Carvana is known for giving you "terms" for every car on their website with just a soft credit pull. I did this process a few times. Before even taking this step, I did an online live chat and called in. I very clearly explained that I was self-employed and asked them how they handled income verification for self-employed people.
They told me they use either three months of bank statements OR the prior year's tax returns. In my case, I had both, so I didn't worry.
I kicked off the process of purchasing a 2015 Acura MDX. I sent in my tax return as was requested, and was then asked to send in three months worth of bank statements.
I provided three months of business and personal bank statements and was then told that my income wasn't high enough to be approved through financing thru Carvana.
Which is absolute BS. I have consistently grossed over $60k since working for myself.
The most recent time I re-applied (because my income was higher this past month), I was told by an agent that they could only verify that I make $14,000 in a year and had to finance me based on that. Of course, this made the down payments on every single vehicle on the website unreasonably high. So high that it just wouldn't make sense to finance them. I could get a cash car for that amount.
Also, the second time I applied, I was told that 35% of whatever income they verify for self-employed people is shaved off for business expenses. Which is bogus. In my case, I am a web developer. My only overhead is the internet. Not to mention, they only mentioned this when denying me for the second time. I had never heard this from them before, despite having initiated financing applications twice in the past (the first being last summer, but I canceled the process in order to clean some things up on my credit).
Bait and switch with car dealerships is nothing new. The sad part is Carvana champions itself as the anti-car dealer. I even used to joke with their agents about wanting to be on a Carvana commercial one day.
Suffice it to say, there's no magic solution to getting a car. Particularly when financing. Carvana is no different than a brick and mortar dealership. The shady dealings are all the same. The only difference is Carvana does it all online.
Bottom Line: No, I would not recommend this to a friend
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Company Response from Carvana
Thank you Juston for taking the time to provide a thorough review of your experience using Carvana. Please know that at Carvana, we are trying to change the car buying experience to make it a positive process and we sincerely apologize that this was not the experience you received. After reviewing your account, all Underwriting policies and procedures were followed correctly.
Our customers do have the option to use third party financing for our vehicles if they would like a more comfortable range. We do still hope you are able to find that perfect vehicle, even if it is not from Carvana. If there is anything we can assist you with in the future or if you are interested in giving us another chance, please reach out to us at 800-333-4554.