Ava AbbottCarvana is an online car retailer headquartered in Tempe, Arizona. The company was founded in 2012 by Ernest Garcia III, Ryan Keeton, and Ben Huston to sell second-hand cars. Since its founding, Carvana disrupted the sector with innovative offerings.
It was one of the first companies in the US to introduce multi-story car vending machines. The 9-year-old company was named to the 2021 Fortune 500 List, making it one of the youngest firms to be featured. For the full year of 2020, Carvana generated more than $5.5 billion in revenue. Carvana has 3879 employees. [1]
Carvana stands out from the crowd, thanks to its customer-focused approach. The used car retailer recently introduced a flexible vehicle financing program for buyers that takes only a few minutes to complete.
Any potential buyer over 18 years and makes at least $4,000 per year can apply for a pre-qualified auto loan serviced by Carvana. With over 1 million customers served, Carvana is the fastest-growing used car retailer in the US. The company competes with alternative sites like Car24, CarGurus, and AUTO1. [2]
Here is an in-depth analysis of Carvana’s competitors and alternatives:
1. CarGurus
Year founded: 2006
Headquarter: Cambridge, MA
CarGurus is a leading online automotive research and shopping platform. The company started as a vehicle reviews website and later transformed into an online marketplace for used and new cars. Potential buyers compare local listings on CarGurus before contacting the seller to purchase their vehicle. CarGurus’ revenue for full-year 2020 was $551.5 million, a 6% decrease year-over-year.
CarGurus was founded about seven years before Carvana, giving it a significant head start.
The company offers both used and new vehicles, while Carvana is a used car dealer. However, Carvana is ranked 71st in the Internet space, while CarGurus is 6th in this segment. CarGurus is the top Carvana competitor for many reasons. [3]
2. Vroom
Year founded: 2013
Headquarter: New York City, NY
Vroom is an online marketplace for buying, selling, and trading used vehicles. This platform offers robust features to help users buy or sell cars online. Potential buyers can search by make, model, year, and location. They can also view the car’s specs, photos, and pricing information. In 2020, Vroom generated $1.358 billion in revenue. The company has 800 employees.
Unlike Carvana, Vroom’s listings don’t provide monthly payment estimates. Both companies offer auto financing. But Vroom’s flexible pricing model is ideal for some buyers than Carvana. Vroom users can purchase Toyotas and Chevrolets for around $7,500. It is one of the best Carvana alternatives for budget-oriented buyers. [4]
3. CarMax
Year founded: 1993
Headquarter: Richmond, VA
CarMax is a car dealer specializing in new and pre-owned vehicles. Like Carvana, CarMax allows users to browse listings for new and used cars at fixed prices. The company has 25,000 employees.
The main competitive advantage for CarMax over Carvana is its affordable prices. Customers can buy a vehicle for as little as $6,599 and pay only $90/month with CarMax’s financing. But some of its cars have defects hidden by cosmetic restorations.
CarMax offers test driving and allows customers to return acquired vehicles after 30 days versus Carvana’s 7-day return policy. Overall, CarMax is one of the top Carvana competitors and alternatives. [5]
4. Auto1 Group
Year founded: 2012
Headquarter: Berlin, Germany
Auto1 Group is Europe’s leading online platform for buying and selling used cars. The company offers a wide variety of vehicles in more than 30 countries, including Carvana’s domestic market in the US. In 2020, Auto1 sold over 450,000 vehicles and generated $3.19 billion in revenue.
Auto1 refreshes its inventory constantly to ensure each customer finds their dream car. Like Carvana, Auto1 provides financing options to its customers. But Auto1’s loans are more flexible and customized to customers’ needs.
Auto1 operates via local “we-buy-your-cars” brands like wirkaufedeinauto.de. So, it targets local buyers and sellers more efficiently than Carvana. Auto1 Group is a worthy top Carvana competitor. [6]
5. ACV Auctions
Year founded: 2014
Headquarter: Buffalo, NY
ACV Auctions is the leading dealer-to-dealer platform for buying and selling cars wholesale. This online auction platform simplifies the wholesaling process, from title management to purchasing, arbitration, and logistics. For FY 2020, ACV Auctions generated $208.36 million in revenue. The company has around 1150 employees.
