(iSeeCars) – If you’ve come across a Carvana listing during your car search or passed a Carvana vending machine along the highway, you might be wondering what the used car retailer is and how it works. Carvana presents itself as a new way to buy a car. But is it better than the old way? We did the important research to help you decide.

What is Carvana?

Although online car buying might not have been buzzed about until recently, Carvana has been selling cars online since 2013. Carvana is an online-only used car retailer that allows you to virtually complete every step of the car buying process including trade-ins and financing without setting foot in a used car dealership. Carvana only sells used cars, which are generally from the last 10 model years. However, the vast majority of vehicles on the site are five-years-old or newer. Carvana’s inventory includes more than 15,000 vehicles, which have each gone through a thorough 150-point inspection process.

While buying a car online might seem unsettling, it has become an attractive purchase option and has gained popularity in the wake of the COVID-19 pandemic. But given the amount of time you spend in the car dealership during the car buying process and all the paperwork that goes along with it, you might also be wondering how buying a car online is even possible. 

Here’s what happens if you decide to skip the dealership and buy a car through Carvana:

Step 1: Find Your Vehicle

Carvana vehicles are listed on many used car search engines like iSeeCars.com and Autotrader so you might come across a Carvana listing among inventory from traditional dealerships while looking for a used vehicle. Or, if you know you want to purchase a car online through Carvana, you can use the search engine on Carvana’s website that includes its inventory of over 15,000 vehicles. You can search by make, model, body type, year and mileage, and by features. We found the price search especially helpful. You can search by your price range, or you can enter how much money you’re putting down and your desired loan term, and it will estimate your monthly payments. 

It will also ask if you are trading in a car. If you do have a trade-in, you can enter your vehicle’s VIN or license plate and answer a few quick questions to get an instant offer. You can then better estimate how much you will put toward your down payment. (Check out our article about Selling a Car to Carvana that details the process).

Each listing on Carvana.com includes 360-degree photos and clearly states any imperfections such as dents or dings that the vehicle might have. Every listing also links to a free CARFAX history report that provides helpful information like accident history, maintenance records, odometer readings, and if it was used for personal or commercial purposes. 

Carvana only sells one-owner vehicles that have never been in a reported accident, so the CARFAX report should verify that information. Each Carvana vehicle is subject to a 150-point inspection, and the results are posted with each listing. Lastly, each vehicle is backed by a 100-day, 4,189-mile limited warranty.

If you were purchasing a vehicle through a traditional dealership, now would likely be the time that you’d test drive it to see if it matches your needs. When you buy a car with Carvana, you forego a traditional test drive. Instead, you test drive the vehicle when it’s delivered (we’ll get to that later). If this scares you from proceeding, know that each Carvana vehicle comes with a seven-day money-back guarantee. Think of this return policy as an extended test-drive in your day-to-day environment. 

Step 2: Trade-Ins and Financing

So you’ve found the car you’re looking for and are ready to make a purchase. That was easy! Now it’s time to get the ball rolling. Click the “Get Started” button, where you will be asked to create an account if you don’t have one already.

After you enter your personal details, it will ask you if you have a trade-in. If “yes,” then press the “get offer” button, if “no,” then select “I don’t have a trade-in.” If you created an account and already have an offer on your vehicle, then your offer will load. Your offer will be good for one week. After you have your offer, you’ll apply your trade-in to your purchase and complete the process with the purchase of your vehicle. Before you accept any trade-in offer, make sure you do your research to determine how much your car is worth

The next step is to select one of three financing options. You can select “finance through Carvana,” “pay with cash,” or “third-party financing” from an outside lender such as a bank or credit union. It’s also worth noting that the listed car price is final with no room for negotiation, as Carvana provides no-haggle pricing.

Financing through Carvana

If you opt to finance through Carvana, it will ask you to enter your date of birth and income. Then they will perform a soft credit check, which won’t harm your credit score, and will provide you with a pre-qualified financing offer for your auto loan. The default is a 72-month loan, the maximum allowed, which you can shorten. This offer will be valid for 45 days.

Keep in mind that Carvana provides financing to even customers with bad credit who might otherwise have trouble securing financing from outside lenders. While there is no minimum credit score required, you must make at least $833 per month to qualify for financing. Also, you must be at least 18 years old and no co-signers or co-applicants are allowed.  

Paying With Outside Financing

For this step you should have your pre-qualification ready and your information handy. You will need to enter your loan details during this part of the purchase process. 

Paying with Cash

If you’re paying with cash you will select that option and proceed to the next step. 

