Comments for CarMax Numbers vs. the Real Value
(Selling to Carmax)

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Dont blame Sales People
by: Anonymous

I would like to say I like Carmax alot. They work hard for the consumer to earn your buisness, but sometimes people think Carmax is low balling them or not giving them the best rate possible, but the Carmax sales people do not decide that so do not take it out on the sales people. Just send email's and letters into the corp office. The sales people are there to help, and they get the grief from consumers, and that is not right at all. There is mark up in car's, but it is not $4,000 to $5,000 a car not at all. There was a customer that thought that Carmax had sold him a car, and the mark up was over 3,000 dollars, but there was only $600 dollar profit so its not as some people think it is. If your not in the buisness how do you know what cars should sell for? You will never know, and KBB, and other resources on line are updated every quarter, and car prices change every day.
very disappointed in carmax
by: Anonymous

I went to carmax to get a appraisal and was very disappointed. I have a Acura TSX and they have a very good resale value. My car is in great condition. They only offered me half of Kelley Blue Book!!! They have my same care listed for double what they wanted to pay me. Why the heck should they be able to make about $7000 on my car? That is rediculous!
There is a difference between wholesale and retail
by: Anonymous

Seems many people do not understand there is a difference between the wholesale price of a car and the retail price. Of course Carmax - and any other dealer - is going to offer less than retail for a car. And, Blue Book value doesn't mean that is what your car is going to sell for - there are market factors that vary the final sales price of a car. Even if it is in showroom ready condition. Bottom line - if you want retail, then sell it yourself.
Do You Know How KBB Works?
by: Anonymous

I'll explain how Kelly Blue Book derives values. So ANYONE wanting to write how CarMax ripped you off on an offer can read this and educate yourself.

Only select NEW dealerships (NOT ALL) report numbers to KBB. They report two numbers, NEW vehicle price and TRADE IN value. Here is the basic example, follow closely here: You see a 2011 Chevy truck for sale. The "sticker" price is lets say $20,000, you are trading in a 2002 Chevy truck and the dealer offers you $2,000. You say "well Kelly Blue Book says its worth $4,000, so I want $4,000". The dealer, eager to make that sale says, "of course we'll give you $4,000!"

Now the price of the new truck has changed to $22,000, or you know that 5% APR you wanted? Well they could only get it down to 7% (the whole time you did get the 5% APR, but they tell you 7% because they had to make up the extra $2,000 they gave you). So they take the NEW vehicle price which is now $2,000 more than listed and report it to KBB. Then they take your trade in value, $4,000, and report to KBB when in truth it was only worth $2,000. SO EACH NUMBER IS INFLATED.

But what about private party numbers you say? KBB uses a COMPUTER BASED depreciating algorithm to just generate a number. IT MEANS NOTHING. KBB does NOT ever physically appraise a vehicle! Ask yourself this, how many people do you know that have EVER paid ABOVE BLUE BOOK? No one. The exceptions being collectors.

When trading in your vehicle, dealers will offer you true value for them. Meaning, on that 2002 Chevy they offered you what they can go BUY them for. If they could go to an auction and buy your same vehicle for $2,000 (because that's what they ACTUALLY sell for), why would they buy it from you for $4,000? If you own a business, would you pay more for a product someone wants to sell you compared to what you can actually buy it for? OF COURSE NOT!

A typical dealer will not just give you a check for your car, CarMax will. That's the difference. If they would, they would be out of business because they would not be able to rip you off.
Carmax DOES make $4,000 profit
by: Anonymous

Last month, I sold my car - a 2009 Cadillac CTS - to Carmax for $23,000. I gave it to them fully detailed, low mileage, new tires, not a scratch on it, ready to be placed on the showroom floor. Two weeks later, they sold it for $27,000. A quick $4,000 profit.
Read the quarterly wall street report
by: Anonymous

read the quarterly report. It is a publicly traded company. avg profit =$2000 per unit after reconditioning, overhead, and oh yeah LIABILITY. Imagine what the insurance liability premium is. Also stop whining if the offer is too low. It is FREE and NO OBLIGATION, simply walk out the door and sell it yourself there slick...
$2000 Profit
by: Justin
(Editor in Chief)

To the visitor that posted to read the quarterly report and that the profit was $2000 per unit, I'd like to thank you for sharing.

One problem though is that the number you are referring to is a net profit number and not the gross profit. So your post actually validates my thinking that they are averaging somewhere in 4-5,000 dollar range.

