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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!

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Anonymous
#1553056

This is interesting to me....not at all my experience with Carmax in Minnesota. We had already had our trade-in appraised at 3 other places before coming here as well as compared to what private sellers were getting for similar age/condition.

Carmax offered us $1,000 MORE than what we had come up with in our research so we were absolutely thrilled. I don't care what they make off it as long as what I got was fair and it was more than fair.

We also paid $3,000 less for the car we got (a 2015 Jeep Patriot with 8,000 miles on it in perfect condition - after having an independent third party mechanic take a look) than what we could find that car for anywhere else. Sorry to hear others have had bad experiences.

Anonymous
#1436937

I got offered a 28% Apr rate at Carmax having a credit score of 680 now I know I used to skip my math class in high school but I can tell someone is getting paid pretty good abd its not me.

Anonymous
Abingdon, Maryland, United States #1209936

I worked in Automotive dealerships for 30 years working up to General Sales Manager prior to retiring a few years ago. I always marveled at the prices people paid at Carmax, much higher than dealers on the average.

The most important thing is professionalism. They have young kids appraising these cars and I've watched Carmax buyers time and time again pay ridiculously high prices for whatever they were buying. The last thing is most dealers are much more careful than Carmax. Not to say they are smarter or better but dealers often have sold their used car inventory as new cars and they know their customers.

I always made sure to take care of customers and I believe most dealers are just this way. My opinion was that if I had to give something to a Customer, even if it wasn't part of the deal, that item would pay for itself in goodwill over time.

The most important thing is to make sure the customer is happy, at all cost. Carmax, is a big Wallmart for cars and not to say you can't get a good car there but I've seen their inventory many times and I'll promise you most dealers wouldn't have it in their inventory.

Anonymous
to Bill #1478568

But then again Carmax is a non contingency dealership. They buy cars even if you don’t buy one of theirs, name any other dealership that does that.

People always hold a higher value to their cars then what it’s worth. They buy WHOLESALE sell RETAIL. Everybody becomes car experts but use Kelly Bluebook as a representation .

And most traditional dealerships ourbbuying from the Carmax auction lol. Those are the cars that didn’t meet standards.

Anonymous
to Bill #1479312

So Mr. Bill....explain this to me....I go to a “traditional” new/used car Stealership and I notice everyone in Armani Suits, Rolex watches and Salvatore Ferragamo shoes.

Sounds like the Stealership is making more money then any Carmax I have been to. Those CarMax dealership are in polo shirts, khaki pants and tennis shoes. I know for a fact Stealerships make $8000-$10000 off customers based upon the Deceptive Trade and Practice of moving numbers in the Finance office. That’s is why No traditional Stealership will ever show a consumer their finance rate or anything on the PC screen.

It is all smoke and mirrors with YOU GUYS!

Now who is the crooks? Rolex wearing fools!

Anonymous
#1198010

You don't have a clue what you are talking about and also its a business for Christ sake not a non profit .... They are there to make money.

I can assure you that this is all false as I work for them in the past. Just sounds like a bitter customer.

Anonymous
to Anonymous #1239665

Thank you for your loyalty to your corporate overlords Citizen!

Anonymous
#1136285

Not gonna be working there much longer smearing your company like that, are you? Don't like it, get out of the business.

Just like every business, money has to be made where it can be made.

Unfortunately, people like you and the old stereotypes keep profit margins in the car business lower than most businesses. That just means people like me have to work that,much harder to make a living.

Anonymous
to Anonymous #1172763

Get outta bizznes then. Clearly its making you a ***

Anonymous
Dublin, Virginia, United States #1136282

The max a dealer can up an interest rate is 2%. Even then, most lenders don't allow that any more, in lieu of a flat participation fee that doesn't even affect the consumer.

Don't demonize the car industry for making a 10% profit on you when most of the goods you buy are marked up 70% to 150%. Just because it's more money doesn't mean a fair profit shouldn't be allowed. It is a business because the goal is to make money. If a business broke even, how would they stay in business?

