Short Answer: Carvana and CarMax get their cars through auctions, trade-ins, and purchasing individual vehicles from customers. The most common sources of automobiles at CarMax are customer trade-ins and sales, while Carvana purchases most of its cars at auctions. Carvana and CarMax do not generally receive new vehicles directly from manufacturers, but CarMax does own two Toyota locations which sell both new and used cars. Both Carvana and CarMax offer inspection certification, warranties, and seven-day return periods to ensure that customers are satisfied with the quality of their used cars. For more details of Carvana and CarMax’s vehicle selection processes, see below.
Where Does Carvana Get Its Cars?
Carvana sells cars, crossovers, SUVs, minivans, and trucks. Carvana acquires vehicles through auctions, private sales, and trade-ins.
The majority of Carvana’s cars come from auctions. Automotive News reports that by the end of 2018, only about 17% of Carvana’s inventory came from consumers. Customer service representatives were unable to confirm current statistics but did say that most of its cars still come from auctions at the time of this writing.
Carvana only sells used vehicles and does not receive any new cars directly from manufacturers, customer service representatives said. However, many auction vehicles do come directly from dealerships. Some are practically new, with very low mileage and no previous owners other than the dealer. A dealer may offer vehicles at auction for a variety of reasons. They may have been unable to sell the car due to local demand or a cosmetic feature like the color. Or, they may have replaced the car with a newer model.
Carvana provides a free CARFAX report for each vehicle listed on its website. These reports include information about the vehicle’s previous ownership. If you are looking for a dealership-owned or like-new car, you can sort your search results by lowest mileage and check the CARFAX report.
Quality Certification at Carvana
The vehicles Carvana buys must have clean titles with no reported accidents, fire damage, flood damage, or frame damage. Carvana’s inventory must also pass a 150-point quality and safety inspection to become Carvana Certified before going up for sale. The inspection checks for suspension issues, engine problems, excessively worn wheels or brakes, and other functional systems as well as any interior or exterior cosmetic imperfections. Carvana also details the car, checks all fluids, and changes the oil before delivery.
Carvana Warranties, Returns, and Repairs
Carvana has a seven-day return period which allows you to get a refund or exchange your car within a week after purchase. Carvana also backs up its quality certification with a 100-day or 4,189-mile limited warranty for every vehicle. The warranty covers any mechanical issues the car may have during the covered period.
Carvana offers two options, CarvanaCare and Gap Coverage, for customers who wish to extend coverage beyond the 100-day warranty. CarvanaCare offers repairs, while Gap Coverage pays the gap between your insurance payout and the amount you owe on your vehicle if it is stolen or totaled.
Interested in purchasing a car from Carvana, but wondering whether you can finance? See our related article for Carvana’s financing requirements.
Where Does CarMax Get Its Cars?
CarMax buys cars, crossovers, SUVs, vans, and trucks. Like Carvana, CarMax gets cars through auctions, individual customer sales, and trade-ins.
Customer service representatives were unable to provide percentages regarding roughly how many of its cars CarMax buys through each of these methods. However, one representative did tell us that most of the vehicles it sells are from trade-ins or private sales. Industry publications also report that up to about 52% of CarMax’s inventory comes from customers, depending on the year and the location.
CarMax buys used or certified pre-owned cars from dealerships at auction, but most CarMax locations do not buy new vehicles directly from the manufacturer. However, there are two CarMax Toyota locations which sell new and used Toyota vehicles: CarMax Kenosha Toyota in Wisconsin and CarMax Laurel Toyota in Maryland.
Quality Certification at CarMax
All of the vehicles CarMax sells are “CarMax Quality Certified.” Certified vehicles have no flood damage, fire damage, or salvage history and must have a clean title. CarMax also puts each vehicle through a 125-point inspection and completes repairs for minor issues like dents before listing it for sale. The certification process checks the engine, tires, wheels, and other components for abnormalities like corrosion, leaks, or excessive wear.
CarMax does purchase cars that are older or have some damage, as previously reported. However, each vehicle goes through an appraisal process which includes an interior inspection, exterior inspection, and test drive. Only vehicles that are from recent model years, have reasonable mileage for their age, and have no severe accident history are put up for sale on CarMax lots. CarMax sells any particularly high-mileage, old, or damaged cars and those without a clean title at auction instead of putting them on its lots.
CarMax Warranties, Returns, and Repairs
Each sale at CarMax includes a limited warranty and a seven-day, full-refund return period. The CarMax limited warranty covers repairs for the vehicle’s major operating systems (including labor) for 90 days or 4,000 miles after purchase. The optional MaxCare Service Plan offers ongoing coverage for repairs beyond the 90-day warranty. Some cars also have existing manufacturer warranties.