I'm not trying to slam CarMax as I think they are an excellent company, but just making an observation.

Gross profits are simply the profit after cost of goods sold...i.e. the cost of the car and the cost to recondition it. Sometimes you'll add the cost of transportation, any fuel expenses to that cost and flooring costs (if applicable).

But, things like advertising, utility bills, office staff salaries, insurance costs, mortgage/lease, etc. aren't added to that cost, but are written off as expenses come tax time. These are not a per unit cost however and have no impact on the gross profit.

Thanks for your input,
Justin
Re: Carmax DOES make $4,000 profit
by: Anonymous

Did they sell it for that much or did they list it for that much?

And if they were able to turn around and sell it so quickly, why didn't you try selling it to a private party yourself before going to Carmax? Obviously, there was intangible value to you to NOT sell it in a private party transaction, and I'm guessing that value was about $4,000, otherwise you would have.

So all in all, I would say you received $27,000 in the form of a combination of cash, lack of hassle, and time to do other things rather than deal with strangers trying to negotiate the terms of your car (and calling you 3 months later for compensation when they get a flat tire). Seems like a win-win to me.
blue book
by: Anonymous

I was just wondering if you understand that all these websites that give estimates on cars do not actually buy cars. Your car is worth what someone will pay for it. Call Kelly.Edmunds,etc....and ask them to buy your car and Ipromise they will never make you an offer to buy.
it sounds like there's a bunch of people who work at CarMax on here
by: Anonymous

I understand that they're in a business to make money but it's kind of funny that I've had my car out on the road for 2 weeks and I've gotten three offers for 3000 and the CarMax quot was only for $1000 my headlights and taillights all together cost a thousand. there is nothing wrong with my engine online to buy my engine would cost 2000. to scrap my car I would get $675. Tran is in good condition, a used one is 600 so I'll say 500. I have leather interior with only one hole in the driver seat where my wallet is the rest of the inside is almost pristine condition the front and back bumper need to be repainted so - $900 that's a little high but why not. so the price of the engine the Trans and the lites 3500 - 900= 2500 and that's just the engine trans and lights. I don't see how they don't make $$ buying someing for 1000 putting maby 1200 in it and sell it for 15000 .so I don't know who you're trying to stroke here lol. and another thing if they don't over Mark cars then why did my friend pay 17 grand for a 2006 Pontiac g6. Place is a joke.
Lieing Cheating Thieves NEW
by: Anonymous

That is a bunch of bull they purchased my car for $24.000 and sold me one for $26.000 and turned around and sold my car for $28.000 and their car they sold had dirty oil and it was supposed to have been inspected 100%. They are no different than any other car dealer.I rather deal with a dealer on purchase price because you can negotiate price. I will make sure all my friends stay clear from car max. All they had to do is be fair but they are greedy and dishonest. Not only did they loose a good customerbut from this day forward I will tell everyone on the Internet,texts,emails not to shop there. I already got a bunch of my friends and they will tell their friends and their friends will tell their friends and it will continue until we hurt their bottom line.MONEY
Greedy NEW
by: Anonymous

Carmax will give you what is known as used car auction price for your vehicle. This is typically significantly lower than blue book trade in values. As for the cost they claim it costs for reconditioning, this where they receive more profit. How much is an oil and filter change, a wash and wax, and in some cases painless dent repair. Carmax claims this can be from 1500 to 2000. Most people can receive these services from a typicle car wash for a total of maybe 150 to 200, so why does it cost carmax 10 times as much? Both businesses have overhead and profit. So the moral of the story is beware.
Carmax are thieves NEW
by: Anonymous

I am a former employee of 3yrs with that company. I know first hand that what they do is not good business. They dont spend the money they say they do in inspecting the cars. The cars are over priced and the quality of the vehicles are crap. I left because i was tired of putting out fires for all the vehicles i sold. They say that only 1 out of 3 vehicles make it to be a carmax car. Well if the carmax car is in that condition imagine what the other two would be. The interest rates provided are inflated. They also say they dont sell cars with flood or fram damage. Also a lie. I sold 5 during my time working there. So do yourself a favor and stay away. Tell anyone you know not to buy from those crooks.
Big joke CarMax NEW
by: Anonymous

KBB value private party price $4000
CarMax offer $750
Carmax prices way above Kelly Blue Book. NEW
by: Anonymous

All cars I have see are (no haggle???) priced way above highest level of dealer blue book price. It is for suckers only? Everytime I look I just do not understand who is buying for these prices.
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