CarMax On Used-Car Buying Spree As Market Madness Continues

With used-car prices soaring, retailer CarMax has been busy swooping up used vehicles to flip for sale.

That could be a solid strategy since the chip shortage has left new-car dealers bereft of vehicles on the lot.

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Where Your Author Investigates Some Online Car Buying Services

Given the constant hassles of Volkswagen Golf ownership lately, and how every media outlet is shouting “Highest Used Car Pricing Ever” as loudly as possible, I’ve been pondering selling the Golf to a dealer. No Facebook idiots, no trade-in for something else, just a sale.

Here in The Current Year, there are many companies that purport to give you both the best deal possible and make the car selling process seamless. I found out this week what five such companies are like in the early stages.

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CarMax Invites Customers to 'Do Donuts'

CarMax has invited customers to ‘do donuts’ during their test drives, a promotion with Dunkin’ Donuts. For shoppers who take part in CarMax’s 24-hour test drives today through May 16th, they’ll receive a $10 Dunkin’ Donuts gift card.

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CarMax Acquires Edmunds in $400 Million Deal

Yesterday, 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.

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Automotive Retail Jobs Are In Rough Shape

Having already pulverized the dead horse of waning auto sales into a fine paste, we’ll now turn our focus on how it’s impacting employment among automotive retailers — squashing another pony.

Much of the information up until this point has been anecdotal and conditional to the North American response to COVID-19. Furloughs were rampant as the pandemic progressed and new safety rules seemed poised to cripple sales moving forward. There was an obvious general plight confronting automotive retailers, but we couldn’t nail down what that meant in terms of job losses.

We still don’t, frankly. But it is starting to become obvious that there isn’t much reason to be exceptionally optimistic. AutoNation recently announced that around half of the 7,000 workers it furloughed in April won’t be coming back. Despite some retailers claiming not to need such drastic cuts, plenty are following AutoNation’s model. With fewer customers and sweeping restrictions on how showrooms can be operated, there’s little reason for there to be all hands on deck. But just how many will be forced to abandon ship this year?

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A Quarter of the Vehicles Sold Through CarMax Had Unresolved Safety Issues, Study Claims

Over 25 percent of the used vehicles sold through eight CarMax locations in the United States had recall defects that were not addressed, according to a recent safety report.

The 2017 study, conducted by the Center For Auto Safety, the Consumers for Auto Reliability and Safety Foundation and the MASSPIRG Education Fund, noted that vehicles with unresolved safety recalls had more than doubled since 2015 at the five locations surveyed in both years. That is worthy of a raised eyebrow or two.

Questions remain, however. While the review cites numerous locations selling vehicles with what many would consider unacceptable issues, we don’t definitively know if this is indicative of CarMax as a whole. But lets face it, there were 64 million vehicles recalled for safety problems last year — exceeding the total for the previous three years combined.

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One Man's Dismal Vision of a Future Without the Family-owned Dealership

Car dealerships are an American institution. Often controlled by a patriarch with an unusual amount of sway in the local community (and their sometimes cosseted children), dealer franchises dot the country’s landscape like moles on a back. Isolated near exit ramps, they serve as gleaming beacons of civilization as you traverse through long expanses of wilderness on a road trip.

North America wouldn’t be the same without them but, according to one automotive regent, irreparable change is coming to the dealer networks we’ve become begrudgingly accustomed to. Bill McDaniels, president of McDaniels Automotive Group, runs a half-dozen stores selling selling Acura, Audi, Porsche, Subaru, and Volkswagen-branded vehicles in South Carolina. He’s one of those automotive viceroys mentioned earlier, right down to having his son as the chief operating officer for his business, and he’s convinced the era of family-owned dealerships is almost over.

Is this one man’s paranoid delusion or an astute observation of industrywide trends?

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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.

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CA Court Rules CarMax Inspection Checklist Isn't What You Think It Is

When is a completed inspection report not a completed inspection report? When it’s issued by CarMax, a California appeals court has ruled.

The court found the country’s largest used vehicle retailer in violation of a state law requiring detailed inspection checklists for certified used vehicles, Automotive News reports. The ruling, which stems from a lawsuit filed by a customer who claimed CarMax sold him a “certified” lemon, shines light on the retailer’s dodgy vehicle inspection practices.

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Piston Slap: Branded Title = Scarlet Letter?

Darrick writes:

Hey Sajeev,

First of all, I want to say that I enjoy your articles and your love of Panther and Fox body Fords. (Woot! —SM)

I’m writing to you about my 2005 Ford Focus SE ZX4 in the hope that you may give me some guidance.

I moved to the east coast (southeastern Virginia) from the Midwest in 2008. A year later, I received a brutal lesson in what coastal flooding can do to a neighborhood and when said flooding finds its way into a vehicle. My Focus sustained $3,500 in damages, and nearly all that amount was due to airbag and seatbelt system damage. I had insurance, so I was only out of my $100 deductible, but the damage cost was such that I now have a branded title due to flood damage.

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Steven Lang And Doug DeMuro Debate Carmax

Earlier this week I wrote about how CarMax is heavily constrained by a market that has flip-flopped between six years worth of heavy car sales and about 18 months of resurgent truck and SUV demand. Long story short, CarMax’s acquisition costs for trucks, SUVs and crossovers has gone up considerably, and the supply of this inventory has cratered due to new car dealers keeping the bulk of this inventory for themselves.

Not everybody liked what I wrote. Case in point.

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TTAC News Round-up: Full-size GM SUVs Making People Sick, 2016 Sales Look Flat, and Millennials Are Buying Everything Now

If you see this Cadillac a-rockin’, you should submit a complaint to the National Highway Traffic Safety Administration.

That, and depressed 2016 sales outlooks, the Federal Reserve rate hike, a Chinese electric vehicle Warrior and CarMax, after the jump.

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FCA Dealers Can't Sell Used Cars Without Recall Repairs

Fiat Chrysler Automobile dealers won’t be able to sell cars without recall repair work or they risk losing their incentive money under a new agreement with the federal government, Automotive News is reporting.

The agreement was part of the sweeping package penalties imposed by the National Highway Traffic Safety Administration, including up to $105 million in fines. According to the consent agreement by the federal bureau and FCA, the company already asks dealers to complete recall work, but the new mandate would reinforce that existing policy.

In the United States, it’s illegal for a dealer to sell a new car without recall repair work, but no such law exists for used cars. A recent proposal in Congress to force used car dealers to complete open recall repair work was met with opposition.

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Reedy: CarMax Lending Arm Won't Fully Play In Subprime Market

Though CarMax’s lending arm will press forward with its subprime lending test program, it won’t be a major player in the subprime game.

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Piston Slap: The Importance of A Craigslist 3-Ring Binder

TTAC commentator dtremit writes:

Hey Sajeev —

Inspired by your recent Mazda3 Piston Slap, I thought I’d throw this question your way. Seems like something the B&B might have advice on.

I have a 2005 Mazda6 that is a rather desirable used car…on paper. It is in excellent condition mechanically, and has fairly low miles for its age (about 78k). Single owner, and I have maintained it well, though I am not sure the mess of receipts in the glovebox counts as excellent documentation. I have a good set of Nokian snow tires for it on steel wheels, which would go along with it. It would make a good car for someone for quite some time to come.

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