Laura interviews Sarah Wyant from Carvana about tips for getting the best deal when buying or selling a used car online. They discuss what you need to know, including how to save money, create a car budget, prepare for financing, have a more enjoyable experience, and receive a real offer to sell your car in minutes.
Hey everyone, and thanks for joining me this week. My name is Laura Adams and I’m a personal finance expert. Who’s been hosting the money girl podcast since 2008. I’m also the author of several books, including my most recent title, a number one, Amazon new release called money smart solo entrepreneur, a personal finance system for freelancers entrepreneurs and side hustlers. If you’re building a business or are thinking about earning more income, I hope you’ll grab a copy of the paperback ebook or audiobook today. And if you’re on social media, be sure to connect with me on [email protected] is my personal website where you can use my contact page and learn more about my work books and money courses. The mission here is super simple. It’s just to help you get the knowledge and motivation to prioritize your finances, build wealth and have more security and less stress.
Every show is created to make sure you come away with practical advice that will help you make better money decisions and take your financial life to the next level. And we also do interview shows when I find somebody who I think is really interesting or can kind of delve into a topic in a, a little bit more deep way than I can. I love to bring you those people as well, and that’s what we’re gonna do today. So if you are enjoying the show, please subscribe also participate. I’d love getting your money, questions, or comments. The best way to do that is to leave me a message 24 7 on our voicemail line, just call 3 0 2 3 6 4 0 3 0 8. And you can also email me using the [email protected] If you want to read a companion blog post for this or any show, they’re always in the money girl [email protected] to find today’s show, just look for episode number 719 called how to buy or sell a used car online.
If you’re like me, you remember that back in the old days, you had to get up off the couch to visit a car dealership or go through pages of classified ads to find used vehicles for sale. What a hassle now online platforms make the process so easy. You might actually enjoy shopping for your next car. And since I’m getting ready to help my mom sell a car, I wanted to talk to somebody about how this process works online. So I interviewed Sarah WT. She’s the assistant director of financial planning and analysis at Carvana. You’ve probably seen Carvana’s TV commercials. They feature these really cool tall car vending machines, which is amazing. I got connected with them through finder.com, which is an online comparison site. And I really wanted to learn more about how their whole car buying platform works. Sarah and I had a great conversation about tips that every car buyer and seller should know.
We talk about ways to get the most from the Carvana platform. And we cover a bunch of topics, including how Carvana shoppers save an average of a thousand dollars compared to using a traditional car dealer. We cover how you can use an auto loan calculator to know exactly how much you can afford before you start shopping for a car. We talk about why it’s convenient and actually really empowering to buy or sell a car anonymously online. We talk about whether purchasing a new or a used car is the best financial move for you and how to prepare for auto financing and apply without getting a hard inquiry on your credit. We cover tips to know if you should sell a vehicle or accept a trade in when buying your next car and even how to get a genuine offer to sell your car in minutes. Even if you haven’t fully paid it off. I learned a ton in this interview and I know you will too. All right, here’s my interview with Sarah, Sarah. I am so excited to have you on the money girl podcast,
Laura, I’m very excited to be here. Thank you for having me
Tell the audience a little bit about what you do for Carvana.
I’ve been with Carvana, uh, since may of 2016, I started on the accounting team, the corporate accounting team. And since then I’ve transitioned into the finance team where I do financial planning and analysis for Carvana.
I am, uh, about to use Carvana. I was telling you earlier that my mom needs to sell a car. And so we’re gonna go through the Carvana process. So I’m hoping you can maybe give us a little bit of information about what people should know about both buying a car online and selling a car online. So let’s start with buying a car for those who are unfamiliar with Carvana. And I’m sure a lot of people have seen those amazing Carvana commercials that you all have, and, but they may not know how it all works. How do you buy a car through Carvana? How does the platform work?
