Pre-owned Prize Fight: AutoNation Wants to Out-CarMax CarMax

Steph Willems
by Steph Willems
pre owned prize fight autonation wants to out carmax carmax

The used car market? Saturated. The battle? About to begin.

America’s largest new-car retailer knows there’s money in them there pre-owned vehicles and has hatched a half-billion-dollar plan to take on the country’s largest used-car retailer.

According to Automotive News, AutoNation Inc. will greatly expand its retailing footprint by building standalone used-vehicle stores.

The first five stores, one targeting Houston, should be open by the end of 2017. Another 20 are reportedly in the works. By the time the expansion strategy is complete, up to 100 standalone used vehicle stores carrying the AutoNation banner could tap into the massive glut of pre-owned vehicles flooding the country’s car lots.

That’s the physical presence of the retailer’s new plan. At the customer level, no-haggle pricing will extend to all used vehicles sold at AutoNation USA stores and through its franchised dealer network. In addition to the creation of new service centers for each new dealership, renovations are coming for the existing service network. Four new auto auctions will open within the next two years, along with 18 new collision centers.

It’s a big roll-out for a big market.

“It’s a 40 million (units) a year marketplace,” AutoNation CEO Mike Jackson told Automotive News. “The consumer is still dying for a better experience in pre-owned.”

The retailer’s used-vehicle gambit goes beyond cars. As part of the expansion, a line of AutoNation-branded accessories and replacement parts will be made available through the dealerships. The first component — a battery — is already on sale.

Overall, the plan is to beat CarMax at its own game. AutoNation wants to draw owners with out-of-warranty vehicles to its repair shops for scheduled maintenance, while CarMax customers only see their vehicle in the shop if they’ve purchased the MaxCare plan. That service plan allows customers to use independent repair shops, but it comes at a cost — CarMax charges a higher deductible for that work.

Under the new plan, all stores will switch to the AutoNation Express in-store platform, where transactions are expected to take place within an hour. Buyers walk away with two years of free routine maintenance.

For its part, CarMax is fighting back by making the buying experience easier. According to the Charlotte Business Journal, the retailer recently launched a pilot project in Charlotte, North Carolina, that allows customers to select, finance and purchase a vehicle without leaving their home. Test drive vehicles will roll up to would-be buyers’ front doors.

If successful, the retailer could implement the program in other markets.

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2 of 22 comments
  • Art Vandelay Art Vandelay on Oct 30, 2016

    Typically these no haggle used car places have among the highest prices one can pay for a given model. I suppose not playing the game is appealing to some and worth the cost. Honestly I have never gotten some of the crazy low prices some trumpet on here with my bargaining skills, but I have never paid close to a carmax price either.

  • Koreancowboy Koreancowboy on Nov 01, 2016

    Between AutoNation, CarMax, Sonic Automotive, and the like, eventually all new and used cars will be no-haggle. If you really get off on that sort of thing, there's always private-party.

  • Sayahh Is it 1974 or 1794? The article is inconsistent.
  • Laura I just buy a Hyndai Elantra SEL, and My car started to have issues with the AC dont work the air sometimes is really hot and later cold and also I heard a noice in the engine so I went to the dealer for the first service and explain what was hapenning to the AC they told me that the car was getting hot because the vent is not working I didnt know that the car was getting hot because it doesnt show nothing no sign no beep nothing I was surprise and also I notice that it needed engine oil, I think that something is wrong with this car because is a model 23 and I just got it on April only 5 months use. is this normal ? Also my daughter bought the same model and she went for a trip and the car also got hot and it didnt show up in the system she called them and they said to take the car to the dealer for a check up I think that if the cars are new they shouldnt be having this problems.
  • JamesGarfield What charging network does the Polestar use?
  • JamesGarfield Re: Getting away from union plantsAbout a dozen years or so ago, Caterpillar built a huge new engine plant, just down the road here in Seguin TX. Story has it, Caterpillar came to Seguin City council in advance, and told them their plans. Then they asked for no advanced publicity from Seguin, until announcement day. This new plant was gonna be a non-union replacement for a couple of union plants in IL and SC, and Cat didn't want to stir up union problems until the plan was set. They told Seguin, If you about blab this in advance, we'll walk. Well, Seguin kept quiet as instructed, and the plan went through, with all the usual expected tax abatements given.Plant construction began, but the Caterpillar name was conspicuously absent from anywhere on the site. Instead, the plant was described as being a collective of various contractors and suppliers for Caterpillar. Which in fact, it was. Then comes the day, with the big new plant fully operationa!, that Caterpillar comes in and announces, Hey, Yeah it's our plant, and the Caterpillar name boldly goes up on the front. All you contractor folks, welcome aboard, you're now Caterpillar employees. Then, Cat turns and announces they are closing those two union plants immediately, and will be transporting all the heavy manufacturing equipment to Seguin. None of the union workers, just the equipment. And today, the Caterpillar plant sits out there, humming away happily, making engines for the industry and good paying jobs for us. I'd call that a winner.
  • Stuki Moi What Subaru taketh away in costs, dealers will no doubt add right back in adjustments.... Fat chance Subaru will offer a sufficient supply of them.