It seems only appropriate as CarMax marks 20 years in business that we take a moment to examine the used car super retailer and its impact on the used car industry. Should you buy a used car from CarMax? Maybe these facts, presented in no particular order, will help you decide.
1. The Biggest Used Car Retailer
According to its website, CarMax, Inc. is the nation’s largest retailer of used cars. The company, which pioneered the used car superstore concept, opened its first store in Richmond, Va., in 1993.
One of the advantages of its size is you can have used cars shipped, for a fee, from one location to another cheaper than driving there yourself (say from Texas to New Florida). CarMax currently operates 126 used car superstores in 63 markets. During the 12 months ended February 28, 2013, the company retailed 447,728 used cars and sold 324,779 wholesale vehicles at our in-store auctions.
2. Great Place to Work
In 2013, CarMax was named one of Fortune's “100 Best Companies to Work For” for the ninth consecutive year. People who like working for a company are easier to work for and more likely to give you better customer service.
3. Sells 'Younger' Used Cars
CarMax targets used cars that are one to six years old. You're not going to find clunkers at CarMax and you're not going to find buy-here, pay-here deals either. CarMax competes against the certified pre-owned used cars offered at traditional franchised used car dealers (i.e. new car dealers selling used cars).
4. CarMax Cars Not Certified Pre-Owned
CarMax offers a program called CarMax Quality Certified, which in some respects is similar to a manufacturer's certified pre-owned program but does have its differences.
They're similar in that every CarMax used car undergoes a 125+ point inspection including:
- engine and transmission, plus cooling and fuel systems
- brakes, suspension, steering, and drive axles
- lighting, electrical, heating, and A/C systems
- body and interior, plus all instruments and controls
Where they are different is extended coverage is usually standard with certified pre-owned cars sold by manufacturers' dealers. You have to pay more for a program called MaxCare Extended Service Plan, which CarMax says can be customized to meet your driving habits. It's going to add an extra cost to your used car purchase. Make sure you factor that in when determining the price.
5. CarMax Warranty
At no extra cost, each CarMax used car sold comes with a limited warranty. According to CarMax, "It covers all of your vehicle's important systems, and hundreds of parts inside and out." It's for 30 days in most states, except in Connecticut where it's 60 days and Massachusetts where the warranty stretches out to 90 days. Live near the border of one of those two states? It might be worthwhile driving the extra distance for the extended protection.
6. You Can Return Your Used Car
Say you experience "buyer's remorse" and don't like your used car. At CarMax you can return it, supposedly hassle free, but you better act quickly. The return window is five days. CarMax is smart to offer this policy because it knows few people are going to return a car after five days after going through the hassles of buying it. Buyer remorse usually occurs after a month.
7. CarMax Buys Used Cars
CarMax says it buys any used car regardless of age, condition, make or mileage even if you don't buy a used car from CarMax. Appraisals take about 30 minutes and if you decide to sell, the company will pay you on the spot. Don’t expect to get a great price, though. CarMax wants to make a profit. What you're getting is the convenience of selling your used car quickly.
8. CarMax Auctions Used Cars
But only to registered dealers. All those used cars it buys that aren't one to six years old have to be sold somewhere. CarMax knows the secondary used car market for older used cars is strong. It's a profitable section of its business. It conducts auctions in 25 states on a regular basis.
9. No Haggle Pricing
What you see on the window sticker is what you're going to pay. Maybe you can get a price to come down under certain circumstances but 99% of the time you're going to pay the sticker price. CarMax is pretty straight forward. You get a firm price on your trade-in and a firm price on the car you are purchasing. There's no behind-the-scenes manipulation of the numbers.
10. Flexible Financing
Here's another good thing about CarMax. You get to choose the financing that works for you. The customer sits with a sales representative, punches in the numbers, and then gets to see within a short time frame the financing being offered. It's pretty simple and means no dealing with a finance manager.