Clark Howard

Carvana vs. CarMax: Which Is Better?

You may know that CarMax and Carvana both promise to make buying or selling a used car an easy and stress-free process: They both promote "no-haggle" policies and both say you can complete most of the process online. But is one better than the other?

I shopped for a used car with both Carvana and CarMax. I also went through the process of selling a vehicle with both dealers to get a sense of their strengths and weaknesses. I'll go into more detail on my findings later in this article.

Is Carvana or CarMax Better for Your Used Car Needs?

In this article, we’ll look at how CarMax and Carvana work, talk about their similarities and differences and see if there’s a clear choice when it comes to buying or selling a used car.

Table of Contents:

How Does CarMax Work?

Founded in 1993, CarMax is a car dealer that has a “no-haggle” policy for buying and selling used vehicles. That policy is intended to simplify the process for people who don’t want to spend hours at a dealership dickering over prices.

There are more than 200 physical CarMax locations across the U.S., but you can complete most of the process of buying or selling a car with CarMax online.

CarMax has around 50,000 used cars to choose from at any given time. So the chances of finding one that you want to buy are pretty good. CarMax also gives you a full week to drive the car to make sure you like it. If you don't, you can return it for a full refund.

CarMax will also buy your car if it meets the company’s specifications. You can drive your vehicle to any CarMax location to have it inspected and get an instant offer. That offer is good for seven days from the time it’s made. If you do sell your car to CarMax, you’re not under any obligation to buy a car from them in return.

READ MORE: CarMax Review: 5 Things to Know Before You Buy or Sell

How Does Carvana Work?

Carvana also promises low prices on well-maintained used vehicles by cutting dealerships out of the car-buying process altogether. Since Carvana operates almost entirely online, the company doesn’t have the overhead of a traditional dealership or even of CarMax.

You can buy or sell a used vehicle with Carvana on your computer or smartphone — no haggling involved. If you're buying, Carvana will deliver your vehicle to your front door. You also have the option to pick up your vehicle at one of Carvana's Vehicle Vending Machines located throughout the country.

Although you can’t test drive a Carvana vehicle before you purchase it, you do have seven days after the sale to return it with no questions asked.

If you have your eye on a specific make and model, find one at your local traditional dealership or CarMax and take it for a spin to make sure you like it. While you’re there, you can also get a quote for comparison-shopping purposes.

Carvana said it had more than 15,000 vehicles to choose from as of 2019. Each one of those vehicles has undergone Carvana's "150-point inspection."

If you’re looking to sell, Carvana will give you a “real, firm” offer online in as little as two minutes. If Carvana does make an offer and you accept, someone will come to your home or office to inspect your vehicle. If it passes, you’ll get a check on the spot.

READ MORE: Carvana Review: 5 Things to Know Before You Buy or Sell

What Are the Similarities Between CarMax and Carvana?

The process of buying or selling a car with CarMax and Carvana is remarkably similar. Carvana has disrupted the used car industry since it launched in 2012, and it is apparent that CarMax has learned from its upstart competitor.

Both sites make it easy to search their inventories by offering a number of parameters to help you narrow down your choices. These include:

  • Price
  • Body Type
  • Year
  • Mileage
  • Features
  • Fuel Efficiency
  • Color
  • Cylinders
  • Transmission

Both CarMax and Carvana will also deliver a vehicle to your door in most cases. However, there may be extra fees involved if you select a car that’s located some distance away from you.

When it comes to selling your vehicle, both companies have information on their websites that lets you see if your car is one they'd consider buying. How the actual sale transpires is quite different between the two companies, and we'll get to that in the next section.

What Are the Differences Between CarMax and Carvana?

The biggest difference between CarMax and Carvana is that CarMax has physical lots spread out across the country. That means that you can shop local inventory in person and even test drive cars.

On the flip side, it also means CarMax has more overhead than Carvana, which could translate into higher prices.

The process for selling a car is also different. If Carvana wants your vehicle, they will make you an offer online then come to you to inspect the vehicle. If your car passes, they will cut you a check.

If CarMax is interested in purchasing from you, they will ask you to bring your car into the closest store for inspection. If your vehicle is up to their standards, they will buy it from you there.

CarMax vs. Carvana: Is One Better Than the Other?

In trying to determine whether CarMax or Carvana is the better place to buy or sell a used car, it’s helpful to look at the pluses and minuses of each. In most cases, those are pretty much identical. However, as we’ve mentioned, there are some slight variations.

CarMax Pros CarMax Cons
Easy-to-use interface for shopping used car inventory Potentially higher prices than private purchase because of middle man factor and overhead
No-haggle, no-pressure environment May have to pay extra to have a car shipped to your location
Offers a wide variety of makes, models and model years When selling, offer may be less than you can get in a private sale
Seven-day return policy + 90-day or 4,000-mile limited warranty on purchases Must visit store to sell car
In-house financing available
Carvana Pros Carvana Cons
Easy-to-use interface for shopping used car inventory Prices may be slightly higher than a private sale
No overhead that comes with owning physical car lots No opportunity to test drive before purchase
No-haggle, no-pressure environment When selling, offer may be less than you can get in a private sale
Everything can be done online
Seven-day return policy + 100-day or 4,189-mile limited warranty on purchases

In my experience, shopping for a car was remarkably easy on both the CarMax and Carvana websites. I ended up purchasing from CarMax because the price was around $500 less for the same model as Carvana’s. CarMax delivered the vehicle to me. I completed the paperwork in my driveway in less than 20 minutes.

If I were selling a vehicle, however, and the offers from CarMax and Carvana were similar, I might opt to sell to Carvana. Why? The process can be done almost entirely online, and Carvana will come to me to pick up the car.

Ultimately, with their no-haggle, no-pressure philosophies, both CarMax and Carvana are must-visits if you’re looking to buy or sell a car. The process with both is relatively painless, and you have nothing to lose by shopping around for the best deal.

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