CarMax Employees Reveal Why the Company May Not Be the Best Choice for Car Selling
Commercials for CarMax have surely have been flooding your television and radio. As a potential used car buyer, you may be considering the various advantages that this car-buying option provides. Buying a vehicle online is obviously accompanied by its fair share of conveniences, eliminating much of the hassle that often accompanies this irritating endeavor. Instead of having to spend hours looking through a car seller’s lot, you can alternatively rely on CarMax’s inventory from the comfort of your own couch.
However, when you start to dive into the specifics of this online business, you’ll quickly learn that it’s better off to rely on a traditional car-buying strategy. CarMax comes with its fair share of disadvantages, including a lack of flexibility and unfair trade-in values. Clearly, we could easily write a long list of reasons why you’d be better off pursuing a used car from a dealership like DePaula Chevrolet.
Instead, we’ve found insight from some former CarMax employees. These individuals have had a unique, unmatched experience with the company, allowing them to provide advice that others might not pick up.
Before you rely on CarMax to deliver an unreliable trade-in value, see what the company is actually scheming behind the scenes:
This comment from Reddit user pmcrumpler originally popped up in a post about CarMax on the site’s personal finance subreddit. The user provides some insight into the company’s car-buying method, and they also reveal some of their cal-selling strategies:
CarMax only guarantees their offer for 7 days – you may have it reappraised and get the same exact number. You might get less. The only thing I can promise is that the offer won’t go up. If it does, they ****** up somewhere along the line, either in the initial appraisal or the second one. Or, you spent money to get something fixed that was affecting its value.
Second, CarMax prices are not based on kbb, blackbook, or any other online car shopping resource. CarMax sets the offer based on a few factors, including
Mileage: CarMax does not retail cars with over 130,000 miles. This means your vehicle will go to wholesale auction, and CarMax generally makes very little on these. In fact, appraisers are judged based on how accurate their offers are (read, close to as fair as possible). Too high or too low and they can get in trouble. So when people say things like “they only offered me 3k for my Camry in great condition” well… It probably had a ton of miles, and they can’t retail it.
Age: anything 10+ years older. Same deal as mileage. Automatic wholesale.
Inventory: Even if you’re bringing in a more valuable vehicle, if CarMax has a bunch of that type of car right now, they start to pay less to buy more of them in trade ins. Additionally, if the demand is low, or if it is a vehicle that tends to sit on the lot for awhile, you will probably get a low ball offer.
Remember, CarMax is pulling their info on what a car is worth from their own database. The offer is what the vehicle is worth to them. They aren’t offering you what you’re going to get from a private buyer, so of course you are going to get more from Craigslist or whatever other method of private selling you choose. CarMax just makes the entire process a lot more simple, and you don’t have to worry about their check bouncing. I’ve actually sold three cars to CarMax, and felt I got a good value on all three. But it isn’t the best answer for everyone, every time.
In other words, the convenience doesn’t justify the lost value of your trade-in. It’s clear that you’ll be able to secure a better deal elsewhere, especially from a traditional dealership. Not only will you receive transparency in regards to your used car’s value, but you can also take advantage of these business’s additional amenities once your transaction is complete.
Meanwhile, user “carmaxamrac” held an ask me anything session to answer questions about the business. While they did reveal that CarMax requires their vehicles undergo an extensive inspection, they also didn’t do much to convince us that their used offerings are actually reliable:
“Absolutely no negotiations, there is no budging. I don’t know why it’s so successful, but it works.
Cars on the front lot are NOT sold as is. Assuming they bought their car off the front lot, you can get anything fixed within 30 days of purchase for no cost. And we’ll give you a loaner car in the meantime.
Any car that makes it to the front lot goes through an inspection that should have caught that, assuming the techs/inventory at the store you bought it from actually try to do their job. The big thing is that some CarMax’s have wholesale auctions where they sell cars that are beyond repair (>100k miles, frame damage, flood damage) to other dealers.
But the main thing is is that used cars are USED cars. They’re not brand new so there’s always a bit of a gamble involved. And occasionally someone selling the car will lie about something and we won’t catch it.”
So to review, we’ve been able to confirm some of the suspicions we’ve had about CarMax, especially in regards to their trade-in value:
- Offers are temporary, and there’s little chance they’ll improve over time
- CarMax sets their own used car values… so you can’t anticipate an offer by exploring Kelley Blue Book, eBay, Craigslist, etc.
- If the car has high mileage or is over 10 years old, don’t bother trying to sell it. You’re basically guaranteed to get a better offer elsewhere.
- Value is also dependent on a specific CarMax’s inventory. In other words, considering the growing popularity of the company, CarMax can reasonably argue that they’re stocked full of every model.
As you can see, CarMax certainly isn’t the best option if you’re looking to maximize your trade-in value. Instead, visit a traditional dealership. You won’t just receive a more convenient, transparent experience, but you can also take advantage of all of their other available amenities.