than private party values, but they are competitive when compared to cash offers from other car dealers. If you decide to accept their offer, they will come to you and inspect the car. Once the vehicle passes inspection, they will give you a check and pick up the car. Carvana takes care of all the paperwork, so they make selling your vehicle an extremely easy process. Just like buying a car from Carvana, you never have to leave home to sell your car to them either.
Vroom VS Carvana Comparison
Vroom and Carvana are very similar in the way they operate. Both businesses operate car buying sites, and unlike traditional dealerships, they don’t really maintain physical car lots. They have made the online car buying process very popular in recent years, but there are some differences between the two. Here is a comparison of these two dealers in several key areas.
— Selection Of Vehicles
Both Vroom and Carvana have a large selection of vehicles. Carvana typically has a slightly larger inventory than Vroom. In fact, Carvana often has over 20,000 vehicles from which to choose. Both companies offer a variety of body types, year models, and price ranges. You can typically find vehicles ranging from $10,000 to $100,000 at both companies. So, regardless of the type of vehicle for which you are looking, you can probably find something you like at either dealer.
— Prices & Fees
When it comes to car prices, these two dealers are very similar. Both dealers usually offer slightly lower prices than traditional car dealerships. This is generally because Vroom and Carvana operate with lower overhead expenses than traditional dealerships. When it comes to comparing the two, any difference in price usually depends on the specific vehicle. Their prices are both very competitive, and they are generally quite similar in their pricing. However, when it comes to fees, there is a little bit of difference. There is a fairly big difference in the details of delivery fees between the two, although those will be discussed more in-depth later in this article. Neither dealer charges any additional dealer fees during the purchase process, which is a nice alternative to traditional dealers who often add on extra documentation or processing fees.
— Financing Options
There is a fairly large difference in financing options between Carvana and Vroom. Carvana offers in-house financing options with competitive interest rates. They have no minimum credit score requirements, although you can expect your interest rate to be much higher if you have bad credit. Vroom, on the other hand, acts as a financing broker. They partner with lenders, like Chase and Ally Bank, to offer financing to their customers. You’ll need better credit to qualify for an auto loan through Vroom’s partners, but your interest rate is also likely to be much better.
— Delivery Fees
There is a bit of difference between the two when it comes to delivery fees. Carvana will deliver your vehicle at no charge if you are within their local delivery area. If you are outside the Carvana free delivery area, you might need to pay as much as $590 for the delivery of your car. You can also pick up your vehicle from one of their car vending machines at no charge. Vroom, on the other hand, always charges a delivery fee. The amount of the fee is based on the distance your vehicle must travel. In some cases, the delivery could cost you as much as $1,400 if the vehicle has to travel a long distance, like to Alaska or Hawaii. The only option for pickup with Vroom is at their hub in Houston, TX. However, if you are in the Houston area, you can pick up your car there at no charge.
Both dealers offer a limited warranty with the vehicles they sell, but the details vary slightly. Carvana offers a 100-day, 4,189-mile limited warranty. Vroom, on the other hand, offers a 90-day, 6,000-mile limited warranty. In addition to these included warranties, both companies offer extended vehicle protection plans for purchase. If you choose to purchase these, the price is based on the coverage details and the specific vehicle you buy. You can choose to get basic powertrain coverage or complete coverage, including roadside assistance and tire and wheel packages.
— Return Policy
The return policy of both dealers is about the same. Both Carvana and Vroom offer a 7-day return policy with no questions asked. Vroom allows only 250 miles during these seven days, while Carvana allows 400 miles. If you wish to return your vehicle, you must contact customer service. They will then send a driver to come and pick up the car. Carvana reviews reveal slightly higher customer satisfaction with the return process than Vroom. There have been a few complaints about the Vroom return process and their customer service in general.
— Trade-In Process
The trade-in process between Vroom and Carvana is quite similar. Both dealers allow you to get a trade-in offer by providing some details about your trade through their website. Once you provide the necessary information, you’ll get an online quote for your trade. If you decide to proceed with the transaction, someone will come to your location to inspect your trade-in. Assuming the trade-in passes the inspection, they will pick up your vehicle upon dropping off your new car. Both dealers try to make the entire car buying experience as hassle-free as possible. While you are not likely to get as much money on your trade as you would get through a private sale, you also do not need to worry about the hassle of being a private seller.
