Carmax loves to market itself as not a traditional dealer, well NOTHING could be further from the truth. Here is the deal when you visit a Carmax.
If you get a vehicle appraised there is a nice little feature called ACR (Appraisal Cost Recovery)that they will not tell you about. What happens is the person who does your appraisal decides what they will offer you, they put that number in the system and when they hit the magic print button the computer will *** somewhere between $250-$3000, depending on the type of vehicle and the amount of money the person doing your appraisal thought the vehicle was worth. Example, if they offer you $500 on paper the person who did the appraisal most likely put either $1000-$1500 on your vehicle. If you get an appraisal that is above $8000 you can best believe you lost either $2,000 or $3,000 at a minimum from what the appraiser actually thought your vehicle was worth.
Now, on to finance and sales side...after all expenses carmax makes on average somewhere around $2,200 on each vehicle, AFTER EXPENSES. What does that mean to you, the average mark up on each vehicle is about $4,000. If they offer you $10,000 on paper for your vehicle, chances are they are going to put that vehicle on the front lot for $14,000. Now keep in mind if they bought your trade from you in this scenario, they are making $2,000 on the trade and $4,000 on the sale....so right now they have got you for $6,000 and we haven't even talked about financing yet.
If you finance with them the sales consultant will run your credit and when the results from the lenders come back they will show you all the results from the various lenders with their specific interest rate. The sales consultant will tell you that this is the rate the lender wants to charge you...well that is not entirely true. Carmax bumps up the rate on almost all, if not every single one. What I mean is that depending on your state, the lender may think your credit is worth a rate of 6% but the magic computer will bump that rate up to 7-10% and guess what makes money on this, CARMAX.
They were sued some time ago from what I understand for this practice and what they had to do is post a sign where you sign for your vehicle explaining that carmax "might" receive financial compensation for financing. Look around at the place you sign for your vehicle and you will see this sign, again depending on your state. At one point carmax did have higher standards than most of your dealers but this is really not so much the case anymore. Before the recession the wouldn't sell a care with multiple painted panels and were pretty selective.
Now, they will sell you a totally repainted vehicle with no problems. Now you tell me, why would a car be completely repainted? Most of the time that is because of an accident. They have relaxed their standards from much since 2007.
The sad part is that they market themselves as different when in reality their practices are at least as bad as a traditional dealer. The only advantages of carmax are, no haggle price(remember they are making about $4,000 on each one they sale), will buy your car from you(remember the magic computer is taking off a significant amount of money before you see their offer) and the five day return policy. Now the five day return policy is for the most part 100% true. If you bring it back before the end of the 5th day, they will take it back.
However, they do not have to give you back your trade if they don't want to if you sold them your trade. Just be very careful when shopping with them. They will NOT negotiate prices at all which does make it easy, but you are paying a SERIOUS premium for not haggling.
What I have just explained to you is the ABSOLUTE TRUTH and they can't deny it at all. Buyer BEWARE!