Can You Truly Buy and Sell Cars with Online Retailers like Carvana and CarMax?

Purchasing or selling a car can be a pretty big commitment. Research, price comparisons, paperwork, and lots of time and effort are a natural part of car buying and selling. Add to that the fact that there’s more than one way to buy and sell, and it’s easy to get discouraged. So let’s narrow it down and start with where you should be looking to buy or sell. Car dealerships used to be the only place to go, but now there are online retailers like Carvana and CarMax that claim to make things easier, save you time, and help you get or keep more money.

How well do online retailers like that actually work? Are they the better option for buying and selling cars, or should we just stick to classic car dealerships?

Classic Car Dealerships Versus Modern Tech and Comfort

Most people who have bought a car know how car dealerships work by now—you research a car you want, head to a dealership to test drive and ask questions, struggle through some paperwork or a loan application, and leave the lot in your new car.

Working with a dealership to sell is pretty straightforward, too, because you work with one or two people, sign some documents, and leave with a check or cash once the car is sold. It’s a well-known process to anyone who participates in it, but that doesn’t negate the amount of effort that goes into it.

While this process has changed very little in the past few decades, other things have changed a lot. The pandemic taught people one vital thing—not everything has to be done in person. The internet can be used for packages on Amazon, so why not for buying a car?

Modern expectations of how transparent and convenient things should be, along with an increased reliance on technology, have led to people being unhappy with traditionally in-person activities like visiting a car dealer.

National online retailers have risen to close the gap between traditional markets and modern customers, but how effective are they? What do Carvana, CarMax, Vroom, or other online retailers do for the automotive industry that car dealerships can’t?

The Benefits of Online Automotive Retailers

Online retailers in the automotive industry were created to give certain benefits to individual buyers and sellers. CarMax, for example, specializes in helping people compare prices and get test drives that would usually require a lot of travel on a buyer’s part. Carvana has “vending machines” for cars that allow you to pick up newly purchased vehicles at your convenience.

Recent reports say online retailers will purchase used vehicles for as much as $1,000 more than traditional car dealerships. Because of their online-only approach, there’s no middle-man trying to overcharge you or upsell you when you purchase a vehicle. You can buy and sell at your own pace from the comfort of your home.


And best of all, there’s more transparency and convenience for customers. CarMax’s purpose, according to its website, is “to drive integrity by being honest and transparent in every interaction.” Vroom aims to make buying a car as simple as browsing online for shoes, whether you buy, sell, trade-in, or need financing.

Many national retailers have also strived to give customers everything they need in one place. Instead of going from one dealership to another or from your chosen car dealership to a bank for a loan, you can browse inventory from every available Carvana location and get financing options without leaving their website.

These and more are critical benefits that online retailers provide drivers who don’t or can’t work with dealerships, but that doesn’t mean that there aren’t downsides to them as well.

The Disadvantages of Known Online Retailers Like CarMax and Carvana

Just like online retailers can provide things that car dealerships can’t, there are things they lack compared to established in-person dealers. The main disadvantage of working with an online retailer when purchasing is that you can’t negotiate with a website the way you can with a salesperson.

This means that, while selling through CarMax can get you more money, buying with them could cause you to spend more. CarMax, specifically, has been shown to have one of the highest per-car profits at a bit over $2,000—which could be because of this inability to negotiate prices.

Warranties and vehicle return policies are also vastly reduced when you shop at an online retailer instead of with a car dealership. Carvana has a seven-day/250-mile return policy, as does Vroom—this is a significant change compared to the thirty-day policy that’s still used by many dealers. Warranties offered by online dealers are also shorter and more restrictive if they aren’t provided by the vehicle manufacturer.

On top of all that, online retailers aren’t as trusted as traditional car dealerships yet. They aren’t as well established or known, so many steer clear or struggle to use online retailers effectively, leading to bad experiences.

Should You be Using Online Retailers Instead of Car Dealerships?

Now that you know about some of the crucial pros and cons of online retailers, it’s time to decide—should you leave for your local car dealership or open up your laptop? Honestly, it depends on the kind of experience you want.

If you’re selling and want a simple sale with the most profit, your best bet would be CarMax. If you want the chance to negotiate a lower price for a new car and a guaranteed warranty, find a car dealership near you to visit.

If you’re unsure how well an online retailer will treat you, at least you know what to expect from car dealerships. But if you’re tired of the work and pitfalls of dealing with a dealership, check your options online instead.

Or you can combine the two to get the best of both worlds and create an experience that works for you.

This post may contain affiliate links. Meaning a commission is given should you decide to make a purchase through these links, at no cost to you. All products shown are researched and tested to give an accurate review for you.

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