Tips and tricks for buying a used car at CarMax.


Buying a car is not exactly easy. Between finding the right car for you, locating a reliable and trustworthy dealer, and getting a good price, it’s easy to sink a huge amount of time, energy, and frustration into the process.

And while there are certain benefits to buying a new car — knowing that you’re getting a vehicle that hasn’t been flogged by someone else and having the piece of mind of a factory warranty are two that come to mind — the fact is that the minute you drive your fancy new car off the lot, its value plummets like David Caruso’s post-NYPD Blue career.

With that in mind, I think a slightly used car (i.e. 2-4 years old with less than 50k miles and one owner) is the way to go. You get the benefit of a newish car with the latest tech and safety features, with the knowledge that you didn’t get screwed on depreciation.

There is however just one minor challenge: how do you find a car that is reliable and well maintained at a price that is fair?

Enter CarMax. Over the years I’ve bought a number of cars from these folks, and during that time I’ve learned how to leverage the CarMax system to ensure that I get a reliable and cost-effective car which also has the highest possible resale value.

Here’s how I do it.

Learn the CarMax system

The first thing to understand about CarMax is how their salespeople are paid. Unlike most car dealerships, CarMax employees are paid a flat fee per car, which means they are mainly concerned about volume and not the sales price. They are also paid for selling their extended warranty, and in some cases, other items (like buying your car, selling accessories, etc.)

The second thing to understand is that CarMax is a ‘no-pressure’ sales environment. As such you will never be pushed to buy a car (and certainly never one that you can’t afford), although you might feel hurried given that employees make money based on volume.

The third thing to understand is that CarMax has a money back guarantee, a 30-day warranty, and an extended warranty which is available for all cars that they sell. As I’ll explain below, this will be one of the key points of leverage in assuring that we get a quality vehicle.

Finally, there is absolutely no negotiation on price, so if another dealer has a better offer on the same car, you should probably consider it.

Test drive until you know what you want

Test drives at CarMax are a mixed bag. On the one hand, you can drive any car on the lot, and once you’re out there, you can hop between cars. (CarMax puts their keys in a lockbox on the window of every car, so a salesperson can easily access them while on the lot.) On the other hand, the salesperson will likely rush you through the test drive.

To do a test drive, all you need is a valid driver’s license. And if you want to spend a few hours test driving, they won’t stop you. Just be ready to get passed between salespeople if you take a while or stop by on a busy day.

When you do your test drive, try to drive on roads with different conditions. For example, take a quick run onto the highway, and then go on a (preferably rough) back road. Test acceleration and brakes, and get a good feel for the car. At this point, you’re primarily looking for overall feel so you can narrow down the make a model. And if you get a car that seems to have issues, stop the test drive and pick something else.

(One side note here. Go during a weekday if you can, and in the morning or afternoon. Your salesperson will be much more likely to not rush you.)

Don’t worry about who you get as a salesperson — but if you find someone you like, keep their card

Like test drives, CarMax salespeople are also a mixed bag. True story: one guy almost ran me over. Needless to say, I didn’t use him again.

CarMax is unusual as well in that if you make an inquiry through their site (either to place a hold or schedule a test drive), they assign you to a random person. Similarly, if you show up at their store, you’ll get whoever is on deck.

Once you find someone you like, though, you can circumvent the system and talk directly to that person. But you have to call them or email them directly, so make sure you save their contact information.

Get your car appraised while you’re looking

CarMax offers free appraisals and will buy your car even if you don’t buy one of theirs. You may also get a small tax credit towards sales tax on your purchase if you do a trade.

Personally, I have never sold a car to CarMax because their offers are too low. And in my experience, they often miss features and options which increase the value of the car and further lower their offer. (Whether this is on purpose or a result of incompetence I can’t say.) But it doesn’t hurt to get them to appraise your car, and you’re certainly not obligated to take their offer.

Should you decide to sell them your car you will need to do it within 7 days of their offer. If you don’t you’ll need to get the car re-appraised.