— Car Buying Process
Both dealers will buy your vehicle, even if you decide not to purchase a new car from them. The process with each is about the same. Simply provide some basic information about the car online, and you will get an offer within a couple of minutes. If you decide to proceed with the offer, someone will come to you and inspect the car. Upon your car passing the vehicle inspection, they’ll give you a check and pick up your car. Each company will also take care of all the paperwork, like transferring the car title or executing the bill of sale. They will also handle any additional paperwork that might be necessary.
Which Online Car Buying Process Is Best?
The best car sales process really depends on your specific needs. Both dealers have a large inventory of cars, trucks, and SUVs. They also both have vehicles in a wide range of prices, from $10,000 to over $100,000. So, whether you are looking for a basic Toyota or a high-end Porsche, you can likely find what you need at either dealer. However, there are a few things that separate the two. Carvana typically has a larger inventory than Vroom, so they can usually provide more vehicle options. If you have bad credit, then Carvana is likely the better choice for you. Carvana offers in-house financing with no minimum credit score, so you have better odds of getting approved for an auto loan. Vroom works with financing partners like Chase and Ally, who have minimum requirements for getting approved.
Both of these dealers offer a 7-day return policy, although a quick search of reviews reveals that people are typically more satisfied with the customer service offered by Carvana. There are a few complaints out there about Vroom’s customer service, and people have had some trouble attempting to return a vehicle to them. Both offer home delivery, although Carvana will provide that delivery at no charge within their local markets. You can also pick up your vehicle from a Carvana car vending machine. Vroom always charges a delivery fee, and the cost of the fee depends on the distance the vehicle must travel. So, overall, Carvana seems to have a slight edge over Vroom when comparing the two online car retailers.
How Does CarMax Compare To Vroom & Carvana?
One of the biggest differences between CarMax and Vroom or Carvana is the fact that CarMax operates and maintains physical car lots. You can visit your local CarMax location to browse the lot and test drive vehicles. Many car buyers love the option to test drive a vehicle before purchase, and CarMax provides that ability. CarMax also will allow you to buy a vehicle completely online if you choose to do so, and they will transfer any vehicle in their nationwide inventory to your local CarMax lot. However, they do not provide home delivery, so you still need to visit the lot to pick up your car. CarMax does have a better return policy than either Vroom or Carvana. CarMax offers a 30-day money-back guarantee, so you get much more peace of mind with a CarMax purchase.
CarMax was one of the first dealers in the country to advertise the fact that they would buy your car even if you did not purchase a car from them. They still make cash offers on cars today, and they began making online offers recently — especially during the COVID pandemic. If you decide to accept their offer, you will need to visit a CarMax location. They will not provide free pickup of your old car like Vroom or Carvana will. When comparing CarMax vs. Carvana or Vroom, the Carmax prices are usually slightly higher than Vroom and Carvana due to their higher overhead expenses.
The Bottom Line
Vroom and Carvana are recent disruptors to the used car market that provide an easy online car buying experience. Their no-haggle process allows you to pick out a vehicle online from their massive inventory, apply for financing, purchase the car, and have the vehicle delivered to your door. You can even trade in your old car and complete the whole process without ever leaving your house. Their prices are often a little lower than traditional dealerships, although some people do not like the fact that they cannot test drive the vehicle before purchase. Both dealers offer a 7-day money-back guarantee, so that can give you some peace of mind when buying a car from them.
Frequently Asked Questions
Is Vroom cheaper than Carvana?
Vroom and Carvana usually have very similar pricing. Whether one is cheaper than the other usually depends on the specific vehicle. You might find that Vroom is slightly cheaper on one vehicle, while Carvana may be cheaper on a different car. Vroom always charges a delivery fee, while Carvana offers free delivery within their local markets. So, with all other things being equal, Carvana might be slightly cheaper overall if you qualify for free delivery.
Can you negotiate with Carvana or Vroom?
No, Carvana and Vroom do not negotiate their prices. The price you see listed on their website is the price you will pay if you decide to purchase the vehicle. They have their cars priced as competitively as possible, and they do not haggle with buyers on pricing. If a specific car does not sell for a long period of time, then they might decide to lower the asking price. However, this is still not really negotiating. If they lower the price, you would then need to pay the current asking price to buy the car.
Which company is more reliable, Vroom Or Carvana?
Vroom and Carvana are both reputable and reliable companies. They are both certified by the Better Business Bureau, and they are both legitimate online car dealers. However, based solely on online reviews, it appears that Carvana is more reliable than Vroom. There seem to be more complaints about Vroom’s customer service. More people seem to be happy with the service they received from Carvana, so it appears that Carvana has a slight edge over Vroom in reliability.