The best part about the Carvana platform is that it’s super easy. The first thing that perspective car buyers need to know is that it is an all in one used car buying platform, which really means that Carvana sells cars online. It’s all in one, because you can go to the website, get preapproved for financing, or bring your own financing to the table, whether it be cash or financing from another lender, search for cars, buy a car, go through the entire process to buy it, and then have it scheduled for either delivery or pick up at a vending machine in one of our local markets.
Love that now. So tell me a little bit about the vending machines, where are they? Um, can people still, you know, go through this process if they’re not near a vending machine? Um, who’s, you know, who’s eligible for the platform.
We have 30 vending machines across the country. A customer in a market, a geographic area with a vending machine is more than welcome to pick up their car or sell a car to Carvana and take it to the vending machine for a very cool experience where the, the car is in the tower and they see it, you know, they drop a coin into the, into the vending machine mechanism and the car literally gets spended to them. Very exciting, uh, exciting process. However, if you happen to find you live in an area that does not have a vending machine, first of all, just wait, I’m sure we’re coming. Uh, but that does not preclude you from buying a car from Carvana’s website. We will deliver that car straight to your door or straight to your, your weird place of work, wherever you would like us to deliver that car. Um, we will be there free, um, in, in a lot of, in a lot of areas, um, around the country.
That is so amazing. I mean, you all have really revolutionized this whole process. I just think the idea of having a car delivered to your home is, I mean, that’s just amazing. So tell me a little bit about what the benefits are. You know, if somebody’s thinking about buying a car and they’re like, well, I could go to the local dealer and I could look around, or I could go to some, you know, car marketplace online. What do buyers get if they choose to go through the Carvana platform versus other options?
Laura, that’s a fantastic question. And there are so many benefits. So I, I’m gonna start with what I think is the most important benefit and what car buyers are going to see right away. And that is tons of transparency, transparency throughout the car buying experience really puts that shopper in the driver’s seat, which is important because I don’t think a lot of people feel that way. Um, when thinking about the traditional car buying experience, they don’t feel like they’re in control. So the website offers them transparency first in providing tools to let a shopper know how much they can afford. So you can get pre-qualified for financing on Carvana’s website. You can also go through a process to understand how much you’re gonna spend every month on a car. If you have a certain credit score and you get a certain rate on a loan and you put a certain amount down, this will be your monthly payment, that information is available to any shopper as they browse for vehicles.
So, you know, Hey, I’m gonna look at this car. Can I afford it? Yes, I can because I’ve already gone through these very simple steps, couple of minutes, and we’ll let you know kind of what you can afford. Um, I think that’s a huge benefit on the finance side of the car buying experience. Transparency follows a shopper throughout the entire process though, once you find your, your, your pre-approved for you’re, you you’re preapproved for financing, you browse for a vehicle that you love. You click that button that says start my car buying process. The website is going to show you every step of the process before you get there. It’s going to say, here’s the first step, step one, step two, all the way through the end, which is really scheduling your delivery or your pickup. It also tells you how many minutes you should expect to spend in each one of those steps of the buying process.
So you kind of know your investment, right? You know how much your, you can afford. You found a car you loved, and you know what it’s gonna take to get you from start to finish. You’re not spending four hours in a dealership you’re on your couch and you can do this in, you know, a very short period of time, which I think is really important to a lot of people. One of the other things I love about the website is that it doesn’t know who you are. It doesn’t judge. You , you walk in it doesn’t know you’ve never bought a car before. It doesn’t know. You’re a, you know, you’re a woman and judge you for that. Um, it doesn’t judge you for having a lower credit score and try to take advantage of you. Everybody gets a great deal at Carvana.
