CarMax is the largest used car retailer in the US. With over 200 locations nationwide, CarMax has changed the way people buy and sell used cars by providing a low-pressure and transparent car buying experience.
But is CarMax really the best place to buy or sell your next car? How exactly does CarMax work and what fees can you expect to pay when buying or selling a car with CarMax?
This comprehensive guide will explain everything you need to know about the CarMax car buying and selling process, potential fees, and whether CarMax is the right choice for your next car purchase or sale.
How Does CarMax Work?
CarMax is a nationwide chain of used car dealerships aimed at providing a hassle-free car-buying experience. The CarMax process works like this:
Browse and choose from CarMax’s nationwide inventory of over 50,000 used cars online or at a local CarMax store.
Test drive the car and have it inspected at a CarMax location.
Get a no-haggle price offer from CarMax on the car you want.
Buy the car on the spot by paying cash or getting CarMax financing. You can also have the car shipped to your home.
Sell or trade in your old car to CarMax. You’ll get a cash offer upfront with no obligations.
The CarMax model provides a low-pressure car buying experience by offering transparent, no-haggle pricing and allowing customers to shop and test drive without dealing with commission-motivated salespeople.
What Fees Does CarMax Charge When Buying a Car?
The main benefit of buying from CarMax is that the price you see listed online or on the car sticker is the price you pay. There is no back-and-forth negotiating with a salesperson.
However, CarMax charges additional fees on top of the sales price when you purchase a car. Here are the main fees to be aware of:
Documentation Fee: This processing, handling or dealer fee ranges from $199 to $399, depending on your state. It covers costs like filing paperwork and verifying your identity.
Title and Registration Fees: Expect to pay around $20 – $200 in title transfer and registration fees, depending on your state.
State and Local Taxes: Sales tax varies by location but ranges from 2% to 10% of the vehicle purchase price.
Shipping Fee: If you don’t pick the car up from a CarMax location, there is a $599 transportation fee for shipping.
So for example, on a $20,000 used car purchase, you could end up paying:
- Vehicle Price: $20,000
- Documentation Fee: $399
- Title Transfer Fee: $50
- Sales Tax: $2,000 (at 10% tax rate)
- Shipping: $599
- Total Price: $23,048
While CarMax is upfront about additional fees, make sure you budget for taxes, title transfers, and shipping charges which can add more than 10% to the sticker price.
What is the CarMax Buying Process?
The CarMax car buying process is meant to be simple and stress-free compared to traditional dealerships. Here are the key steps if you buy a car with CarMax:
Browse Inventory Online: Use the CarMax website or app to search nationwide inventory and select cars you’re interested in.
Schedule a Test Drive: Test drive the car and inspect it at your local CarMax location. Sales associates can answer questions but won’t pressure you.
Get a Price Offer: After the test drive, a no-haggle price offer is provided based on market value and condition. This offer is good for seven days.
Complete Purchase On-Site: If you want to proceed, complete financing and paperwork at CarMax. You can also have the car shipped.
Drive Off the Lot: Once finalized, you can drive away in your new, used car the same day or have it delivered if it needs to be transferred from another location.
The ability to shop nationwide inventory online, test drive without high-pressure sales tactics, get a straightforward price offer and complete the purchase all in one place makes CarMax a popular used car buying destination.
How Does Selling or Trading a Car to CarMax Work?
Along with used car sales, CarMax also allows you to sell or trade-in your old car. The process works like this:
Request an online offer or visit a local CarMax for an appraisal.
A CarMax associate will inspect your car and provide a cash bid based on its market value. There is no commitment to sell at this point.
If you accept the offer, complete the paperwork and CarMax will hand you a check on the spot.
For trade-ins, the offer amount is simply deducted from the price of your new CarMax car purchase.
Selling to CarMax can eliminate the hassle of private sales. You get a guaranteed cash offer upfront without needing to negotiate or deal with potential buyers.
However, you may earn more selling privately if your car is in high demand. Do some research to see if CarMax’s offer aligns with the current market value for your vehicle.
Does CarMax Negotiate on Price?
A major perk of the CarMax model is that they advertise no haggle pricing. The sticker price or online listing price is non-negotiable. You won’t have to worry about back and forth bartering with the typical car dealership experience.
According to CarMax:
“We believe in treating all customers equally, so our prices are non-negotiable. We do not allow negotiating because it creates unfair advantages for savvy hagglers over those who aren’t as experienced.”
While you can’t negotiate on an individual car price, there are some things CarMax will negotiate on:
- Interest rates for CarMax auto financing
- Trade-in value for your old car
- Add-ons like extended warranties
So while the set sticker price is fixed, you may have some wiggle room when it comes to financing terms, trade-in value, or service plans on the backend.
Does CarMax Offer Any Discounts?
You won’t find special internet pricing, manufacturer incentives, rebates, or other temporary discounts at CarMax. Their no haggle model relies on transparent, market-based pricing on all vehicles.
However, CarMax does offer some other savings opportunities:
Used Car Specials: Check the website for select cars offered several hundred or thousand dollars below market price. These are limited time price cuts on specific vehicles.
Referral Bonuses: Referring someone who buys a car from CarMax can earn you and the referred buyer $100 each.