Geez. Do math.

Anonymous
Carmel, Indiana, United States #1109705

As a former salesman...I can fact check on quite a few of your statements.

First, EVERY dealer marks cars they take in trade up around $5000 and their goal....to make money. Of course they want to make a couple of grand on a car...why is this a problem?

10% profit on a $20,000 car is unfair? A can of beans in a supermarket makes close to 70% profit...

Secondly, EVERY dealer marks up the finance rate on most every deal at least 1-2 points. Don't like it? Get your own financing.

Thirdly...EVERY dealer will try to get your trade for less than it's value.

You don't have to do the deal. The key is knowing your trades value and understanding that you're trying to get as close to that number as possible....be reasonable about it. If your trade is so great why are you getting rid of it?

95% of all buyers...probably higher at places like Carmax...are really buying a payment more than the car they like. What that means is...are you happy with the payment?

Can you comfortably afford it or will you have buyers remorse?

If you are happy with the deal and feel comfortable...buy the car. If not...don't.

It's not a life decision. It's a car.

Anonymous
Mesquite, Texas, United States #963875

The part about the apr is 100% true. I did an application at home through Capital One for my mom.

She got approved for a decent rate. She wanted to see what Carmax could get her, so they put her in the system. It came back with rates from multiple lenders ranging from 5% to 10% higher than Capital One.

It gets worse (in my opinion)... one of those of those lenders through Carmax just so happened to be Capital One.

Anonymous
Los Angeles, California, United States #860591

I work there now and this article is 100% true... Carmax also likes to "repair" cars with wholesale and used parts...

if your buying a bmw there chances are majority of its parts are replaced with Generic or used brands... The place is a ripoff and I am (after 10 years of employment) going to quit today.

I can't work for liars and *** artist like this company anymore. Its only gotten worse

Anonymous
to IhateCarmax #1102587

Lol yeah right

Beautifulone1
to IhateCarmax #1173112

You're right it isn't right to *** people that really need cars. I hope by this time you have found a better job.

ringleader
Washington, District Of Columbia, United States #736939

It's all about numbers and marketing at carmax. I have heard many employees that work there say they would never buy a vehicle from there.

That says a lot about a company. I would actually like to make a commercial based on true facts about carmax that will point out the negative things.

Commercials are very misleading, and if you notice many cable companies wont allow you to fast forward through commercials anymore! YOU ARE FORCED TO WATCH THEM, unless you change the channel.

Anonymous
#432808

Personally I don't care about a free offer from a dealer...I want a FAIR offer!!!!! You obviously are in the pocket of carmax in some shape, form or fashion and that is ok, just make sure you know what you are talking about before leaving a message.

The problem is they same one thing and do the other. Market themselves one way and are no different than any other dealer out there.

They are going to take you for as much as they can and with fixed prices you are at their mercy. Carmax is really a low end, high margin place for people with very bad credit and no business savy.

Anonymous
#426335

Absolutely amazes me at the people who will slam an offer to purchase, an actual offer to put money in your hands on the spot, and confuse it with a kelly blue book or nada supposed value!! You are the same idiots who think that putting 2500.00 worth of rims on a 1k car makes the car worth more money!!

If it makes it worth so much more then why didnt you call your insurance company and insure it for more?? It is an offer to purchase, not an appraisal or guestimate, take it or leave it, its free and their checks dont bounce!!!

Anonymous
to isellusave #1088850

"Put money in your hands on the spot"! Are you fing kidding me?

So carmax can rip you off BIG TIME!

Total proof carmax takes advantage of those in need of cash. Carmax is a hitler company

Anonymous
#418619

Albert,

The way you speak you sound like a manager who likes to line their pockets with cash....

Where do you get the $50 commission for sales? I beg to differ... Lmao.. Back up your statements... Carmax is a scam. Visit your locally owned dealership which is not corporately owned

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