ACV Auctions provides a full-service automotive marketplace with unmatched transparency. The company conducts a thorough vehicle condition inspection and alerts potential buyers. With over 110,000 vehicles sold per quarter, ACV Auctions is the best Carvana alternative for wholesaling used cars. [7]
6. Cars24
Year founded: 2015
Headquarter: Gurugram, India
Cars24 is a platform for buying and selling used cars that blends online and offline transactions. The company also offers an online auction platform for selling pre-owned vehicles and related services, such as car ownership transfer paperwork. Cars24’s revenue surged 82% in FY 2020 to $400 million, cutting its losses by 12.5% year-on-year. [8]
Today, Cars24 operates 202 branches and works with more than 10,000 channel partners across 230 cities in India. In 2019, Cars24 launched vehicle inspection services and started offering buyback guarantees on verified cars.
In May 2020, the company launched Cars24 Moto for used two-wheelers such as motorbikes and scooters. The used car marketplace recently expanded into several countries, including the UAE and Australia. Cars24’s rapid global expansion increases its competitive advantage over Carvana.
7. TRED
Year founded: 2012
Headquarter: Seattle, WA
TRED is an online peer-to-peer marketplace for used cars. The platform streamlines the process of buying and selling second-hand vehicles online. In 2021, TRED raised $25 million in funding to expand its platform and market presence. The company has 32 employees, so it still has a long to catch up to Carvana.
Unlike Carvana, TRED allows customers to test drive cars before they purchase. The company also offers auto financing, vehicle valuation, and fraud protection.
TRED recently entered six new markets in the US, including Salt Lake City, Denver, Phoenix, Chicago, and Las Vegas. With the latest funding, TRED has the resources to expand its products and challenge Carvana for market share. [9]
8. Cazoo
Year founded: 2018
Headquarter: London, UK
Cazoo is one of Europe’s fastest-growing online platforms. Within 2 years after its launch, Cazoo had sold over 40,000 cars online. The company’s efficient workflow guarantees delivery in as little as 72 hours.
Cazoo stands out from other car-selling sites, thanks to its customer service. The company offers a 30-day money-back guarantee on all car purchases versus Carvana’s 7-day return policy. In Oct 2021, Cazoo closed the deal to acquire Vans365.
This acquisition will accelerate Cazoo’s expansion into buying and selling commercial vehicles online and increase its edge over Carvana. [10]
9. Cars.com
Year founded: 1998
Headquarter: Chicago, IL
Cars.com is a leading automotive marketplace and solutions provider. The company’s mobile app and online platform serve around 26 million car buyers and sellers per month. In 2020, Cars.com made $547.5 million in annual revenue. It has 1500 employees, about half Carvana’s workforce.
In June 2021, Cars.com transformed its online platform and mobile app, boosting the loading time by 87%.
The new site provides real-time inventory updates of over 50,000 cars daily. The platform also offers editorial content, over 10 million reviews, and nearly 20,000 local dealerships. With millions of car listings, Cars.com is a worthy top Carvana competitor. [11]
10. Auto Trader Group
Year founded: 1997
Headquarter: Atlanta, GA
Autotrader is an online marketplace for new and second-hand car buyers and sellers. The platform aggregates certified used cars for sale from dealers and private sellers. For FY 2020, Autotrader generated $416.7 million in revenues with a net income of $231 million. The company has around 859 employees.
The main competitive advantage for Autotrader over Carvana is its authoritative consumer insights. The platform offers automotive reviews and shopping advice. Potential buyers can also use comparison tools to find trusted information about auto financing and insurance. Autotrader is an expert in online marketing, increasing its advantage over Carvana. [12]
11. CarTrade
Year founded: 2009
Headquarter: Navi Mumbai, India
CarTrade is India’s largest online platform for buying and selling used cars. The company also offers auto financing, insurance, and transportation to custom and scale dealers. In 2020, CarTrade generated $41.8 million in annual revenue.
CarTrade is Car24’s top competitor and an alternative to Carvana. Unlike Car24, CarTrade is focused on the Indian market, with operations across 300 cities. The company offers its services outside India through the franchise model. With a database of over 500,000 cars, CarTrade is rising quickly on Carvana’s competitors’ list. [13]
12. TrueCar
Year founded: 2009
Headquarter: Navi Mumbai, India
TrueCar is an online marketplace for used and new cars. The platform features a robust search function that allows users to find hundreds of car listings in their city or town. With around $40 million in annual revenue, TrueCar is still far behind Carvana.
