Editorial: The Truth About CarMax

Mike Solowiow
by Mike Solowiow

CarMax prides itself on creating a dealership experience unlike any other. Well, now that Saturn is going Tango Uniform. CarMax emphasizes no haggle pricing, easy financing, and a process that involves only one person. No more having your salesperson go back and forth between you and “Bubba” (or “Cowboy” if you are Dodge). You’re greeted warmly, shown any car you like, and guided through a completely transparent transaction, with nothing hidden. That’s the theory. How does it hold up in practice? In true TTAC tradition, I offer a personal critique of one of our biggest sponsors.

My first CarMax transaction occurred before my prose ever graced the pages of TTAC. After buying a Ford F-150 I didn’t need, I decided to celebrate two years cancer-free and 40 lbs. of weight loss by purchasing a sports car I could drive on the weekends.

After wandering through the four-square, fishbowl wilderness, I pulled into my local CarMax. A salesperson immediately guided me to a computer to search the dealer’s nationwide inventory. I’d already settled on a Porsche Boxster S. They located a bright red model in Houston. For a modest $250, they’d transfer the Porker to my 10-20.

Inexpensive relocation is CarMax’s trump card. However, there’s a string attached. When the car shows up, if it’s not to your liking, you can walk away. But your up-front transfer fee payment is toast. To forestall this possibility, CarMax provides an electronic “walk around.” Customers submit questions about the vehicle of their choice to a representative at the relevant dealership. Within a short time, the answers are transmitted back

Like with any computerized solution, there’s a large element of garbage in, garbage out. The remote CarMax rep will answer all your questions, but you’re still talking to a car salesman. A question on how the wear of the driver’s seat returned “normal wear, some wrinkles, looks great! Ready for purchase!” The more specific your questions, the better information you receive.

Once you decide to purchase said vehicle, financing is a simple process. You plug in your vital information on a computer, wait fifteen minutes, and choose which bank loan fits your needs best. Easy. No dealing with an F & I guy breathing down your neck. No fancy calculations, hidden fees or emotional games.

Next: your trade-in appraisal. The sales rep plugs-in the salient facts about your gem/turd into the same computer. While you wait with your salesperson, going over warranty information and other plugs for add-ons (yes there is still that), CarMax’ trade-in expert gives it the once-over.

CarMax describes their trade-in prices as fair, and many times they are. However, top dollar is not yours for the taking.

My Ford F-150 was valued at $14,000 at the Ford dealership, and $15,500 at CarMax. Seems reasonable—until you realize Ford completely low-balled the offer with the full expectation of giving more on the trade to sweeten the deal.

Cars above 100K miles are given paltry values, as CarMax doesn’t sell high mileage vehicles; restricting their income to auction values (where 100K-mile cars are almost worthless).

To my mind, CarMax’s non-negotiation policy is the mega-dealer’s biggest flaw. While it’s great for people inexperienced, wary or anxious at the prospect of haggling, the lack of any sort of negotiation proves troublesome for experienced buyers, especially when they realize they’re going to pay more for a vehicle than they would at a “traditional” dealership.

CarMax justifies their higher prices with a simple guarantee: the vehicle they’re selling you has never been in a frame damaging accident, flooded, or experienced any other incident that would make it an “undesirable.” CarMax has so much faith in the quality of their vehicle selection that all of their vehicles are available with an extended warranty.

To be fair, I’ve found that nearly every car that I’ve inspected on a CarMax lot looks clean and tidy. More often than not, it’s in much better condition than an equivalent vehicle waiting for unsuspecting punters across the street at Super Bob’s Auto Liquidators. WYSIWYG.

For example, I’ve been trying to find a steed to take to Europe. I tried to buy a Dodge Challenger SRT-8. The Dodge Boys changed the numbers overnight. I then attempted to buy a brand new Audi A3 DSG from a franchised store. Audi’s finance company wouldn’t approve it for export. Whilst wrangling with Audi, I looked across at a CarMax lot and spotted a 2004 Pontiac GTO.

Clean as a whistle. Burbled like a dream. Did I pay more than I could have? Yes, I did. Did I get an exceptionally clean car and a decent offer on my trade? Yes, I did.

CarMax provides a welcome departure from the high pressure, cloak and dagger methods of a “normal” dealership. They charge a premium for the lack of aggro and peace of mind. For me and for hundreds of thousands of customers, it’s worth it.

Mike Solowiow
Mike Solowiow

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  • Lori834 Lori834 on Sep 25, 2014

    Bought a 2014 Jeep Grande CHerokee from CarMax in Calgary. As soon as they dropped it off when I got in, the engine light and oil pressure is low sign was on. I messaged the car salesman and he tell me that the sensor just needs to be reset as an oil change was just done. I took it to the dealer afterwards and it actually needed all new sensor parts and oil pressure parts. I was out a vehicle for a week due to this. When I had asked about this my messages were ignored. The service is horrible and there was not support there at all. No voicemail for the owner, finance and salespeople. I was treated like I was causing the trouble. There is also a recall in the vehicle due to sun visor wiring. In which, I was not told by CarMax. They do not take these vehicles to the dealer to get a proper diagnostic testing done. This will be my last vehicle from CarMax. I also left something in my older trade in jeep and they did not follow up with me as to whether they found it and took no initiative in finding it for me. WORST business and customer service ever!!!

  • Carbuyer Carbuyer on Mar 21, 2016

    It's a shame to see so many negative reviews about this place. I've purchased my last 7 cars from Carmax all over Florida (I drive ALOT for my business and get a new(used) car frequently.Carmax has always been honest and straight forward with me. Yes some cars have problems, but you can find these same problems at any dealer. I've always gotten a loaner if something happened within 30 days and my extended warranty covered me for the rest of my loan. For the ones complaining about Carmax not taking the 600k plus cars they sell per year to the "manufacturer" aka dealership, for a "proper" inspection... Think about how ridiculous that sounds. If another business came to me and asked me to evaluate the same product I sell so that they could sell it better than me.... I'll let you fill in the rest. In my experience, the price looks higher, but go to a traditional dealership to get the "lower" price and you'll walk out with the same price as Carmax at best, usually you pay more. Trust me, they know how to get people in the door then screw them sideways .... It's what they do. And BTW where do you think other dealers get their used cars? Assuming that America trades in cars in such good condition is foolish. Rental companies are required to mantain their cars to higher standards than Joe Shmoe can. Same goes for lease companies. So what if it was a rental or owned by a business, knowing it's not been in a major accident, doesn't have flood damage and is still covered by warranty is enough for me. The end.

  • Teddyc73 As I asked earlier under another article, when did "segment" or "class" become "space"? Does using that term make one feel more sophisticated? If GM's products in other segments...I mean "space" is more profitable then sedans then why shouldn't they discontinue it.
  • Robert Absolutely!!! I hate SUV's , I like the better gas milage and better ride and better handling!! Can't take a SUV 55mph into a highway exit ramp! I can in my Malibu and there's more than enough room for 5 and trunk is plenty big enough for me!
  • Teddyc73 Since when did automakers or car companies become "OEM". Probably about the same time "segment" or "class" became "space". I wish there were more sedans. I would like an American sedan. However, as others have stated, if they don't sell in large enough quantities to be profitable the automakers...I mean, "OEMs" aren't going to build them. It's simple business.
  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.