Narrow your search to one brand, make, & model

In order to maximize your choices, you need to narrow your search. Sounds counter-intuitive, right? The reason why I do this is so that I can find the best example of the car I want. This is hard to do if you’re comparing different brands, makes, and models, especially considering that just about every make and model CarMax sells has different mileage and is also optioned differently. You’ll want to make sure to get the right combination of price, miles, and options for you, and this can only be done efficiently when you compare very similar vehicles.

Get familiar with the make & model

You can’t make an informed decision about whether you are picking the best car for you (and for the price) until you are familiar with the features, ratings, and pitfalls for a particular make and model, and for a particular model year range.

Because most vehicle manufacturers update their models regularly (a full redesign will happen about every 5-7 years, and smaller changes can happen every 1 or 2 years), it’s important to research the make & model. For example, I’ve been recently shopping for a Ford Edge, and from about 10 minutes of research, I learned that they launched a redesign in 2015 which has a greatly improved suspension along with new engine choices. But I also learned that they updated their Sync system significantly in 2016 to improve the hardware (which means that it is not retroactively upgradable). With that in mind, I quickly narrowed my search to model years 2016 and newer.

Finally, CarMax is not always correct about what options a particular model has. While some VIN lookup tools exist that will tell you the exact options on a vehicle (and which I’ll cover below), many times you will have to piece it together based on the option packages available, the information that CarMax has, and pictures of the vehicle.

The main sites that I use for model year reviews are:

I’d also highly recommend browsing owner forums for the make and model you’re looking at as many of them will have discussions about common issues.

Use the CarMax ‘search alert’ feature to find exactly the car you want

Once you settle on a brand, make, model, and model year range, set up a search on carmax.com using their extensive set of search filters. Once you’ve set up a search, you can save it and have CarMax alert you via email as soon as a match is found.

Be patient, and you will find the options, color, and mileage you want at the price you want. CarMax turns over their inventory very quickly — sometimes a car will be listed and then sold within hours — so chances are the car you are looking for will turn up in 30 days or less.

Look up the VIN

Some car manufacturers tie vehicles options and packages to VINs, which is a very useful method to determine how a vehicle is equipped. But even for those that don’t, you can use an online VIN decoder tool to confirm that the make, model, and basic options are correct. Here are some of the tools I would recommend. Note however that many of them will not show you specific options for the vehicle, with the except of the BMW VIN decoder, and the window sticker tool. (For some brands, including Audi and VW, the options are coded on a sticker near the spare wheel.)

Check the fair market value

Once you’ve narrowed down your selections, you’ll want to see where CarMax falls on the value scale. While for the most part, they are in line with dealer prices, sometimes their prices are either higher or lower than the market.

The best sites for checking values are NADA and Kelly Blue Book. You can also do a search on Autotrader and other online classified websites to compare local listings. From what I can tell though, CarMax prices its cars based on national values, so local market variations are not taken into consideration.

If you find that CarMax is more than $500-$1000 above NADA or KBB, you may want to consider another version of this car (with more options or lower mileage), or another brand, make, or model. There are two reasons for this:

  1. A car which is overpriced is going to depreciate faster and net you less when you sell it.
  2. If you finance the vehicle, your bank may make you cover the difference in cash (although CarMax will probably let you roll the difference into your loan if you finance through them).

Check local dealer inventory

It’s always wise to check local dealer inventory to compare pricing and options. CarMax is primarily about convenience and quality and not competitive pricing (plus they won’t haggle with you), so if you find a very similarly optioned vehicle at a local dealer, it’s probably worth checking out to see if you can get a better price.

Check the VIN and recall history

Every CarMax listing includes a free AutoCheck report and also links directly to the US NHTSA website to look up open recall information. Take a minute to review both.