Step 3: Select Delivery or Pickup 

Next, it’s time to select if you want to have your vehicle delivered to you or to pick it up at a nearby car vending machine. If you live within a local market, you can have the vehicle delivered to your door at no charge.  If you live outside its delivery market, Carvana hires a third party to deliver your vehicle — and costs range from $199 to $1,000. To save on delivery costs, you can drive to the nearest vending machine or take advantage of Carvana’s Fly and Drive program, which will reimburse you up to $200 toward airfare to one of its vending machine locations. Carvana will pick you up from the airport, and then you can drive your car home.

While many Carvana vehicles offer free delivery, we found that despite being in a major market, some used SUVs in our search had a $590 delivery fee. You still have to pay this fee if you pick up your vehicle from the vending machine. 

Home Delivery

If you select “touchless delivery”, it will provide you with the soonest date you can pick up the vehicle. You will finalize the delivery date in the final step of the car buying process.

Vending Machine

If you are visiting the vending machine for your vehicle, you will select your preferred pickup location. Then you will finalize a date at the end of the car buying process.

Step 4: Select or Decline Extended Warranty

Just because you’re purchasing a vehicle online doesn’t mean that you’re exempt from receiving an offer for an extended warranty, as you would from a dealership. You can choose from multiple Carvana Care options including extended warranties for 36 months/60,000 miles or 60 months/90,000 miles. Both are available for an added monthly fee. Or, you can decline extra protection and move right along.

Step 5: Upload Your Driver’s License

For identity verification purposes, you need to upload pictures of the front and back of your valid driver’s license. Make sure the picture is clear and all four corners are in the picture. 

Step 6: Finalize Financing

If you’re financing through Carvana, this is when you’ll finalize your credit application. You will be asked to enter your social security number, and your application will be sent to Carvana’s underwriting team. This is when the hard pull on your credit will take place. Depending on your credit history, debt-to-income ratio, and the price of the vehicle, Carvana might request additional proof of income. This could include bank statements, pay stubs, or tax returns, which they will likely request within the next day of when you submitted your application. 

Step 7: Payment 

You will now enter your bank information including your account number, which you will use for your down payment and/or monthly payment if you’re financing, or your entire payment if you are paying in cash.

Step 8: Schedule Your Pickup or Delivery

You’re almost there! Now you need to schedule your car delivery or when you want to pick your vehicle up. You can pick the day that works for you as well as a one-hour delivery window.

Step 9: Review and Electronically Sign Purchase Paperwork

The final step in the car buying process is to electronically sign the purchase paperwork that Carvana will electronically create. 

Step 10: Delivery or Pickup

Now for the fun part! Delivery occurs in as little as one week from when you completed the paperwork. On delivery day, your car will arrive with temporary license plates, and your final plates will be mailed to you when the DMV completes the registration process. You will also have to physically sign the same paperwork you electronically signed when you purchased the vehicle online. You’ll need to present a proof of insurance form from your insurance company as well as a valid driver’s license.

Upon delivery, you can take the vehicle on a test drive to make sure there are no surprises and that you like the vehicle. You should have the vehicle inspected by a mechanic during your seven-day trial period, which will begin when you approve the vehicle. Once you approve, Carvana will authorize your down payment withdrawal. On the sixth day, you’ll get a phone call asking if you are happy with your purchase or if you want to return it.

If you are picking up your Carvana car from the vending machine, the process is the same. Except, of course, at the time of your appointment you will be handed an oversized coin from a Carvana employee and you get to watch your vehicle descend from a tower. You will also get to take your vehicle for a spin before accepting your car purchase and filling out the requisite paperwork.

If you are trading in a vehicle, it will be appraised at the time of your delivery or pickup from the vending machine. The value you received online should not change provided the information was accurate. Your trade-in will then be picked up when your vehicle is delivered, or you will drop it off at the vending machine location. Carvana will hold your car during your seven-day trial period in case you decide to return your vehicle.

Bottom Line

Carvana offers a convenient and hassle-free car buying experience. While the lack of a vehicle test drive might be unsettling to some, Carvana’s seven-day return policy can add peace of mind. And if you decide to return your vehicle, the process is so quick that you won’t feel like you wasted much time.

So what’s the best place to buy a used car? Keep in mind that there are other online retailers to consider when looking for used cars for sale. We compared the two biggest players in the online car buying business here in our Carvana Vs. VROOM guide. You can also compare Carvana to the largest used car retailer CarMax in our CarMax Vs. Carvana guide. Carvana vehicle inventory appears on the iSeeCars.com car search engine, and you can filter to “online-only cars” to easily find the car you are looking for. 

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. Filter by make, model, price, and special features to find the best deal on your next vehicle. 

This article, How Does Carvana Work?, originally appeared on iSeeCars.com.