Founded in 2012, Carvana is one of the largest online car retailers based in the outskirts of Arizona. Did you know that it was the first company that introduced vending machines for vehicles?
Yes, Carvana has been revolutionizing the automotive industry with its innovative offerings. Also, the company known for its coin-operated vending machine made it to the 2021 Fortune 500 list.
What’s more, Carvana operates in two main industries; the used-car and online vehicle marketplace, which makes it stand out from other local used car retailers.
With over 10,000 employees, the company managed to generate a revenue of a whopping $12,814 million as of 2021.
The best part? Carvana has now introduced a buyer-friendly automobile scheme for buyers who fail to qualify for loans from unions and banks, and the whole process only takes a few minutes to complete.
Also, each car purchased via the company comes with a 100-day guarantee and a 7-day return if the buyer isn’t satisfied with the purchase.
Plus, Carvana also offers pre-qualified loans to anyone who is over the age of 18 years and makes at least $4000/year.
With more than 1 million customers served and counting, Carvana faces stiff competition from other used-car retailers, such as Vroom, CarGurus, etc.
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Top 10 Alternatives and Competitors to Carvana
Albeit Carvana is one of the fast-growing and innovative used-car retailers operating in the US, there are many players in the automotive industry that you might want to consider.
Here’s what you need to know about each of them and what do they have to offer:
Auto1 Group
- Founded: 2012.
- Headquarters: Berlin, Germany.
It is a European-based leading digital platform for selling and buying used cars. Auto1 Group offers a wide range of vehicles in more than 30 countries, even in the US as well.
Did you know that in 2019 alone, the company was able to sell 615,000 vehicles through its apps and websites? On top of that, Auto1 Group welcomed a revenue of € 4.8 billion in 2021.
The company has a competitive edge over other used-car retailers as it keeps updating its inventory on a regular basis to ensure that every customer finds their ideal vehicle.
The best part? Auto1 Group offers a flexible loan scheme and can be tailored to customers’ preferences. Plus, the company operates through local brands (we buy your cars) such as wirkaufedeinauto.de. Hence, Auto1 Group effectively targets local sellers and buyers more than Carvana.
CarMax
- Founded: 1993.
- Headquarters: Richmond, VA.
CarMax is one of the largest used car retailers operating in the US market. It is an automobile dealership that specializes in both new and used cars.
Also, the company, just like Carvana, allows customers to browse listings for both used and new cars at pre-determined prices.
With over 25,000 employees, CarMax sold over 750,000 used vehicles as of February 2021.
The company’s key competitive edge over Carvana is its lower costs. With CarMax’s financing scheme, users can purchase a vehicle for as low as $6,599 and pay only $90 each month. However, there is a probability that car defects are fixed using cosmetic restoration.
The best thing? CarMax also offers a test drive, and customers can even return the acquired vehicle after a period of 30 days, as opposed to Carvana’s 7-day return policy.
Also, the company generated a revenue of $8.5 billion as of the third quarter of 2021.
CarGurus
- Founded: 2006.
- Headquarters: Cambridge, MA.
CarGurus first started as the platform for vehicle reviews but later transformed into a digital platform for both used and new cars.
It is one of the top automotive shopping and research platforms. Also, the company allows potential buyers to compare the local listings of both used and new cars before contacting the sellers.
What’s more, CarGurus has a more dominant position in the online marketplace, coming at 6th rank, while Carvana holds 71st position.
Also, CarGurus generated a revenue of $951.4 million as of 2021, an increase of almost 73%.
It caters to both needs; whether you are looking for a new car or a used car, CarGurus is there to help.
Vroom
- Founded: 2013.
- Headquarters: New York City, NY.
It is an online platform that allows you to sell, trade, and buy used cars. Vroom comes with robust features that further facilitate users’ purchase or sell used vehicles.
The best part? With Vroom, buyers can look for cars by all, including model, year, location, and make. Also, users can view the car’s pictures, pricing information, and specs.
Vroom sold over 74,000 units and generated a revenue of $2,442.4 million as of 2021.
One thing to keep in mind is that listing provided by Vroom doesn’t provide a monthly payment projection. Although both the companies (Vroom and Carvana) offer auto loans, Vroom’s variable pricing approach is far better than Carvana’s.
That’s because Chevrolets and Toyotas are roughly available for $7500 on Vroom. Thus, Vroom is probably the top choice among budget-conscious buyers.
Cars.com
- Founded: 1998.
- Headquarters: Chicago, IL.