You’ll find that CarMax often sells rental vehicles, which may or may not be a downside. Whether or not you can expect a rental to be treated like a personally owned vehicle is a matter of debate. On the one hand, the rental car company is more likely to fastidiously maintain the vehicle. On the other hand, the drivers of said vehicles may very well have flogged them for all they are worth.

Ask for more pictures if the car isn’t local

If you find a car you like and it’s unclear from the pictures whether something is simply dirty or truly damaged, then you can ask your salesperson for additional pictures of the car. The fact is that CarMax often doesn’t do a proper clean of the car before they take pictures and put it on the lot, so I’ve seen some embarrassingly dirty examples.

Hold the car you want — or transfer it

Once you find the car you want, you have two options: place a hold for up to 7 days, or transfer it from another store.

If you place a hold, you have up to 7 days to stop in and test drive the car. Once you go for a test drive, you can either buy the car or move on (but CarMax will not extend the hold).

You can transfer a car from just about any CarMax location, although the cost goes up the further away it is. Transfer fees range from free to $999 and are not refundable nor can they be applied to the sale price. A transfer can take from a few days to a month depending on distance.

What it means when a car is listed as ‘sold’

CarMax tags any car as sold as soon as it’s considered unavailable. This could mean a number of things:

  • Someone has put the car on hold
  • Someone has taken it for a test drive
  • The car is being transferred
  • A CarMax employee is borrowing it (one of their perks for reaching certain sales goals — they are allowed to keep a car for up to 30 days)

Bottom line is that if a car you really want is listed as sold, it may just be out for a test drive or on hold. Hang on to the listing link if you really care about it, as it may come back (sometimes within hours).

Do another test drive with the car you want

This test drive should be similar to earlier test drives — e.g. drive the car on different road conditions — but this time you’re also looking for potential issues. Listen to the engine, listen for various squeaks and rattles inside the car, and check for the smell of burning fluids. While CarMax’s warranty will likely cover any issues you find, it’s better to bring up any issues so you can get them addressed right away (or choose another car).

Get a loan from a credit union

If you have a good credit rating then CarMax financing is likely to be reasonable, but your local credit union can probably beat their offer. By all means have CarMax give you an offer if you don’t mind having them pull your credit, but plan on coming in pre-approved with your own financing so that you are in a better position to make a good financial decision.

Consider buying the extended warranty — and make sure you factor the cost into the sales price

CarMax warranties are awesome. Not only are they often reasonably priced (as little as $1500 for a 5 year / up to 75,000-mile warranty), but they offer better coverage than some manufacturer warranties, cover the cost of rental/loaner, and are better than most other third-party extended warranties. The icing on the cake though is that it can be used at the dealer with a deductible, which is anywhere from $50 – $300 depending on the warranty you choose. (If you buy a luxury vehicle then the dealer will typically have a high end waiting area and also offer you brand-name loaners, which is a nice additional perk).

Typically CarMax offers 4 tiers of warranties (with each tier having a higher deductible but lower cost than the last) which are good for 5 years and from 75k – 150k miles, although the specifics will vary based on make and model. Before you choose a warranty though make sure to calculate your average mileage so you don’t overpay.

Having said that, sometimes the warranty just isn’t a good deal (and for some older or higher mile models of luxury or near-luxury European cars such as BMWs or Mercedes, they may be downright unreasonable). Your salesperson will be able to quickly pull warranty cost before you buy the car, so make sure to ask them about it so that you can factor the amount into your overall purchase price.

Finally, be aware that CarMax offers both a 5-day money back guarantee and a 30-day warranty on all vehicles they sell. As I note below, you can use this to your advantage and potentially save yourself the cost of the extended warranty.

Don’t trust their ‘125 point’ inspection

Personally, I think the ‘125-point’ inspection they tout is bunk and I’m not convinced that they consistently do it. True story: I bought a car from them with a punctured spare tire. Now go ahead and ask me if that is a checklist item on their fancy 125-point inspection list?