Yeah, that’s incredible. And I do, you know, agree with you that having that anonymity can really take a lot of the scariness out of buying a car because a lot of people do expect to be sold to, right. They expect to kind of have to haggle and go through some complicated negotiation and talk about money and math and really, you know, get down and dirty with somebody who’s trying to, you know, they’re trying to make a commission, they’re trying to sell a car, obviously, but it doesn’t give the buyer any leverage. You know, it really only gives the, the seller, the leverage you’re kind of in their territory, you’re in their lot. And, and that really does put them in a, you know, just an advantageous position relative to you coming in, maybe not knowing anything about cars and buying. And like you said, especially if this is a first time purchase, you get the leisure of just browsing for cars, looking at what is in your price range.
You decide what’s in your price range. You don’t have somebody telling you, Hey, this is gonna be the great car. You need to stretch your budget and do this and feel that pressure because a lot of people will do that. They will really cave into that and spend more than they can afford or get talked into buying something that in stretching out the payments, you know, forever and ever so that they can get something that they think is affordable when it’s really not. So I love that idea of being able to shop 24 7 when it’s available to you. I mean, you don’t have to wait for the dealer to be open. You don’t have to go according to their schedule and their timeline. So, um, that’s, that’s really, uh, a fantastic way to shop. So tell me with all these wonderful services that Carvana is offering the delivery and all of this fantastic online, you know, availability, uh, and the platform. How do Carvana prices compare to other options? Is it going to be more expensive for the same car?
The easy answer to that question is no, because Carvana does not have the traditional dealership structure. We don’t have sales people who earn sales commissions on sales. We are able to offer very competitive pricing. On average, a car buyer is going to get a thousand dollars off of their purchase when they purchase from Carvana versus another dealer, they get all of the benefits that we just discussed. They get a great deal, but they also still are going to retain some of the good parts about the traditional car buying experience. And, and what I mean by that is there is opportunity for human interaction. You can get on the phone, you can get on a chat function and you can talk to a human being, somebody who’s there, someone who will hold your hand over the phone, um, and, and walk you through the process the same way the website’s gonna walk you through, but provide a little bit more assurance to somebody. So with that thousand dollars off on average, to buy your car, um, and with kind of all of the, the good parts and none of the bad parts about the traditional car buying experience, it’s, it’s just a great deal for car buyers.
So if somebody’s listening and they’re not sure, should I buy a new car, should I buy a used car? Do you have any tips for listeners to help them make that decision? I’ve always been a, a huge fan of buying used luxury vehicles due to the fact that even if you’re buying them a year old, you are buying it at such a discount because so much of the depreciation has already occurred within that first year, second year. Um, in a lot of cases, the cars are still in excellent shape. So, you know, I’ve always promoted that, um, I don’t know, is that, how do you feel, how are there any kind of ideas you can give folks when they’re thinking about whether buying a used cars, right. For them?
Yeah, no, I mean, preach I’m I’m on your page. I think the same thing, I am a I’ve I’ve always bought used cars because I believe that I get better bang for my buck. I am getting more car for my money because I’m not paying for that first year of depreciation. I mean, listen, I think this is a huge purchase. People should do what’s best for them and their family get the car that they think is right for them, but knowledge is power. And I do believe that it is a better deal normally to buy a used vehicle because you’re not paying for that first year of depreciation that said one could make arguments. You know, what is a new car? Is it, is it, is it not a ton of mileage? Is it the year of the vehicle? Is it fewer than two own previous owners?
Um, I think you can find all of that. On Carvana’s website. We have such a wealth and variety of vehicles on the website. In our inventory car buyers can find kind of their sweet spot, you know, low mileage vehicles, high mileage vehicles, because they’re less money. Um, they can find the right trim for them. They can get a car that is a little bit higher quality, but maybe has a couple of years of use already and, and feel very much like this car is new to them, but it’s exactly what they want. And they’re getting it for far less than they would’ve paid for that car. New.