CarMax Auto Finance: Getting financing through CarMax may provide lower interest rates than external options, saving on total loan costs.
Buying a Car Online: Shopping online cuts out the middleman and can occasionally result in some additional savings compared to purchasing in-store.
While discounts are limited and pricing is fixed, taking advantage of specials, financing, and online buying can potentially maximize savings at CarMax.
5 Benefits of Buying From CarMax
Buying a used car from a CarMax dealership provides several advantages compared to other used car lots and private sales:
No Haggle Pricing – CarMax advertises its prices upfront with no annoying back and forth bartering.
Nationwide Inventory – Search over 50,000 used cars online and get any vehicle transferred to your local CarMax.
Flexible Test Drives – Test drive without feeling pressured and drive as many cars as you need.
On-Site Financing – Get financing, trade-in quotes, and complete the purchase all in one place.
7-Day Money Back Guarantee – Return the car within 7 days and 300 miles for a full refund (minus shipping fees for online orders).
The combination of transparent pricing, huge selection, flexible test drives, streamlined purchase process, and money back returns makes CarMax one of the best options for risk-free used car buying.
Is CarMax the Best Place to Buy a Used Car?
CarMax provides an excellent used car buying experience, but may not always offer the absolute lowest prices. Here are some things to consider:
CarMax pays top dollar when acquiring vehicles for resale, so their overhead costs are high. This gets passed along in pricing.
With a huge nationwide inventory, CarMax prices cars competitively but doesn’t haggle. Local dealerships may negotiate lower on specific cars.
Private party sales often have the best prices, but involve more time, risk, and negotiation.
Check other large used car chains like AutoNation and Vroom which offer similar processes to CarMax.
The convenience, service, and experience of buying from CarMax may be worth paying slightly higher prices for some car shoppers. Make sure to compare CarMax to private party listings and other dealers when buying your next used car.
Is Selling to CarMax Worth It?
Selling your used car to CarMax can be a convenient way to get cash fast without the hassle of a private party sale. However, it’s important to weigh the pros and cons:
Pros of Selling to CarMax:
Get a guaranteed upfront cash offer from CarMax without needing to find a buyer.
Avoid paying for advertising or listing fees to sell privately.
No need to let strangers test drive your car when selling to CarMax.
Sell your car quickly without negotiating or dealing with potential buyers.
Use the CarMax offer to trade-in and save on taxes on a new car purchase.
Cons of Selling to CarMax:
CarMax offers are usually lower than selling privately. They need to make a profit reselling your car.
You may be leaving money on the table compared to a private party sale.
No option to sell to the highest bidder or negotiate price with CarMax.
Need to bring your car to CarMax during business hours for the appraisal process.
CarMax does not accept all vehicle makes, models, conditions, and situations.
If convenience and speed are your priorities when selling your used car, CarMax provides a solid option. However, selling privately or getting quotes from multiple dealers may get you a higher sales price.
Tips for Getting the Most Money When Selling Your Car to CarMax
If you do decide to sell your car to CarMax, here are some tips to maximize your payout:
Clean and detail your car thoroughly inside and out before the appraisal. A cleaner car can sometimes mean a higher offer.
Gather service records and paperwork that show maintenance, repairs, and ownership history for your car. This demonstrates that your car has been well cared for.
Research the fair market price for your car’s make, model, year, mileage and condition. This gives you a benchmark to assess the CarMax offer against.
Consider timing your sale to when your car is in high demand seasonally. For example, 4×4 SUVs sell for more in the winter.
Test drive and get quotes from other dealerships and websites like Kelly Blue Book. Use competing offers to negotiate the price up with CarMax.
Ask if there are any current rebates or special pricing incentives you may qualify for when selling your car to CarMax.
Be prepared to walk away and sell privately if the CarMax offer seems too low. Sometimes they’ll call you back with a better price.
Getting the maximum dollars for your used car takes some preparation and research. But using these tips when selling to CarMax can help ensure you get every penny your car is worth.
Bottom Line: Is CarMax Worth It?
Overall, CarMax provides a widely accessible, low pressure used car buying and selling experience that many consumers find appealing. While pricing is non-negotiable, the broad selection, customer service, and money back returns make CarMax a smart option for some car shoppers.
However, it’s important to compare CarMax to other dealers and private party options to make sure you are getting the best deal. Be aware of all the additional fees involved with buying from CarMax as well.
Weigh the pros and cons and consider you own needs to determine if using CarMax for your next car purchase or sale makes sense.
Key Takeaways:
CarMax is the largest used car retailer in the US with over 200 dealership locations nationwide.
The CarMax process allows you to shop a huge online inventory, test drive, get no haggle pricing, and purchase your car all in one place.
When buying a car from CarMax, be aware of documentation fees, taxes, title transfers, and shipping charges that add to the sales price.
Selling or trading in your old car to CarMax can provide a fast and convenient way to get cash for your used car. But you may earn more selling privately.
While CarMax doesn’t negotiate on set prices, you may be able to get the financing rate, trade-in value, or add-ons lowered with some back and forth.
Consider both the benefits of transparency and convenience as well as the higher prices compared to other options when deciding if CarMax is right for your next car.