Trading Up? Can You Sell Your Financed Car to Carvana?
You’re eyeing that shiny new ride, the one with all the bells and whistles. But there’s one little snag: you still owe money on your current car loan. Can you sell it to Carvana, the online car-buying behemoth, even though it’s financed? The short answer is yes, but there are some things you need to know first. 
Understanding Your Loan
Before diving into the world of selling a financed car, it’s crucial to understand your loan agreement. Key details to review include:
* Payoff Amount: This is the exact amount you owe on your loan at any given time. You can usually find this information on your monthly statement or by contacting your lender.
* Prepayment Penalties: Some lenders charge a fee if you pay off your loan early. Check your agreement for these potential charges, as they could impact the overall profitability of selling to Carvana.
How Selling a Financed Car to Carvana Works
Carvana offers a convenient way to sell your car online. The process is largely similar to selling a car outright, with an added step:
1. Get Your Offer: Start by visiting Carvana’s website and inputting your vehicle details (make, model, year, mileage). You’ll receive an instant online offer based on the information you provide.
2. Schedule Pickup: If you accept the offer, Carvana will schedule a pickup time at your convenience. A Carvana representative will inspect your vehicle to confirm its condition.
3. Payoff and Title Transfer: Once the inspection is complete, Carvana will handle paying off your existing loan directly to your lender. They’ll then transfer the title into their name, effectively becoming the new owner of your vehicle.
Pros and Cons of Selling a Financed Car to Carvana
Selling a financed car through Carvana offers several advantages:
* Convenience: The entire process happens online, eliminating the need for dealership visits and haggling.
* Quick Sale: Carvana typically processes transactions swiftly, often completing the sale within days.
* Transparency: You receive a clear offer upfront, knowing exactly what to expect financially.
However, there are also some potential drawbacks:
* Potentially Lower Offer: Since Carvana needs to factor in the loan payoff amount and any potential prepayment penalties, your final offer might be lower compared to selling privately.
* Limited Negotiation: While you can decline the initial offer, there’s limited room for negotiation with Carvana’s automated system.
Alternatives to Consider
If you’re looking to maximize your return on selling a financed car, consider these alternatives:
* Selling Privately: Listing your car privately allows you to set your own price and potentially negotiate a higher sale amount. However, it requires more effort and time, including advertising, handling inquiries, and managing test drives.
* Trading In at a Dealership: When purchasing a new car, dealerships often accept trade-ins. This option can simplify the process, but they may offer lower trade-in values compared to selling privately or through Carvana.
Making the Right Decision
Ultimately, the best way to decide if selling your financed car to Carvana is right for you depends on your individual circumstances and priorities. Consider factors like:
* Time constraints: If speed and convenience are crucial, Carvana might be a good fit.
* Desired sale price: If maximizing profit is your goal, exploring private sales or trade-ins may yield better results.
Important Reminders
* Always double-check the payoff amount with your lender before accepting any offer from Carvana.
* Review your loan agreement carefully for potential prepayment penalties.
* Compare Carvana’s offer to other options, such as private sales and dealership trade-ins, to make an informed decision.