The good news is that if they missed something, and you catch it, they will fix it — provided that you bring it to them within 30 days of the purchase (or within the extended warranty period, if it’s a covered item).

Get a ‘post-purchase’ inspection and take full advantage of the 5-day return policy and the 30-day warranty

Forget ‘pre-purchase’ inspections (especially those mobile inspectors, which are just about worthless). With CarMax you have the flexibility to get the car thoroughly inspected, at your leisure, after you buy it.

Just make sure to do it before the 5-day money back guarantee is up so that you have more leverage if you find anything wrong. This is especially true for items which are not covered by the warranty but which are going to cost you money right away.

Here’s what I like to do:

  • Do your own visual inspection by thoroughly inspecting in broad daylight everything you can observe on and in the vehicle. This includes paint, bodywork, bumpers, lights, electronics, seats, and yes — the spare tire.
  • Test drive the car in as many road conditions as possible. Turn off the stereo so you can listen to both the inside of the car and the engine. Listen for squeaks, rattles, or otherwise out of the ordinary noises.
  • Find a local independent mechanic which you trust or which is highly rated (Yelp is a good source for this).
  • Have the indy do a proper inspection — up on a lift — and make sure that you can look at the car with them while it’s on the lift. (Some shops may cite safety concerns with allowing you on the shop floor, but as long as you wear eye protection you should be good to go.)
  • Have them write up any and all issues they find, from minor to major.
  • Take the list back to CarMax and ask them to fix it.

Regardless of whether they find any issues, you mechanic should also provide you with a detailed list of what they have inspected. Some things that you should definitely have them review:

  • Overall ‘feel’ of the car which will involve a test drive of the car on varied roads (long and straight, as well as bumpy and curvy)
  • Suspension condition
  • Tire condition, brand, and size (make sure they match each other and are also the manufacturer recommended size)
  • Brake wear and condition
  • Battery condition
  • Sunroof and window condition and operation
  • Fluid levels
  • Fluid leaks and seepage
  • Signs of accidents or repair
  • Signs of rust
  • Computer codes (OBD codes) to check for pending codes and other events (you can also do this yourself if you have an ODB2 scanner).

Here’s a helpful checklist from Popular Mechanics which you can use as a reference.

One note here — if you find enough issues, CarMax may try to get you to return the car. This is because it will be cheaper for them to sell it at auction instead of fixing it. However, they cannot refuse to fix it, so at this point, it is up to you whether you keep it or not.

Do a maintenance service (not at CarMax) right away

Since CarMax won’t provide you with service records, it’s wise to assume that any of the required services haven’t been done. Service schedules vary based on make and model and should be either listed in your owner’s manual (which by the way, CarMax will pay for if one didn’t come with the car), or online. The one exception is condition based service, which some cars track on their computers. If the car you’re buying has such a system, either look in the onboard computer for details or get the indy or dealer to pull service history from the car.

If the car is newer and was recently under warranty, it’s possible that the dealership has the service records. You can nicely ask them to check, although no guarantees that they will share them with you.

At the very least though, plan on replacing oil and brake fluid and topping off all fluids.

Don’t use the CarMax service center for the extended warranty — unless your local dealer sucks

Any issues you find in the first 30 days must be handled via the CarMax service center, but after that, you can take it anywhere.

Personally, my preference is to use the dealer, for a couple of reasons:

  • They have more expertise and better equipment which is also specific to their brand
  • They will probably have loaners — which are covered by MaxCare
  • They will have a nicer waiting area
  • They have probably dealt with MaxCare before
  • They (hopefully) don’t suck

If your dealer sucks then by all means use an independent, but make sure that they contact MaxCare BEFORE completing any repairs. MaxCare is quite particular about approving repairs and in some cases may want to send an adjuster (inspector) out to review the issue first.

As a last resort take it to your CarMax service center (which by the way will waive up to $50 of your deductible), but be aware that the service can be hit or miss. They will, however, provide you with a loaner from their inventory.


Questions? Let me know in the comments.


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