bmkarr

i took my 8 up to carmax yesterday and they quoted me 21k for it. I looked up the Kelly Blue Book on it and they quoted me 23k. i was wondering if this is what i am to expect from the dealerships or was the guy just trying to take me for an idiot. thanks

Sigma

KBB is always slow to react to the market.

CarMax knows that the '05s are going on clearance now. RX-8s can already be had for as much as $6000 under MSRP and soon it will be thousands more. If they paid you $23K they'd have to sell it for $25K to make it worth their while -- that's just about the going price for a brand-new Touring RX-8 right now and within a month or two will be the going price for a brand-new GT. So they're not going to have much luck selling it at that price.

dwynne

CarMax USED to be a good place to sell a car. They would give you KBB trade for your car if it was in nice shape. A friend is a buyer for them and somewhere along the way they figured out the auction saved them a lot of money. So they give auction house prices to folks, and unless someone is desperate enough to take it they don't buy many cars from folks any more.

Used to be a good place to BUY a car, but their no-negotiate prices are sky high. In the SAME newspaper the Kia dealer is doing $5k off new Sedona mini vans and CarMax has 4 or 5 used ones for around the same price. Ditto a lot of other cars - dealer ads for new ones about as cheap as their price. Yet folks who don't want to haggle or hassle will go there an pay too much (like a Saturn dealership) just because it makes them feel better.

Dennis

jaguargod

When I was looking online, I found Carmax to have some of the worst trade in values of anyone. That is probably why they guarantee to buy your car even if you don't buy theirs.

Elara

Whoa, I don't know what your Buyer friend was telling you, but he apparently doesn't know what he's talking about. CarMax actually buys a good deal of its cars from customers- I'd have to go look up the exact figures, but it's pretty high. Yes, they get cars at auctions, but not as many as you'd think(and god help us if we sold th cars at auction prices- we'd never make any money! Do you know how cheap they go for at auction?). I can also pretty much promise you CarMax has never, ever, (or very rarely) given anyone KBB value on anything. How do you think we actually make the claim (in some markets, at least) that their cars average $XXXX below KBB?

The problem right now is that new car dealers are getting a lot of pressure to sell more cars, so they are creating better and better deals. It takes a while for the used market to catch up with that. Once a dealer has bought a car at a certain price, even if new car prices suddenly drop below that, how could they then sell it for less? They'd lose money on the vehicle.

Jaguargod, you can't look online for CarMax's tradein values- they aren't there. The only thing there is a link to KBB. The only way to get trade-in value is to go have your car appraised. The "we'll buy car even if you don't buy ours" is how we get a good deal of the cars we sell.

Yes, you can often get a better deal than CarMax(okay, a lot of the time- hell, I didn't even buy MY car from there and I get a substantial discount). But if you add up all the extra fees and things that get tacked onto most "deals" you'll probably discover they aren't anywhere near as great as you thought they were, and CarMax wasn't as bad as you thought they were.

And yes, I work for CarMax. There are lot of odd things about this company, but it also seems like a lot of people misunderstand a lot of stuff about how the used car market in general works.

dwynne

If they go for so cheap at auction (and they do) then why would you buy a car from a private party for more - even if they did not buy a car from you? CarMax is in the business of making money, so they would buy at the cheapest source (the auction) and sell to at the highest price (retail). To do otherwise would be to cost the company money.

I am telling you, when the CarMax opened here they were giving about KBB TRADE IN for used cars from private parties. I had a couple of cars looked at as did many friends. In fact the folks at the local CarMax told folks they could expect "about KBB trade in" if the car was in nice shape.

Still, I know it is your job - but the prices at CarMax as just silly compared to what you can wheel and deal for a car. Now CarMax does serve those folks that do not know how to deal, do not enjoy it, or are routinely "Taken" by rotten dealers. They DO price the cars and don't deal but also no funny business either.

For the rest of us - that don't mind dealing and don't give in to pressure do stupid things like buy "paint and fabric protection", CarMax under pays for used cars from the public and over charges for the ones they are selling.

Nothing wrong with that, but they are not going to sell me a car. Of course, neither is any other "one price" dealership. If I am not into the hold back, I am paying too much :D

Dennis

Elara

Well, for one, most auctioned cars are pretty crappy. You tend to get a lot of off-lease and off-fleet vehicles at auction. In some states, they have such an awful reputation that automotive regulations require them to be listed as "fleet" or "prior rentals." So we don't buy tons and tons from auctions. Who wants a lot filled with 500 corollas, cavaliers, grand ams, and tauruses? The best cars tend to come directly from private owners, who take pride in their cars and actually care for them. Which means we pay more for them. Which in turn leads to higher prices on the nicer (read: better maintained) cars- one of the main things people tend to fuss about with CarMax. We also sell a ton of vehicles at our own auctions, because we buy so many from customers that we can't use.

Which, again, leads back to what I was saying before. The used-car market is always a month or two, at least, behind the new car market in terms of price volitility- that's just what happens with turnover, since it can take a month or so to sell a car on a lot (our stock tends to turn over about once a month). A lot can happen with new car prices in a month, and the used car market can't really react immediately without losing a ton of money. When new car prices start heading upwards again with fewer incentives, CarMax prices will start looking better. Unfortunately, it's pretty much the same case in most used car places right now. Until these insane incentives quit, the used car market isn't going to be the best.

Elara

And there's nothing wrong with that- as I said, I didn't buy from KMX either. But we are in the minority. The majority of people don't know any better and buy that kind of stuff because they don't want to argue or feel pressured, so CarMax, which isn't trying to get them to buy stuff like that and gives them a low-pressure option where they feel comfortable and not cheated, IS a good deal.