Which offers better prices and how do they compare?
Used car prices have reached record highs with the average used car price at $26,670 in October 2020 according to iSeeCars.com data. As used car prices continue to rise, budget-minded shoppers need to do their research and shop around in order to find the best deal. And just like there are many cars to choose from, there are also many options where consumers can buy their cars.
While many consumers are familiar with the car buying experience from a traditional local dealership, there are two additional options to consider: America’s largest used car dealer CarMax and online retailer Carvana. What are the differences between the two and where can shoppers find the best used car prices? We did the important research to find out.
What is CarMax?
Chances are you’ve probably come across a CarMax dealership, but you might wonder how CarMax differs from your typical used car dealership. CarMax is the country’s largest used car retailer with over 225 physical locations across the United States. If you don’t want to visit a location and prefer to conduct the transaction online, you can buy your vehicle on the CarMax website without having to visit one of the physical stores. You can also get an online appraisal for your trade-in, but you will have to bring it to one of their physical locations for an inspection. You can browse CarMax’s full inventory of around 50,000 vehicles, and if you’re interested in a car that isn’t in your area, CarMax will bring it to you though you may have to pay a fee. All Carmax inventory must pass a rigorous 125+ point Certified Quality Inspection by one of its technicians.
When you’re shopping for a used vehicle, you can schedule a test drive at the vehicle’s CarMax location. If the vehicle you want is located at a distant location, you can pay a delivery fee to bring the car to a lot in your area. If you want to forgo the test drive, you can buy the vehicle online and have it shipped to your local CarMax location for pickup. You can even arrange for CarMax to deliver your used car directly to your home, although that option is not available in some areas.
What is Carvana?
While the pandemic forced many dealers to sell cars online, Carvana has been selling cars online since 2013. Carvana is an online-only used car retailer that allows you to purchase a car without a visit to the used car lot. This includes every step of the car buying process including trade-ins and securing financing. Carvana will deliver the vehicle right to your door, which may include a delivery fee if you are located outside of their market coverage area. You can also pick up your car at one of their vending machines throughout the country.
Carvana’s inventory includes more than 15,000 vehicles, which have each gone through a rigorous 150-point inspection process. Because Carvana doesn’t have any physical locations, prospective car buyers cannot test drive a vehicle before making a purchase. However, you can return the vehicle and get a full refund thanks to its seven-day return policy.
CarMax Vs. Carvana: Comparison
Here is a comparison of the car buying process at CarMax versus Carvana, which identifies the key similarities and differences between the two:
The main differences are that you can test drive a car when you purchase from CarMax and you have the option to view it at a physical location. Both companies have rigorous inspection policies for their vehicles and offer similar limited warranty and return programs. Additionally, you are not able to negotiate on the price of a used car at either retailers, as they have no-haggle price policies.
|CarMax vs. Carvana
||Yes, at a CarMax location or if you live within 60 miles of select CarMax stores
||90-day or 4,000 miles from time of purchase
||100 days or 4,189 miles from the time of your purchase
| Vehicle History Report
||Free Autocheck report
||Free Carfax report
||125+ point Certified Quality Inspection
||150 point inspection
||Yes, at a dealership location
||Yes, 225 locations
||No, just a vending machine in some markets to pick up purchased vehicles
||7 days (no mileage restrictions)
||7 days (if you drive over 400 miles, you will be charged $1.00 for each additional mile)
CarMax Vs. Carvana - Vehicle Selection Comparison
When examining the selection of vehicles at Carvana and CarMax, the makeup of each retailer is similar. However CarMax does have a large inventory to choose from. CarMax has about 50,000 vehicles compared to Carvana’s inventory of about 15,000.
Vehicle Age Comparison
iSeeCars analyzed the age of the vehicles at both CarMax and Carvana:
At both retailers, three-year-old cars account for the highest share of used car inventory. That’s because most vehicle lease terms are for three years, which shows that the most cars they sell are those that have come off lease. Moreover, if you want a one-year-old used car you are more likely to find it at CarMax, while you are more likely to find a car that is six-years-old or older at Carvana.
|CarMax Vs. Carvana - Inventory Age Analysis
|2019 or newer
||up to 1 year old
||2 year old
||3 year old
||4 year old
||5 year old
|2014 or older
||6+ year old
Inventory Mix by Vehicle Type
When looking at the vehicle type mix provided at CarMax and Carvana, the makeup of each main vehicle type is also similar.
The main difference is that CarMax has a higher inventory of pickup trucks, while Carvana has more passenger cars. The two also have a nearly identical breakdown of luxury to non-luxury cars.
|CarMax vs. Carvana: Inventory Mix by Vehicle Type
iSeeCars also compared the pricing of vehicles at both dealership types:
The average price of a car at CarMax is $21,114, while the average price of a used car from Carvana is $18,665. Shoppers looking for used cars under $20,000 can likely find a vehicle at either retailer. The minor price difference could likely be attributed to CarMax having slightly newer inventory. Shoppers looking for a deal will find that on average, both dealer types price their cars above market value. However, CarMax is priced higher at 4.2 percent, while Carvana is 3.9 percent.
|CarMax Vs. Carvana Pricing Comparison
||Pricing Relative to Market Value
Best Deals at Carmax
iSeeCars looked at CarMax used car inventory to see which vehicles can be found with the greatest discounts.
The vehicle with the most savings is the Mercedes Benz E-Class, which provides savings of 7.8 percent.
Best Deals at Carvana
iSeeCars also identified the vehicles that can be found with the greatest savings at Carvana.
The vehicle with the most savings is the Lexus NX 200t compact SUV, which provides savings of 5.8 percent. It’s joined by five additional luxury vehicles.
When it comes to buying a used car, both CarMax and Carvana provide alternatives to traditional dealerships. With both retailers, you can skip the hassle of the used car lot altogether, which is especially important in the COVID car buying era. However, if you want the peace of mind of test driving a vehicle, CarMax might better suit your needs. Conversely, if you don’t require a test drive and would like to complete the whole process online - including a trade-in, you should consider Carvana.
Regardless of which retailer you choose, you should always have the used car inspected by an independent mechanic during your seven-day trial period. Consumers should always do their research and use online tools like the iSeeCars VIN check report to get all the information they need to find the best car at the best price.
Be sure to check out some of our other used car shopping guides to help you decide on the perfect car for you:
If you’re interested in a new car or a used car, be sure to check out iSeeCars’ award-winning car search engine. It uses advanced algorithms to help shoppers find the best car deals across all vehicle types and provides key insights and valuable resources, like the iSeeCars VIN check report. It also includes inventory from online car retailers like Carvana and VROOM. Filter by make, model, price, and special features to find the best deal on your next vehicle.