CarMax’s Friendly Buying Experience
| by Jim Wang |  Print Article
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Originally published May 30th, 2005.
With the recent passing of my girlfriend’s 1990 Toyota Celica, she’s been feverishly researching cars and collecting pricing information on used vehicles. As part of her research we took a trip down to the Laurel CarMax facility to check out the feel of some cars and what we’d expect to pay. If you aren’t familiar with CarMax, and they’re only located in some states so there may not be one near you. But they pride themselves on no-haggle pricing and being a friendly sales environment where they don’t try to pull a fast one on you like traditional horror-story-type dealerships.
As soon as you walk into a CarMax, and if you wander around, you’ll be greeted by one of their sales representatives almost immediately. They’re not forceful but they will ask you if you’re being helped if you wander the dealership alone. How knowledgeable they are about cars depends on the person but the person who helped us, David, was there for three years and had a pretty good understanding about the cars he was showing us.
CarMax sells a large number of used cars, the Laurel, MD location sells the most out of any of them. David told us one month they had a quota of 1,100 cars and crushed it by selling 1,400 – the execs came down and cooked them steak and lobster. The reason CarMax sells so many cars is because they’re valuing turnover and sale frequency over the profit per sale. It’s obvious when you talk to these folks that they aren’t trying to sell you an expensive car, they’re trying to sell you the car you want. Even the sales commission structure works this way.
The commission structure at CarMax works as follows: a salesman makes $150 per sale plus bonuses if they sell warranties, financing plans, etc. Quota at CarMax is ten cars. If you average thirteen cars in a 6 month span, you are part of a Director’s Club. Sell fifteen cars and you’re in the President’s Club. As you join these clubs, the commissions increase so it behooves you to sell as many cars as possible. The quickest way to do that is to match a buyer with the car they want – not try to sell them a car that’s more expensive. A $50,000 car nets the same commission as a $10,000 car – but you can move cheaper cars more often!
Anyway, that gives you an idea of the inner workings. We showed up at the CarMax to find a Honda Civic, Toyota Corolla, or a Saturn of some kind. The Laurel location didn’t have any used Corolla’s or Saturn’s in my girlfriend’s price range and mileage but we did find three Civic’s she was interested in looking at. Another benefit of CarMax is that you can find out what sort of financing they can secure for you in under fifteen minutes without an obligation. After a quick credit check, my girlfriend could get an incredibly crappy rate of 6.45% on a 5 year loan on a Civic ($14k sticker, $4k down). You can always buy the car and secure your own financing within three days without incurring any interest penalties (for them floating the loan to you for three days).
David told us about the CarMax MaxCare Extended Service Plan too – which covers what your typical manufacturer’s 3-year 60,000 mile warranty would cover. This is important because if you’re buying a gently used car, you probably only have a fraction of the manufacturer’s warranty remaining. All you pay is a $75 deductible ($50 if you take it to a CarMax) and it sounds pretty sweet. The price for five years of coverage was a flat price of $1,199 on a $14,000 car – $1,149 for only forty-eight months.
David knew that we weren’t going to buy a car that day (it was pretty obvious) but he was very polite, helped us with all that we needed, and when we thanked him he was very polite. He never made us feel uncomfortable and I appreciated that. We asked for a business card in case we did decided CarMax was the best option and we were on our way.
{ 13 comments, please add your thoughts now! }
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Oct 13, 2005 | Read more in Cars, Shopping
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So, do you feel that the $14K was a good price? How much is that same car at a traditional dealer? I suppose it would be lower than the dealer’s sticker price but higher than what you could negotiate the final price down for. But perhaps not…like you said, volume is key…so maybe the price is just as low as a dealer would go…that would be very interesting to find out.
No way, $14k is NOT a good price for that car. In her research, she’s found that CarMax is more expensive than private party sales, Ebay sales, and most used car sales at a dealership. The only price CarMax seems to consistently beat are those cars that are “Certified Used” from dealerships (like Honda’s Certified Used car program, etc).
I bought my jeep at CarMax in Dulles, VA. I can’t say it was a good experience.
