By on April 2, 2021

CarMax DealerYesterday, used-car giant CarMax announced it finalized a deal to acquire automotive consumer advice site Edmunds, in a deal worth just over $400 million.

CarMax promises it’s magnanimous, and that Edmunds and its advice will operate independently of CarMax and its sales.

CarMax first showed interest in Edmunds in January of 2020, when it handed over $50 million to acquire a minority ownership stake. Once the check cleared, CarMax and Edmunds worked jointly on a number of new projects, which included the successful instant offer tool on Edmunds. That’s the button sellers use to sell their car to CarMax for Cash Right Now. CarMax credits that instant offer button with placing CarMax in place to become the largest online buyer of used cars from consumers.

They’re so pleased with collaborations thus far that CarMax is shelling out the remaining $354 million to purchase the 50-year-old Edmunds. The purchase will take place via stock buyout and cash. CarMax says they’re excited to invest in Edmunds’ growth and look forward to delivering the highest quality online experience possible. Edmunds says CarMax is a great business partner, and the company looks to provide continual innovation, as well as support their dealer and manufacturer customers.

And don’t worry about the providers of advice and the sellers of the product that’s being advised upon residing under the same ownership umbrella. CarMax ensures that Edmunds will operate independently, and will remain in its consumer-focused advisory capacity, as well as continuing to offer value to the aforementioned dealers and manufacturers. Advice articles like this one that encourage you to use the instant offer button to sell your car directly to CarMax are just a coincidence.

[Image: CarMax]

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23 Comments on “CarMax Acquires Edmunds in $400 Million Deal...”


  • avatar
    ajla

    “CarMax ensures that Edmunds will operate independently, and will remain in its consumer-focused advisory capacity”

    ; )

  • avatar
    3800FAN

    Conflict of interest. Wont be going to edmunds.com anymore. Carmaxs inflated prices are insane. I got my honda certified usss accord from a honda dealer for 4 grand less than what car max wanted for basically the same car.

    • 0 avatar
      28-Cars-Later

      Cox Automotive -who owns Manheim wholesale auctions- purchased Kelly Blue Book some time ago in an extremely obvious conflict of interest. CarMax looking to do the same, and I can tell you KBB was mostly fiction *before* Cox purchased it.

      Oh, and f*** CarMax.

    • 0 avatar
      slavuta

      Exactly! Done with Edmunds. In fact, their site is already much less friendly. If I sell a car – I look at what dealer slaps on it and then reduce by $1000 – here is my price for you. If I buy a car – here what I will pay, take it or see ya

    • 0 avatar
      Garrett

      They probably paid six grand less for the trade in than CarMax would have.

      I’ve actually gotten good deals at CarMax. The key is to buy a vehicle that isn’t a run of the mill vehicle.

    • 0 avatar
      beachy

      Agreed about inflated prices. Seriously looking at used cars, CarMax was consistently 1-2k higher.

  • avatar
    FreedMike

    Ah, yes, the “merger of equals.”

    • 0 avatar

      When you go to the Edmunds website and check out their background, one of their frequently asked questions is who owns Edmunds? And their response is that Edmunds is privately owned and they do not disclose the names of their investors.

      They also extoll the virtues of CarMax in the FAQ.

  • avatar
    C5 is Alive

    Any lingering shreds of credibility Edmunds may have once possessed over that 50-year history got bludgeoned by its blatant and thoroughly unapologetic coverup of the severe mechanical failures that killed its long-term Dart a few years ago.

    Take notes, TTAC. THIS is how you sell out, not “sponsored content” and Amazon shopping lists.

    • 0 avatar
      SCE to AUX

      So you remember that one, too? I was going to mention that.

      I posted some direct questions about that incident there, as did some others. That Dart was mfr supplied, and I believe it ate a spark plug and destroyed the engine. But Edmunds never explained its demise or the disposition of the car. But the concluding report was a glowing whitewash.

      As for CarMax, that was the usual destination for their long-term cars, so no surprise that their bond grows.

      What shocks me: that Edmunds is worth $400 million.

  • avatar
    CKNSLS Sierra SLT

    We all know TTAC forum commentators are not common car owners. To 3800 Fan; Carmax is the number one seller of used cars in the country. They will not miss your business.

  • avatar
    ToolGuy

    Let’s open the TTAC Book of Automotive Dealer Wisdom (it’s old and has many many pages) and apply some logic here.

    CarMax had $0.4 billion to fund this acquisition because they lost money selling cars because car dealers exist only as a convenience for the manufacturers and are essentially run like any other charity.

    [Sounds perfect.]

    https://www.wsj.com/market-data/quotes/KMX/financials/annual/balance-sheet

  • avatar
    Jeff Weimer

    Edmunds stopped being a consumer-oriented site ages ago. I remember their blogs about how to deal with dealers and such, their “true market value” that actually did move prices down, and their accurate new car invoice pricing. I brought their printouts to a dealership and they didn’t fight me at all for the price I wanted, but that was 2001.

    It seems that the dealer groups and such have decided that the “information differential” was getting too far in the buyer’s favor so they straight up bought out the places that helped the buyers and turned them into reseller sites. We now only get the information they want us to see. I think this started about 10 years ago with TrueCar.

  • avatar

    When I came to US someone recommended me Edmunds. I attended their blogs until discovered TTAC somewhere in 2007 or so. TTAC back then was like a breath of fresh air. Now of course when old timers and insiders gone TTAC become like a polemic club between reps and dems.

  • avatar
    shappy

    I worked for Edmunds from ’98 until 2014. Over that time, the company (and their culture) changed dramatically. The previous comments made here are accurate in noting that its priority had shifted from advocating for the consumer to profiting off of dealer services. This conflict of interest has only been reinforced by this acquisition.

  • avatar
    schmitt trigger

    Thanks Shappy, for corroborating our suspicions.

  • avatar
    EX35

    I’ve said it before but just put TTAC out of its misery already. It’s a case study in what happens when you sell out. I also can’t imagine it makes any money. Who even comes here to read reviews of MY2020 cars.

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