LAS VEGAS — Carvana’s ambitious goal of selling 3 million retail vehicles annually by 2035 depends on a key ingredient: a captive finance arm that helps generate 85 percent of total sales.

The share of new- and used-vehicle sales that are financed in-househas remained stable for a few years, and likely will inch even higher as the company continues to improve the process, said Matt Dundas, the company’s vice president of finance.

“It’s been years of hard work” to make the experience “smoother” for customers and offer more competitive financing terms, Dundas said in October at the Auto Finance Summit in Las Vegas.

Carvana’s captive financing could serve as a possible model for other dealerships seeking to make their finance and insurance processes more efficient and less intimidating. The approach gives customers a financing option that iseasy to use and provides quick approvals in a time of high interest rates and escalating prices for both new and used vehicles.

Carvana’s auto finance arm’s impact on sales

Carvana’s high usage rate stands apart in the industry. Nearly 45 percent of rival CarMax’s total sales for the 2026 fiscal year came from CarMax Auto Finance deals, that company said. And Lithia Motors Inc.’s captive finance arm, Driveway Finance Corp., handled close to 20 percent of its U.S. new- and used-vehicle sales in the second quarter, the retailer said.

“If your financing is easier, obviously that’s going to correlate with higher penetration,” said Jeff Lick, an analyst at Stephens Inc. who follows Carvana.

Carvana’s auto finance performance is important to the online used-vehicle retailer, which is scheduled to report its third-quarter financial results Oct. 28. Total vehicle sales rose 38 percent in the second quarter, and year-over-year growth could surpass 40 percent in the third quarter, J.P. Morgan analyst Rajat Gupta said in an Oct. 2 investor note.

Carvana retailed just under 600,000 vehicles in 2025, and analysts view its acquisition of seven Chrysler-Dodge-Jeep-Ram dealerships since February 2025 as a growth engine.

While Carvana does not break out new-vehicle sales from used, the 85 percent financing figure includes both, a companyspokesperson said.

Financing platform offers ease of use, transparency

Carvana designed its financing to be easy to use and transparent. Customers can see their personalized terms upfront and find a vehicle that fits their budget from within the company’s platform.

Customers can get prequalified for financing in two minutes. Once approved, they can shop for thousands of vehicles based on monthly payment and down payment.

Customers can see exact terms for each vehicle and adjust proposed down payments to find what works for their budget.

Carvana also added an online cosigner program in 2022 to ease affordability concerns, Dundas said. Customers can have a parent, family member or other individual share joint responsibility for the car loan, and Carvana’s platform allows buyers to see financing terms with and without a cosigner within seconds of applying.

Carvana’s financing stands out in the marketplace because it handles the initial loan directly, rather than using outside lenders as many dealerships do, Lick said.

To consumers, Carvana is the initial creditor. Once the loan is finalized, the company uses Bridgecrest Credit Co. as a third-party loan servicer to manage payments, credit reporting, refinancing and payoffs. Bridgecrest is part of DriveTime, from which Carvana was spun off.

Carvana’s success comes from an application process that treats its customers more gently than they might get in a traditional car-buying experience, even when they have an accident or other red flags on their credit reports, Lick said.

“With Carvana, it’s simple: Put your data in and you’re going to get an offer,” Lick said. “You might not like it. It’s the same offer you’re going to get [from a dealer], but it just comes across as more respectful, seamless and a lot more efficient.”

Carvana’s auto financing is a crucial tool as it vies to sell 3 million vehicles a year, Lick said.

“The reason they’re going to get there is because they’ve developed a smoother system. They control the buying of the car. They control the reconditioning of the car. They control financing,” Lick said. “They’ve created a complete, internal, self-controlled system.”

Staff reporter John Huetter contributed to this report.