And is there anything that you can say about kind of the condition of the vehicles? How can a buyer know that, you know, the, the car is going to be in good condition? Do they need to go and do inspections or do you do inspections? Like how does that work? On the buying side,
Carvana is going to do the heavy lifting there. We will inspect every vehicle. Um, we take, uh, pictures of every vehicle. So hopefully buyers have a lot of information once that car, you know, right before that car arrives on their driveway, they kind of know the Nicks, the dings, any, any paint issues, any previous problems, but Carvana’s not gonna sell a car that doesn’t pass our very rigorous inspection process that said there is there’s something to be said for sitting in that car, smelling that car, touching it, being, being in it, understanding how it works and how it’s laid out. Once a car is delivered. Customers can definitely take that opportunity. Have seven days for a test drive seven days or 400 miles to decide, is this, is this the right car for me? Did that scratch look a little bit bigger or, you know, a little bit smaller, um, on the website than I’m comfortable with. Do I like the way that the brake pedal feels under my foot? There’s something to getting in that car and driving it around and knowing that it’s yours. And Carvana’s gonna give you that opportunity after we’ve already taken it through our inspection process.
Got it. Okay. That’s fantastic to know. And so if I don’t love it after seven days, what happens then? Do you all come back and get it? Do I need to bring it back to you? How does that work?
No. Great question. Um, we’re gonna come pick up that car again, if you loved the vending machine process and you’re just dying to see the vending machine again, great. Drop it off at the vending machine, but alternatively, we will come to your doorstep and we will pick up that car if you’ve returned it outright and you haven’t bought another vehicle. Um, great. If you’ve hopefully found a replacement vehicle on the website and said, Hey, I just wanna swap it out for this one that I see. Maybe I thought I wanted black, but really you live in Arizona and you realize it’s super hot in Arizona and you want a white car instead. Uh, you know, you can swap it out for the color, you can swap it out. Um, and we will bring that new car to you and, and exchange for your older vehicle.
All right. Let’s switch gears a little bit and talk about the selling side here. So, um, let’s say that you are, you know, you’ve got a vehicle, an existing vehicle that you need to get rid of in order to buy your new car. Tell me how that works. Can you actually take someone’s old car and list it and then also help them buy the new car? I mean, can that all be done via the Carvana platform?
Absolutely. So there are two mechanisms to dispose of a current vehicle. You can trade it in when you buy a car from Carvana and as part of your purchase process for that new car trade in, um, uh, trade in your existing car, or you can sell a car outright to Carvana the best part about that process, both of them really is that it works the same way. We’re gonna come pick up that trade or that, that, that car that you wanna sell to us right at your doorstep. It’s gonna be highly convenient for you. It’s going to, it’s going, you’re gonna get the same amount of transparency in both of those processes. Um, you can compare what we would give you for your trade or what we would give you for just a straight up sale to Carvana. The selling process is really simple for a car seller. When you go on the website, you can give details for your vehicle. The website is going to produce a real offer. We offer you this much money for your car. When we come to pick that car up from your driveway, we’re going to hand you a check. And at that point in time, the car is sold. You do not have to wait for us to inspect it and list it on Carvana’s website and sell it to somebody else before you get paid.
I love that. I mean, that just makes the process so, so simple. And, you know, in a lot of cases, people really are very undecided about, well, should I list the car and should I sell it or should I trade it in and really, uh, get very worried about that process. And I, I’m gonna tell you, I usually trade in cars simply because that is the, the least hassle when you’re going through this process. Um, just being able to get the credit for it. And of course, you’re, you wanna make sure that it is a good, fair Val market value for the vehicle and, and get that credit. But gosh, it just makes the whole process. So, so much more simple and such a, a smoother process when you don’t have to get your new car, then, oh my gosh. Now I’ve gotta sell, um, this other vehicle or try to sell it first before you start shopping. Um, so I love that you all make that a pretty seamless process. And tell me since you’re a financing person, Sarah, what if I have a car that I want to either sell or trade in, but it’s not paid off yet. How does that work?
