Why Carvana wants to buy your car (and why it could be worth keeping it for now)

You may have recently received an email from Carvana that was extremely telling when combined with a little tariff context. The subject of the email: “We want YOUR car!”

Here’s why Carvana may want to buy your car and why tariffs are making used cars a hot commodity.

Carvana is gearing up for tariff market shift

Very few automotive businesses are immune to the impact of tariffs. Even used car sellers will experience changes in the market as automakers and consumers attempt to find their footing. The Trump Administration has issued serious auto tariffs leaving some automakers and car dealers scrambling.

According to Yahoo Finance, Carvana (NYSE: CVNA) nose dived by a whopping 19.8% “in the morning session after President Donald Trump announced reciprocal tariffs on all US imports, set at a minimum rate of 10%”. Carvana is “primed to meet used-vehicle supply and demand shifts — including those arising from tariffs”, reported Automotive News in April, implying that the company is shifting strategy to adapt to auto tariffs.

So, why is Carvana advertising their car buying services to consumers via email and how does car buying fit into their tariff strategy?

How does Carvana make money?

Carvana sells used cars via its online platform for a profit. It sources its inventory of used cars from various channels, including average Americans looking to sell their vehicles. So, if you want to offload your used vehicle for some quick cash, Carvana may be the answer. Just know, the platform fully intends of profiting from the eventual sale of your vehicle, so the offer you receive is contingent on the company selling it for a higher price. See Carvana’s differentiated business model (presented for investors) here.

The company has become very successful boasting a market cap of $34.54 billion dollars as per Yahoo Finance. So, it’s extremely efficient at assessing the fair market value of used cars and selling them for a profit. Companies like CarMax and Carvana are effectively transforming the way Americans buy cars, circumventing the traditional dealership experience.

Why does Carvana want your used car now?

CarMax is boosting its inventory of newer pre-owned vehicles to capitalize on the evolving used car market. Tariffs could cause skyrocketing demand for used cars as new cars become more expensive to buy. Carvana regularly buys used cars, but it’s crucial for the company to bolster its inventory if the company anticipates a demand increase like CarMax.

So, the question is, should you sell your used car now? The answer is dependent on what Carvana offers you relative to your vehicle’s fair market value. If you’re curious about your vehicle’s fair market value, Kelley Blue Book has a Car Values section that can give you a solid estimate.

Keep in mind that the greater the demand for used vehicles, the more sellers can drive up prices. So, your used vehicle could actually be worth more in the used car market in months to come based on the impact of tariffs on the new car market.

Things to consider before selling your car to Carvana

CarEdge, a car shopping and research website started by a father-son duo, recommend selling to a private party, which could get you more money for your used car. This means selling directly to a buyer without a third-party middleman like a dealer or business involved. This would include detailing, servicing and cleaning your car, which are also part of U.S. News & World Report’s recommendations.

In their video on selling your vehicle online, Ray and Zach Shefska state that Carvana is for folks looking to make the transaction “as convenient as possible,” which could save you some time and money by not having to do much to the vehicle beforehand.

Ultimately, Carvana, CarMax, and similar reputable platforms are fine alternatives to private party sales, if you’re able to get a fair deal for your used car. The best way to get an offer you’re happy with is through market research.

This article originally appeared on USA TODAY: Why Carvana wants your used car and is it worth selling now?