TrueCar does not allow users to post their own listing. But the company has over 14,000 partner dealers who offer a wide variety of car brands and models. This model ensures dealers compete for customers.
So, buyers can find their preferred car on TrueCar at a lower price than Carvana. TrueCar is one of the best Carvana alternatives for on-budget car buyers. [14]
13. eBay Motors
Year founded: 1995
Headquarter: San Jose, CA
eBay is one of the oldest online shopping sites and operates in over 30 countries. The platform includes the eBay Motors section for buying and selling new and used vehicles. Users can also buy parts to fix or maintain their cars. eBay’s annual revenue increased from $8.6 billion in 2019 to $10 billion in 2020.
eBay users can find cars, motorcycles, trucks, and other vehicles. Most cars on this marketplace are offered through auction-style listings, but some options have a fixed price.
The platform allows potential buyers to search for their preferred vehicle by type, model, sales event, or item category. eBay is the most experienced Carvana competitor. [15]
14. CarsDirect
Year founded: 1998
Headquarter: El Segundo, CA
CarsDirect is an online automotive research portal and car buying service. Users can research and compare the prices of new and used cars listed on the platform. The site connects potential buyers in the US with hundreds of dealerships nationwide.
Since its founding, CarsDirect has helped over one million customers secure auto financing. But the company pairs potential buyers with lenders instead of providing direct auto financing like Carvana. It also offers leasing and refinancing.
As one of the oldest car buying platforms, CarsDirect has enough experience to challenge Carvana’s dominance. [16]
15. CarSoup
Year founded: 2000
Headquarter: WA
CarSoup offers a website and app for individual sellers and dealerships to list their cars, trucks, motorcycles, and boats. The platform provides new and used vehicles and connects buyers to local sellers using robust referral tools.
CarSoup has two plans with different search functions. The premium version offers comprehensive vehicle history reports and multiple filters, making it easier for buyers to find their dream car.
Both plans allow buyers to browse local listings and compare vehicle prices. CarSoup’s flexibility and ease of use increase its competitive edge over Carvana. [17]
References & more information
- McElroy, N. G. (2021, Jun 2). How did Carvana make it onto the Fortune 500? Unconventional values—and car vending machines. Fortune
- Stella, R. (2021, May 12). Carvana sells used cars online, so you can skip the dealership and have the car delivered right to your door. Business Insider
- Ryan, P. (2021, May 6). Carvana vs. CarGurus: Which Online Auto Retailer is a Better Buy? Stock News
- Parkman, K. (2021). Carvana vs. Vroom vs. CarMax. Consumer Affairs
- Jones, J. (2021, Mar 31). Vroom vs. Carvana vs. CarMax: Which Online Car-Buying Site Is Right for You? Lending Tree
- Vink, R. (2021, Nov 26). Auto1 Group: The European Carvana has a Compelling Narrative. Seeking Alpha
- Miner, D. (2021, Nov 10). ACV Auctions posts its 3Q earnings today. Business Journal
- Prabhu, B. (2021, Jan 11). Cars24 doubles revenue in FY20 cuts losses. AIM Group
- Schlosser, K. (2021, Nov 9). Ditch the dealership: TRED raises $25M to drive more car shoppers to its online marketplace. Geek Wire
- Hall, L. (2021, Oct 18). Cazoo to Expand its Offering into Commercial Vehicles. Business Wire
- com Inc. (2021, Jun 28). The New and Improved Cars.com is Here. PR News
- Autotrader (2021, Feb 10). Autotrader Announces Best New Cars for 2021. PR News
- Bhalla, K. (2021, Oct 26). Loss-making Cars24 is worth more than a profitable CarTrade — here’s why. Business Insider
- Jones, T. (2020, Dec 21). TrueCar Reviews: Used Cars for Sale & Values. Money Beagle
- Coppola, D. (2021, Jul 7). eBay: annual net revenue 2013-2020. Statista
- Motor1 Team (2021, Oct). Should You Get an Auto Loan Through CarsDirect? Motor1.com
- CA Team (2021, Mar 23). About CarSoup. Consumer Affairs
- Featured Image by why kei
Tell us what you think? Did you find this article interesting? Share your thoughts and experiences in the comments section below.
Kevin Johnson
Add comment