Carvana is gonna give you an offer for the, our perceived value of that trade. If your existing loan amount is less than that offer, you get to keep the difference. We’ve given you more than you owe on that car. If our, our, our trade amount is less than your existing loan amount, and maybe that’s okay with you, maybe, you know, that, um, that you were gonna be in that position. You will have to pay off the remainder of that loan, the difference between what, the value that you get from us and the value of your loan amount at that time, Carvana though is going to do the legwork and we’re actually going to pay off your existing trade-in vehicle. So we’ll collect the money and we’ll pay off the lienholder.
Got it. Okay. So that’s fantastic. So yeah, as long as you’re not upside down on your vehicle, in most cases, it should be pretty straightforward. However, if you do owe more than a car is worth, you may need to come out of pocket for that difference. That’s always the case, uh, with vehicles. So, yeah.
Um, absolutely, and customers get to make that decision for themselves. Transparency is key. Information is power. Um, as long as they kind of know that that’s what’s gonna happen, they can make the right decision for them.
And so speaking of financing, do you all offer, um, direct financing through Carvana or should folks look for a loan through their bank or credit union? What are the options? If you’re, if you do need to finance the car you’re buying,
There are three ways to finance a car with Carvana. You can use Carvana financing and a lot of customers do I believe about 80% of our customers will use Carvana’s financing. Um, alternatively, you can bring your own financing to the table through a third party lender. So you really like working with the bank. You’ve always purchased your cars through them. You’re bundling everything. That’s great. Bring your own financing. Um, that’s definitely a way to do it, or you can pay cash.
What is the best way for someone to know exactly how much they should or can buy for a vehicle? You mentioned having some tools on the site, um, where do people go to access that, that information or calculator to kind of hone in on what is the best budget that they should be setting for their new car?
I think the best place to go first is Carvana’s website. You can get preapproved for financing on Carvana’s website with a soft poll on your credit, which means that we are going to, we’re going to pull your credit to be able to provide, um, a, a rate on a loan. However, that poll is not going to impact your credit score at all. So there is no pressure and there is no penalty for going on Carvana’s website and getting preapproved. Once you’ve done that, you kind of have an idea of what your loan rate is going to be on the loan. And we’ve got a calculator on the website. Again, no pressure. You don’t have to buy a car from us simply by virtue of using the calculator. However, it is a great resource to understand what can I afford. That is the best first place to go next.
I think car buyers need to think about the totality of costs of owning a vehicle, not just buying the vehicle, but what is maintenance going to look like? If you get an SUV, those tires are gonna be a lot more expensive. Um, when you buy them, what are your insurance costs gonna look like? What are your fuel costs gonna look like? Maybe you live in an apartment and they’re storage costs. You have to pay to actually put that car in a garage. Um, those are things that I think all good. Um, you know, all well prepared car buyers should think about when they enter into the experience.
Yeah. That’s fantastic advice. And I love the fact that you’re saying this just is just a soft pull on your credit. So yeah, basically that means there is no downside. There is no risk. Your credit score is not gonna take a ding. It’s gonna be an easy way for you to just figure out what you’re approved for. And then you decide, should I, you know, borrow that full amount or maybe I wanna borrow less and make it, uh, a little bit more budget friendly, but that’s up to everybody to figure out how much they can afford and how much, you know, the car is, uh, what percentage of their budget should go toward transportation. So Sarah, any other kinda last tips or pieces of advice that you’ve got for folks, if they’re thinking about buying or selling a car right now,
The two best things that somebody can do for themselves. When they’re thinking about buying a car, selling a car, these are major financial transactions is one arm yourself with as much information as possible search online research, talk to people who have been through the process, understand where pain points exist and try your best to eliminate them and be prepared before you find that dream car. And you gotta have it. I’ve been there before. Sometimes you just gotta have that car. That brings me to my second point. Yeah. Right? Like it’s this huge financial and you there’s so much emotional, you know, so emotionally charged, you wanna have that car. Right. Um, and that really leads me to my second point. If you’ve done that, that research, if you’re prepared, if you are ready, there is no reason you cannot have a ton of fun and just love that car search for it. Like, let it be something that fills you up and excites you, let Carvana be this mechanism that allows you to have a lot of fun with the process and just enjoy from, from start to finish buying and owning that car.
