What Insurance Do You Need When Buying Through Carvana?

Last Updated on September 11, 2020

Carvana has changed how consumers view the car buying experience.

insurance needed with carvanaInstead of spending a day browsing local sales lots and dealing with pushy sales personnel, Carvana lets you shop online and delivers a vehicle right to your door. You also have an interactive 360-degree tour of each car so that you can thoroughly inspect it, and there is data, reviews, and a link to the free CarFax report.

While you cannot test drive the vehicle, you can easily buy your next car without leaving your home and do so all at your convenience – even in the middle of the night.

To finalize the purchase, however, Carvana does require that you have insurance before your vehicle arrives, but not at the time you buy online.

What insurance do you need for Carvana? What are Carvana’s insurance requirements? Do you need insurance coverage before purchasing through Carvana? Continue reading below to learn everything you need to know about Carvana insurance.

What Minimum Insurance Do You Need for Carvana?

Carvana requires that you have proof of insurance when their third party delivery service shows up with your vehicle. You must have a printed card or verification on your smartphone.

The minimum insurance required for Carvana depends on your financing.

  • If you finance through Carvana directly – Carvana requires full coverage insurance, which means comprehensive and collision that covers up to the market value of the vehicle.
  • If you finance outside Carvana – If you do not use Carvana’s financing, then you must contact the third party you financed through, such as your bank or another financing agency, and ask for their minimum requirements. Most banks will also require comprehensive and collision that covers up to the value of the vehicle at the time of purchase.
  • If you pay for your vehicle in cash – Carvana still requires proof of insurance even if you paid for the car outright. You must have the state’s minimum liability coverage where you are registering the vehicle. You can click here to view our list of minimum liability coverages by state, but you should still verify with your local department of motor vehicles what the minimums are.

Do You Have to Use GAP Coverage from Carvana?

GAP coverage is an option you get any time you buy a vehicle. Carvana does offer GAP, but only to those in 14 states; therefore, if you are out of those 14 states, you will need GAP through your insurer or a third party. You are not required to purchase the GAP coverage from Carvana.

Not every insurance company offers GAP coverage. Here is our list of the top 5 companies to buy GAP insurance from:

  1. Progressive
  2. Allstate
  3. American Family
  4. Amica
  5. Nationwide

What is CarvanaCare?

CarvanaCare is not an insurance program, but the company’s extended warranty program. Carvana deals used vehicles; therefore, they offer an extended warranty in case your car breaks down and gives you extra peace of mind.

According to the company, you can cancel your CarvanaCare at any time, they have flexible options for repairs, and the deductible is approximately $50 per visit.

While the website boasts about positive reviews from customers, there are a substantial number of complaints and bad experiences online regarding this warranty program. Including issues with third-party inspectors required by CarvanaCare and denied claims for repairs that should be covered through the warranty program.

Alternatively, there are positive reviews outside of the Carvana website regarding their warranty program. So, like most consumer reviews, you should take them with a grain of salt.

How Hard is it to Insure a Vehicle Purchased from Carvana?

If you are buying from Carvana, you will need to contact the auto insurance company you have now and let them know you have purchased a new car. Get all of the details regarding the vehicle, including make, model, mileage, and the accident report. Your insurer will want to know the financed amount as well, which helps them ensure you get adequate coverage.

Carvana does not sell vehicles that were in accidents, which is one reason their service is unique. Therefore, you do not have to worry about added insurance costs for salvaged vehicles or past accidents.

Whether you buy from Carvana or not, other factors play a role in determining your premium, such as your age, driving history, how long you have been with your insurance company, credit score, and other discounts you may have (i.e., combining homeowners and auto into one).

Final Word – Carvana Insurance

Insuring a car you have purchased through Carvana is the same as if you bought a vehicle from a local lot. However, as with anything you buy online, you should perform due diligence, and remember that you are purchasing a used vehicle that you cannot drive or inspect before purchase.

When your Carvana vehicle arrives, you will need to show the delivery specialist proof of insurance. This can be in the form of an insurance card or through your insurance carrier’s smartphone app.

If you are financing your vehicle through Carvana, you are required to purchase full coverage auto insurance. If you are financing your vehicle through a third party, you will need to meet their insurance requirements. If you are paying for your vehicle in full (cash), you will just need proof of the minimum liability coverage in your state.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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