Is It A Good Deal ?

Carmax recently reported a fourth quarter 48% drop in profits. Carmax also estimates an average profit of $2500/car, which means if you do some work you can find a car for cheaper than what Carmax is selling it for. Trust me I’ve been in the car business for many, many years and I know the margins on cars and Carmax is definitely on the top end.

So if you’re looking for your next car and need some help, click on the free advice link above and e-mail me for free car advice.

I just had a few people asking for pricing on cars so I did a quick search on the usual websites like Cars.com, Autotrader.com and Craigslist.org. I compared the prices I found from reputable dealers to those of the same model, year and mileage vehicle that Carmax was selling. Here is what I found:

Carmax: 2002 BMW 325i with 36k miles $18,998

Other Dealers: Not only were other dealers listing 2002 325i’s with 30-39k miles for thousands cheaper, but you could find a 2003 with the same mileage for under $18,998.

Moral of the story: Shop around, because Carmax can be severely overpriced sometimes.

If you’re thinking of selling your car to Carmax and would like a second opinion on the price they quoted you or just a general idea of how much you should be selling your car for… e-mail us at the “Free Advice” link at the top of the page and we’ll e-mail you back with free advice.

Don’t let Carmax rip you off!

Just because Carmax claims they do a 125 point inspection on every car they sell, it doesn’t mean every car they sell will be reliable and without problems.

Read the following story about a guy and his problems with Carmax: Read It Here

I was researching the Carmax website for selling my 2004 truck. They claim to use the Kelly Book in order to get a ballpark figure. I asked the salesman how accurate the Kelly book figures are and he said they aren’t off by much but that they really don’t go by those figures, just the “MARKET VALUE” of the truck. I told him that using the Kelly book sounds like a way to get people into the store if they don’t use those figures. He agreed with me and wondered why himself. When I got the appraisal results after waiting 45 minutes, their figures were $5700.00 less than the book value. Thanks Carmax for making me drive 95 miles one way for nothing!

Looking for a used car? Get a FREE VIN check at AutoCheck®.

Brian M. writes us his experience with Carmax:

I bought a 98 Volvo at CarMax in 2001. During the 5 day grace period I took it to my mechanic who saw an oil leal and thought it was the flame trap. I returned the car and Car Max said they would send it to a Volvo dealer to get it repaired. They did and I took it back to the mechanic and he found the leak again. I took the car back to carmax and they sent it back to the dealer . Aha! It turned out there was a leak in the block. The Volvo dealer wanted $7500 to replace the engine. Carmax said they would do the work themselves. I told them no way…only if the dealer did it. CarMax refused. I told them I wanted the deal negated because it was obvious they did not do the inspection they said they do. But they refused to negate the deal.

Lucky for me I knew someone who knew the personal email address of the CarMax General Manager. I sent him an email. The next day the Service and Sales managers who refused to negate the deal called me up and said the deal was negated. They told me to find a similar Volvo anywhere in the USA and they would not charge me shipping charge. They kept their word but if I didn’t have that “inside” line Lord knows what would have happened.

Looking for a used car? Get a FREE VIN check at AutoCheck®.

Tina A. from Texas shared her story with us earlier today:

I just recently had an awful experience at Carmax in Austin, Texas (North location). I first contacted them via the internet and a sales consultant emailed me right away: Kris Santoscoy. I knew the exact car I wanted and there was no other like it in the state. I went to the lot during lunchtime and test drove it. I wanted the car right away - I filled out some paperwork and got approved. I went back to work and started the process of getting my insurance and proof of income. I faxed those to Kris the next morning and arranged to pick up my car that day.

He got all the docs then called me a few hours later with “bad news”. He told me that overnight, their staff was moving cars around me and one of their employees wrecked two of the cars on the lot, one of them being mine. He said that they do not sell wrecked or damaged cars at all and that it would have to be sent to a wholesaler. I was devastated! I arranged to go to dealership that same day and talk with him about my “options”. I was hoping to see the car, get a more thorough explanation and verify that I was not financially responsible for the car (I had not signed the final paperwork yet, so I was pretty sure that was the case).

I get there, and Kris is gone. Another sales guy helps me and glosses over the wreck issue entirely - steering me towards choosing a new car. I smell something fishy so inquire further: “can I see the car?” “does this happen often?” “Can I see the paperwork to make sure I’m not liable?” etc. He finally says “well….maybe the car was not wrecked” - I am shocked and say “MAYBE??” - he says “maybe it was sold instead and he didn’t want to tell you” WHAT?????? I demand to know all the details of what happened to my car either way. He finally confesses “yes, it was sold”. The manager finally comes over and admit that Kris lied to me….the car was never wrecked. Kris failed to do the paperwork/process on his end and that first evening, the manager sold the car without knowing I had a claim on it!!!!!!! I was SHOCKED!