They sold me the car but didn’t give me the title. It hadn’t occured to me that in the 40 different papers I signed to purchase the car, the title was not among them. That became a problem when I was trying to get a license plate. Turns out, CarMax didn’t even have the title. The title was in New York because it still had a lein on it or something.
When I asked “whats up with not giving me a title?” they responded, “Its legal to sell a car in Virginia without a title.” So A) thats pretty stupid on the State of Virginia’s part, and B) as for CarMax, it may be legal, but it just ain’t right.
I took about 4 months before I finally got a title…. I had to drive around on a succession of temporary tags up until then. For a no-hassle process, it sure was a hassle.
Anyway, if you are going to buy from CarMax, make darn sure the car comes with a title.
I HATE Carmax!!!! They sell you cars for Kelley Blue Book Retail (Which NO bank that I am aware of uses!!) and the claim of the cars being quality is BS!!! I bought a 05 Focus ZX3 from one of their Chicago locations. the cars HAS been is a Wreck!! It HAS been through a hailstorm!! And it has several Large burns in the Interior plus the interior is screwed up from the hail repair guys!! So, my attorney is preparing some Legal Paperwork for them..
So send car max a fax…
301-483-3562
I have purchased my 4th car from Carmax. Maybe you all have the time to go and play silly games with regular car dealers, but I don’t. Also I might add that too many of my friends have bought cars from private party sales only to have them disappear as soon as the cash was in hand. Also being ex-military, I have seen all sorts of scams pulled by regular car dealers on unsuppecting kids.
Parker keep in mind that you did indeed purchased a FORD FOCUS, a ongoing version of the Escort, there is a 5 day return policy, you can always have the vehicle inspected by your own personal mechanic, as far as hailstorm, as long as the vehicle was not sold or at least taken care of any defects then carmax will retail so long as the structural integrity of the vehicle is not altered. Plain and simple. Carmax does not advertise never been in hailstorm or other natural disasters, but mainly flood and frame damage.
I just bought my 8th car from Carmax yesterday. I won’t buy a used car anywhere else. I have spend a month researching the car I want. I then check prices on the net, at local dealers ect……. Yes Private party sales on Auto trader are a little cheaper than carmax, but Local used car dealers have never been lower in price than carmax on comparable vehicles in my experiences. Other dealers are always 3000 – 5000 dollars more. I have never had any luck trying to get a used car dealer to come off a price by 3000. Maybe 500 – 1000. To me theres no sense in taking a chance buying a private party car. I will say this, for the first time ever yesterday, The car I chose came up with an accident on the car check report. Turned out it was a fender bump and it got repaired and repainted, They had an identical car on the lot with 3000 less miles at $1000 more sticker. It checked out ok so I went with the clean report for $1000 more. As far as I know they just claim not to sell cars with frame damage.
Well, it is true that you will find cars on autotrader.com or other websites for cheaper sometimes….however, there is no warranty, guarantee, or reconditioning. My experience with carmax is that they fully recondition every car on their lot – which most people selling a car on the street never do. That peace of mind is worth a few extra bucks to me. A friend of mine used to work for them, and the best part is that sales associates and sales managers do not come up with the prices (most trad’l dlrships just price it for whatever will make them money) it all comes from analytical purchasing agents who know the market better than anybody. When I bought my Accord from Carmax, the other big thing I noticed was that almost every window sticker had a compare to KBB retail price of xxxxx which was always 4 or 5 grand higher than the carmax prices. I would only consider buying a used car from carmax!!
To the person in VA that thought they walk out of the dealership with a title in hand, no dealership gives you the title idiot…The title is sent to you from the DMV after the dealership reassigns it!
Hey a 6.45% is actually the lowest going rate on a used car so it’s not “crappy”
Gavin: This was written in 2005. Interest rates may have been different.
Also I might add that too many of my friends have bought cars from private party sales only to have them disappear as soon as the cash was in hand.
I cannot imagine that someone would buy a private party car and giving the other person money without the keys or title!
Can anyone tell me about working for CarMax? How are they as an employer? And what about the training program? Can a part timer make any serious money?