I love that because typically a lot of people kind of dread the whole process, right? They think, oh my gosh, this is just gonna be complex and stressful. Um, and I think what you’re talking about is, is really important. Uh, and I’ve totally shopped for cars on Carvana and looked at all the, the amazing cars, how many cars are on the platform right now? Do you know,
We’ve got about 50,000 cars, um, available for purchase and viewing on the website. So there is no end to the volume and variety, uh, get on there. There’s gotta be something for everybody.
So you can sort by price, you can sort by model or year. I mean, you can really narrow it down
Or, you know, maybe what’s really important to you is features. You want that third row seating because you’ve got a growing family. You, um, live in a cold climate. And so heated seats are super important to you. You can shop by all those features. Um, and you can also shop by the big things. Like you said, make model year price. It’s, it’s all out there for you. And it’s, it’s really fun to look at the, the, the possibilities.
Love it, Sarah, thank you so much. I hope this helps everyone understand a lot more about how Carvana works and where would you recommend folks go, obviously carvana.com. Is there anything on the site that you would point people’s attention to when they go there for the first time?
Carvana.com is a wealth of, of resources and information. It depends on where you’re at in the fir in the, the, the car buying process. But if you’re at the beginning stages being that finance person, I, I say, you gotta know what you need to spend. What you’re you can afford, empower yourself with that information so that you, uh, you know, you know, that you can buy a car in a really responsible way, in a way that’s gonna suit you and your family.
Sarah, thanks so much. I appreciate it.
Thank you, Laura. Thank you so much for having me
A big, thanks to Sarah for such a great interview. I really appreciate you coming on the show. And before I let you go, if you have not joined my free private Facebook group called dominate your dollars, you need to check it out. It’s an amazing group of people who are asking the right questions, helping other people, and ultimately reaching ambitious financial goals. All you have to do is search for the group on Facebook. And as I mentioned, you can visit Laura D adams.com to find my contact page and more about me, my books, and online courses. That’s all for now. I’ll talk to you next week until then here’s to living a richer life. Money girl is a quick and dirty tips podcast. It’s audio engineered by Steve Ricky bird with editing by Adam Cecil. Our advertising operation specialist is Morgan Christensen. Our assistant manager is Emily Miller and our marketing and publicity assistant is Davina Tomlin.
In the old days, you had to get up off the couch to visit car dealerships or read pages of classified ads to find used vehicles for sale. Now, online platforms can make the process so easy you might enjoy shopping for your next pre-owned car.
Since I’m getting ready to help my mom sell a car, I interviewed Sarah Wyant, Assistant Director of Financial Planning & Analysis at Carvana. If you’re like me, you’ve seen Carvana’s TV commercials featuring tall car vending machines. I got connected with them through Finder.com, an online comparison site, and wanted to learn more about how the car buying platform works.
Sarah and I had a great conversation about tips that every car buyer and seller should know and ways to get the most from the Carvana platform. Here are a few topics we cover on this Money Girl podcast interview:
- How Carvana shoppers save an average of $1,000 compared to using a traditional car dealer.
- How to use Carvana’s Auto Loan Calculator to know how much you can afford before shopping for a car.
- Why it’s convenient and empowering to buy or sell a car anonymously online.
- Whether purchasing a new or used car is the best financial move for you.
- How to prepare for an auto loan and apply without getting a hard inquiry on your credit.
- Tips to know if you should sell a vehicle or accept a trade-in when buying your next car.
- How to get a genuine offer to sell your car in minutes, even if you haven’t fully paid it off.
This article by Laura Adams was originally published on Quick and Dirty Tips.
Published by Debt.com, LLC