He was very apologetic etc…. He said he could cover the transfer fee for another vehicle outside Austin. I requested they cover the transfer fee for ANY car in the nation and they refused. The most they would over was $200 - basically inside Texas. I said the LEAST they should do is let me find the exact car - no matter where it is - and get it to me. They would not offer me more than the $200 transfer fee. I left and ended up buying a car from another dealer.

BUT, I later found out from the dealership down south - that it is easy to “lose” a car that you are interested in because everyone is looking at that same car online and anyone, anywhere could be staking their claim on it….so it’s first in line so to speak. Apparently, it is often the case that a customer is interested in a car and test drives it, and at the same time elsewhere, someone is starting the paperwork on that same car. They don’t appear to have a great system for “claiming” a car. In my case, my sales guy was incompetent and I was out time and trouble - and betrayed in the process.

Looking for a used car? Get a FREE VIN check at AutoCheck®.

RICHMOND, Va., Jan. 17 /PRNewswire/ — One month after the launch of expanded online vehicle search capabilities, CarMax, Inc. the nation’s largest retailer of used cars, reports the top ten vehicle features searched for on carmax.com in December.

“People told us that generally they know the options that are important to them, but often don’t know which vehicle makes and models offer them,” said Ann Yauger, director of carmax.com. “Now that people are able to search by feature, it’s interesting to see what they are looking for most frequently.” Yauger continued, “People want new technologies and we see that reflected with navigation systems ranking higher than ABS brakes and cruise control.”

Top Ten Vehicle Features Searched
Ranking Feature
1 Leather Seats
2 Navigation System
3 Sunroof
4 3rd Row Seat
5 Seat Heater(s)
6 ABS Brakes
7 Cruise Control
8 Manual Transmission
9 TV/DVD
10 Power Seat(s)

In December 2007, CarMax launched a new, innovative approach to the way consumers conduct vehicle searches on carmax.com based on research and customer feedback. The new vehicle search enables consumers to search based on a wide array of criteria including price, mileage, type, popular features and other options without having to first select a make and model. Another unique benefit allows online car shoppers the opportunity to combine the options they want.

Online shoppers can use the carmax.com website to search the company’s inventory of more than 25,000 new and used cars. The website showcases each vehicle with multiple photos, the no-haggle price, and information on features, options, fuel economy and customer reviews. In fiscal year 2007, carmax.com averaged more than four million visits per month. Additionally, approximately 70 percent of in-store customers visited the website before coming to the store.

Looking for a used car? Get a FREE VIN check at AutoCheck®.

If you’ve ever had a bad experience with Carmax, we’d like to know. The more we share your stories, the more people are informed regarding Carmax’s business practices.

Send us an e-mail to:

So@IsItAGoodDeal.Com

So Carmax locations are popping up around the country, with about 74 locations in 35 markets Carmax is quickly becoming one of the biggest players in the US used car market. As a car dealer myself I’m in total shock that they are reporting higher and higher profits every quarter. I’d say their are two main aspects of their business: buying and selling.

When we look at their purchasing of cars its one of the biggest rip offs in the business. The way they have you believe the process works is, you look up your cars Kelley Blue Book pricing and go into Carmax and walk out with a very similar amount. What happens nine times out of ten is you walk out with thousands more or get such a low ball offer you leave in astonishment. Unfortunately their are lots of people in such desperate situations who have no other option then to take their offer. The way Carmax buys cars is this, they buy it from you so cheaply that they can either sell the car themselves, mark it up a boat load or even take it to the wholesale dealer only auctions and still make a profit on it. Either way, don’t expect Carmax to give you what you’re asking. This has nothing to do with the difference between private party and trade in pricing, this has to do with the difference of Carmax pricing and trade in pricing.

The other aspect of their business is selling cars. This simply leaves me amazed beyond belief. They have the whole gimmick of no hassle, no haggle pricing… its pure business genius. They are preying on the people who hate dealing with salespeople… what happens here is you get over charged for a car worth hundreds and in most cases thousands less. Go on their site and do a simple search for a car and you’ll be amazed the prices they charge. For example, at the moment at our car dealer we have a 98 Civic, which I found almost an identical comparison at Carmax. Carmax is asking $8995 for a 98 with over 100k miles !!! I’m selling the same car for $5995 and I’ll even throw in a year warranty.

Do a little car shopping people, Carmax is the biggest rip off in the used car market. I’m really not trying to make other dealers sound better, but my goal is to show the absurd prices and the effect of doing a little more homework before you buy your next car.