It is the automotive industry’s top digital marketplace and solution provider based in Chicago. Did you know that the company’s online platform and mobile app serve over 25 million car sellers and buyers each month?
With 1500 employees, Cars.com generated a revenue of almost $623.7 million in 2021, reporting an increase of 14%.
The platform also provides in-depth information on several models as well as helpful suggestions and tactics for buying used vehicles.
Plus, the company also upgraded its mobile app and online platform, reducing the loading time. The new server offers real-time inventory updates of over 50,000 used vehicles.
Over 20,000 local dealerships, editorial content, and over 10 million reviews are all available on a single platform. With such a huge variety of listings, Cars.com is indeed a top competitor to Carvana.
ACV Auctions
- Founded: 2014.
- Headquarters: Buffalo, New York.
It is one of the largest wholesale automobile buying and selling marketplace for dealers. ACV auction’s digital platform streamlines the wholesaling procedure, including arbitration, purchasing, title management, location, and whatnot.
Also, with over 1100 employees, the company generated a revenue of almost $100.2 million in the fourth quarter of 2021.
The best thing? The company offers a full-service automotive marketplace with unrivaled transparency. Yes, the company conducts a thorough assessment of the vehicle and also notifies potential buyers.
With almost 110,000 units sold each quarter, ACV Auctions is one of the top competitors to Carvana for wholesaling used vehicles.
Cars24
- Founded: 2015.
- Headquarters: Gurugram, India.
It is a used car marketplace that combines both offline and online activities to simplify the process of selling and buying used vehicles.
Cars24 also provides an online auction platform and related services such as documentation for the transfer of automobile ownership.
Today, the company operates a network of 205 branches across 182 cities in India. Also, as of December 2021, Cars24 ARR (annual revenue run rate) was $1 billion, almost 65-70% up from 2020.
The company provides vehicle inspection services and also offers a buyback guarantee on verified vehicles.
What’s more, Cars24 has now expanded into international markets, including Australia and the United Arab Emirates.
TRED
- Founded: 2012.
- Headquarters: Seattle, WA.
It is an online peer-to-peer used car marketplace. The platform’s automation simplifies the whole process of selling and purchasing used vehicles online.
Also, TRED raised around $25 million in funding to drive more car buyers to its digital marketplace.
With over 40 employees, the company has a long way to catch up with Carvana. However, the company gives tough competition to Carvana as it offers fraud protection, auto loans, and vehicle valuations.
What’s more, TRED also allows buyers to test-drive vehicles before purchasing so they know what they are getting in return for their investment.
Plus, TRED has now marked its name in six different markets in the US, including Las Vegas, Chicago, Phoenix, Salt Lake City, Denver, etc. It has the potential and resources to expand its product line and compete with Carvana for market share.
Cazoo
- Founded: 2018.
- Headquarters: London, UK.
It is one of the fastest-growing web platforms in Europe. Within the first two years, the company was able to sell almost 40,000 automobiles online.
With Cazoo, you can receive your car within 72 hours; the credit goes to the company’s efficient workflow.
Also, the company stands out from other car retailers by providing excellent customer service. What’s more, Cazoo also offers a 30-day money-back guarantee on all vehicles.
Cazoo generated revenue of £665 million in FY 2021. Plus, the company acquired Vans365 in order to expand its online product offerings.
The company’s expansion into selling and purchasing commercial automobiles online will be accelerated as a result of the acquisition, giving it a competitive edge over Carvana.
Auto Trader Group
- Founded: 1997,
- Headquarters: Atlanta, GA.
It is a leading digital marketplace for both new and used car sellers and buyers. Also, the marketplace brings together certified pre-owned vehicles for sale from individual sellers and dealers.
With over 800 employees, ATG (Auto Trader Group) for FY 2021 welcomed a revenue of $344 million. The company’s primary competitive edge over Carvana is its authoritative consumer information.
Plus, the online platform provides both shopping recommendations and car reviews. With the help of comparison tools, buyers can locate reliable information on insurance and auto loans.
ATG has expertise in the digital marketplace, giving it an edge against Carvana.
The Takeaway
Without a doubt, Carvana, with its customer-focused approach and innovative product offerings has been dominating the automotive industry in the US. Also, the company forecasts to reach $19.1 billion in online sales by the end of 2022, an increase of almost 50%.
Albeit Carvana is the fastest-growing used car retailer, there are many players in the industry that are worth considering.
Hence, you need to determine what you seek as many companies like TRED, Cars24, etc., offer vehicle inspection and test drives, unlike Carvana.
