Carvana made a huge splash with their ‘car vending machines’ in the USA in 2015.
The concept of buying a car from a vending machine may seem crazy to some but it is Carvana’s mission statement to make buying used cars a much more seamless process.
They have expanded over the years but are still not turning a profit, with hope for things to turn around as the scale of their innovative offering grows.
To help you understand more about Carvana and their vending machine service, I’ve put together a comprehensive guide to answer your questions on their service and just how they can offer used cars through vending machines.
Let’s get started!
How does a Caravana vending machine work?
Customers who have paid for a Carvana car online insert a giant coin/token at the entrance of a Carvana location to collect their car. The Carvana machine then uses robotic automated arms to move the car down to the customer, just as with a regular vending machine.
Carvana vending machines are designed to run autonomously, minimizing the need for face-to-face contact, as shown in Carvana’s video below that shows this process:
For a more informational overview of how Carvana works, check out the video below by Penn Live:
Carvana ‘showrooms’ have many levels so moving cars in this way is efficient and allows for many cars to be bought and sold in urban centers at one compact location.
Carvana Vending Machine Coin
Customers who purchase a car through Carvana will receive a large coin on arrival at one of the car vending machine sites. This coin then activates the vending machine mechanism which in turn picks up and delivers the right car to you.
The now infamous Carvana coin is a bit of a marketing gimmick but it simply functions in the same way as any other coin machine and performs a specific action based on what the user has requested.
How many Carvana vending machines are there?
There are 21 Carvana vending machines across the USA at the time of writing, with more planned in the near future.
Where are Carvana car vending machines located?
The current list of Carvana car vending machine locations is as follows:
- San Antonio
- Washington, D.C.
- Kansas City
- Westminster (Los Angeles)
- Ontario, Canada
This means that Carvana has vending machines in the following locations by state:
|California||Los Angeles (Westminster), Ontario|
|Florida||Jacksonville, Tampa, Orlando|
|North Carolina||Charlotte, Greensboro, Raleigh|
|Texas||Austin, Dallas, Houston, San Antonio|
Is Carvana a good way to buy a car?
Carvana is best for you if you want a specific used car without the hassle of talking to a salesperson and all the in-person sales pitches. If you see a particular car that you want on Carvana, you can pay for it and collect it without having to talk to anyone.
This also makes for a convenient way to buy a car during the Coronavirus global pandemic since you can also pay for Carvana to be delivered to your door.
How much does Carvana delivery cost?
It costs $599 for Carvana to deliver your car to you, paid up front and is non-refundable. Caravana cars are delivered to the buyer with the help of a third-party transport provider. This service is designed for those who live far away from Carvana locations.
Obviously, the price is relative to the vehicle you are buying and may or may not be worth the investment for you but the service is there.
Carvana delivery service is offered as ‘as-soon-as-next day’ delivery, meaning it will usually be next day delivery but this may be later due to working with a third-party to actually transport the vehicle.
Is Carvana a ripoff?
No, but it’s not super cheap, either. Carvana say that their cars are ‘competitively priced’ (of course), but there are quite a lot of negative reviews about Carvana on sites like Truspilot (where they have only 3.6 stars out of 5 on over 3k reviews) and on Reddit.
Is Carvana cheaper than a dealer?
Carvana cars do not have the same added costs that you can expect from a car dealer, so they are often cheaper overall, although their up-front prices do not look much different when compared to a traditional car dealer. Compare with a specific dealer to be sure.
The best option is always to get a detailed quote from two services, regardless of whether it be for Carvana or another used car dealer but it really depends on what is available to you locally to make the price comparison.
Does Carvana have hidden fees?
No, Carvana does not have hidden fees which makes it a more attractive offering for some used car buyers. Car dealerships often have add-ons which increase the price significantly, whereas Carvana offers a more transparent pricing structure, giving you peace of mind.
Why are Carvana cars so cheap?
Carvana keep their prices down by offering used cars with minimal manual labor in their business model and having high-rise automated showrooms to keep property costs and expenses low. This in turn allows them to have staff working remotely in sites which cost less.
Their famous ‘car vending machines’ make for an almost entirely automated car-buying process, meaning they don’t have to pay an hourly wage to a salesperson on site. Their
How much does a Carvana vending machine cost?
Estimated at $5 million for the machinery, installation and launch costs, as per estimates by established UK finance blog The Motley Fool. Exact costs are not easy to find online, however, so take this with a grain of salt.
Although there are other car vending machines out there, like Singapore’s luxury car vending machine and Alibaba’s car vending machine in China with Ford, there is not currently a car vending machine product on the market with a specific price, hence the costs are only estimates wherever you look.
Do Carvana cars come with gas?
Yes, Carvana cars often come with a full tank of gas but they also include a gas voucher if your chosen car is much below its full gas capacity. These small touches add to the unique Carvana car-buying experience.
Can you test drive Carvana?
Yes, for 7 days and without any limits on distance or conditions. This gives the buyer the opportunity to buy a car that they have got to know very well and can simply return it before the 7-day test drive period is up for a full refund.
Previous Carvana customers have said that it is straightforward to return Carvana cars, although some have their doubts about the quality of the inspection, which can lead to certain Carvana cars being sold with more miles than advertised and not fully cleaned, so be aware of that aspect.
Do I have to finance through Carvana?
No, you can pay in cash up front if you like, or take credit or finance options if you need. It’s also worth noting here that Carvana offers finance to customers with bad credit, so they have a range of payment options available to customers.
How does Carvana earn money?
By selling cars at a profit and by reducing costs through an online model plus the vending machine approach to save on face-to-face selling. However, Carvana is still unprofitable at the time of writing but aims to turn profit by scaling up its locations.
This may still be several years yet but Carvana has seen interest and sales increase with the COVID-19 pandemic as the limited face-to-face interaction makes it a more appealing option for safety-conscious user car buyers.
The vending machine car sales model also allowed Carvana car sales to continue through the toughest phases of the pandemic, even when other car dealerships had had to close given labor restrictions imposed.
For a more detailed breakdown, you can see Product Mint’s very insightful full article on the Carvana business model here: The Carvana Business Model – How Does Carvana Make Money.