GOBankingRates

Carvana vs. CarMax: Who’s Better for Buying and Selling Used Cars?

praetorianphoto / Getty Images

Thanks to the presence of online car marketplaces, buying or selling used cars is not the hassle it used to be. Two platforms, namely CarMax and Carvana, stand out due to their ease of use and impeccable customer support.

Explore: Your Biggest Money Etiquette Questions Answered
Learn: 3 Ways Smart People Save Money When Filing Their Taxes

In this Carvana vs. CarMax comparison guide, we will discuss how these platforms compare with each other.

How Does CarMax Work?

CarMax works on a no-haggle policy, allowing people to buy and sell their cars without having to spend much time and effort. Not everyone is cut out to spend hours at a car dealership negotiating prices.

Currently, CarMax has 240 locations across the U.S. where you can find your next dream car, irrespective of the model, make or year you have in mind.

Selling

Trading or selling your car through CarMax is a three-step process. First, you get an offer from CarMax, which the company promises will only take two minutes. Then, you make an appointment. You have seven days to either receive your car’s value in cash or browse your options if you want to trade your car for a new one.

Make Your Money Work for You

Finally, go to your nearest CarMax dealership to complete the deal. CarMax can pay cash for your car on the day of your appointment, or you can trade your vehicle for a vehicle on its website.

Buying

As for shopping, you can find a car by type, price or brand. CarMax boasts a wide selection of vehicles, ensuring that every buyer has an option that meets their needs. Even better, you can also find cars in person at a CarMax location local to you.

Pros

Cons

How Does Carvana Work?

Just like CarMax, Carvana also helps you avoid the hassle of buying your next vehicle from a dealership. Carvana doesn’t have physical dealerships, so you don’t need to visit a branch to complete your purchase. Everything from the selection to the purchase of the car is done online.

Make Your Money Work for You

Selling

If you want to sell your car, Carvana will provide you with an online offer in just a few minutes. Once you have accepted the offer, someone from the company will be sent to your doorstep to inspect the vehicle.

If your car passes the inspection process, Carvana will offer cash for the car or trade-in value for a new car.

Buying

Once you have chosen a car and paid for it, Carvana delivers it to your doorstep — or, if you prefer, you can pick it up at a vehicle vending machine in your area. After your purchase, you have seven days to check the vehicle and return it if you are not satisfied.

The company has 25,000 vehicles on its website, giving buyers a wide range of options.

Pros

Cons

Make Your Money Work for You

Similarities Between Carvana and CarMax

The trading, buying and selling processes between the companies are very similar, but Carvana is an entirely online experience if you don’t use a vending machine. As for both companies’ search functions, you can narrow down your choices using the following parameters:

Also, either company may charge you a fee if they have to deliver the car to your address. In the case of selling, you can get information and offers from either website in just a few minutes.

Good To Know

Another similarity between Carvana and CarMax is that you’re likely to get a lower offer than in a private sale. The buying price likely will also be higher.

Carvana vs. CarMax: The Differences

Here are some of the biggest differences between CarMax and Carvana.

Physical Locations

The significant difference between the two platforms is that CarMax has physical locations across the country. You can go to a local CarMax close to you and look for the perfect car in person. Likewise, you can test drive cars.

Make Your Money Work for You

But having physical locations means CarMax also deals with higher overhead costs, which could translate to you paying a higher price for your car.

On the other hand, Carvana’s process is mainly online, and lower overhead costs could result in better prices.

Selling Process

Another difference between CarMax and Carvana is in their selling process. CarMax tells you to bring your car to a physical location for inspection. Once they inspect your vehicle and make sure it is up to their standards, they will purchase it from you.

Meanwhile, when you want to sell your car on Carvana, they give you an offer on the spot. After that, they send someone to inspect your vehicle. If your vehicle is up to the mark, they will give you a check right then.

Guarantees and Warranties

Both companies offer a guarantee and warranty. In addition to a seven-day money-back guarantee, every Carvana buyer receives a 100-day, 4,189-mile limited warranty. CarMax guarantees your purchase for 30 days or 1,500 miles and offers a 90-day, 4,000-mile limited warranty.

You can purchase an extended warranty from either company. These optional plans reduce or eliminate the cost of covered car maintenance and repairs, and they provide roadside assistance. CarMax’s extended warranty also covers rental reimbursements.

Make Your Money Work for You

Gap Coverage

In the event your car is stolen or is totaled in an accident, your insurance company will only pay out what it thinks the car is worth. If that amount is less than you owe on your auto loan, you’ll be stuck paying a loan on a car you no longer have. Gap coverage literally fills that gap — it pays the difference between your insurance claim amount and the balance on your auto loan. Carvana offers gap insurance as an option. CarMax does not.

That said, check with your own insurance company before you buy gap insurance from Carvana or any car dealer. There’s a good chance you’ll get a better rate than the dealer offers.

Which Is Better: Carvana or CarMax?

Carvana is a better option if you look for convenience and ease of use in your purchases and trades. On the other hand, CarMax is ideal for people who want to test drive the car beforehand and who do not mind going to their nearest CarMax location to do it.

But at the end of the day, both platforms are no-haggle and no-pressure, making it simpler, faster and less stressful for you to buy or sell your car than a dealership or private transactor ever could.

More From GOBankingRates

Daria Uhlig contributed to the reporting for this article.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.