Since opening its first store in 1993, CarMax has paved the way forward for used car dealerships by developing a “hassle-free” way to buy and sell used vehicles. By streamlining the buying process, and making the entire affair more transparent, they quickly gained a loyal customer base, but many still wonder, is CarMax negotiable?
Because of CarMax’s “no-haggle pricing,” it is not possible to negotiate the selling price of a vehicle. However, buyers may still be able to negotiate certain aspects of the overall price.
Continue reading to learn more about CarMax’s “no-haggle pricing” and the ways that you might still be able to negotiate the price of your new (used) car.
Can You Negotiate the Price of a Vehicle with Carmax?
Can you negotiate with CarMax about the asking price of a vehicle? No. CarMax has built its reputation around its “no-haggle pricing,” which means you will not have the opportunity to haggle with a salesperson over price tags.
For those of us who enjoy the thrill of beating a salesperson down on their price and feeling as though we walked away with a deal, this might be a massive disappointment. However, for the other 9-million people who have bought cars from CarMax, losing their negotiation power was worth it for the benefits listed below.
Benefits Of CarMax’s No Haggle Pricing System
While giving away your negotiation power might be a tough pill to swallow, there are a few benefits that come with doing business with CarMax.
1. Access to Inventory
With over 200 locations, you are bound to find something that you like. Plus, unlike other dealerships that are limited to a certain brand, CarMax sells all makes and models, and since they are constantly buying used cars from everyday people like you and me, their inventory is always varied.
Instead of spending the day traveling from one dealership to the next looking for that perfect car, you can browse through hundreds of listings right from the comfort of your own home.
2. Fixed Commission
Most salespeople earn a paycheck based on commission. However, this method creates a situation that entices salespeople to jack the price of a vehicle—because they need to make a living too. Why wouldn’t they try to sell each vehicle for $2,000 over the asking price?
Although CarMax employees do earn money based on commission, that commission is fixed. Instead of being able to increase the price to whatever amount they want to make, employees make a certain amount from each vehicle that is sold. The amount they make depends on how many vehicles they sell, but it will never affect the price of the vehicle you are buying.
While this means a CarMax employee will not make as much as your typical salesperson, at least you can rest easy knowing that your money is not padding someone else’s pocket.
3. Thorough Inspections
CarMax prices its vehicles based on an algorithm that uses data from all over to figure out a fair market price. For example, the algorithm will calculate the condition of the vehicle against what other vehicles of that condition have sold for in the area and make a determination based on that. This only works, though, if the condition of the vehicle is well known, which is why CarMax vehicles go through such a rigorous inspection process.
This is good news for consumers because this 125-point inspection will find any problems that might not have been noticeable. For example, they will be able to tell if the vehicle has been in an accident before, if there is any frame damage, or even if the vehicle has been in a flood. All these things are then calculated into the asking price and any problems that are not fixed beforehand will be included in the description of the vehicle, making it easy for you to research repair costs and decide if it would be worth repairing. This clarity is not something you would normally get when negotiating with a dealership.
Most dealerships offer some type of warranty, but once you drive off the lot, the vehicle is your problem. With CarMax, buyers have 24 hours to test drive a vehicle before they buy it. Then, once they buy the vehicle, they have 30 days (or 1,500 miles) to decide if they want to keep it. If they do not like the car, they can simply return it for a full refund. Even if the driver decides to keep the car, they will have a limited warranty program backing them up for another 90 days (or 4,000 miles).
5. Free History Report
CarMax is a bit meticulous about the vehicles they will buy and sell, and they are so sure that buyers are getting a quality product that they are willing to show them the car report for free. Additionally, since buyers sometimes buy the vehicle before even seeing it, the history report adds that extra layer of security in knowing that you are getting what you expect.
6. Money Back Period
As described above, buyers have 30 days (about 4 and a half weeks) to bring the vehicle back and receive a full refund. Additionally, if the buyer finds damage that was not disclosed before they bought it, they can bring it back and receive a refund of the amount that the algorithm decides the repairs will cost.
Can You Negotiate a Better Price with CarMax?
Although you cannot negotiate the price of the vehicle, there may still be a way in which you can negotiate the overall price you pay when shopping with CarMax. In fact, there may be more than one way in which you can still wield your bargaining power.
Buying a vehicle outright is the best way to save money on interest rates because you won’t have to worry about them. However, if you don’t have the cash available to buy outright, then you still have some bargaining power.
CarMax offers in-house financing, but they also work with second-party financial institutions, and depending on your situation, you might be able to secure a better loan with an outside financer. This is especially true if you have a bank who you have been with for years and who will work with you.
How many times have you been sucked into buying an “extended warranty” package on a vehicle? Salespeople know how to make you feel as though you are buying the best car on planet earth and then, at the same time, make you feel like you need extra coverage on it. Unfortunately, that $2,500 is typically wrapped into the loan, which means you end up paying interest on that too!
That’s not to say that an extended warranty is a bad idea, but you should know that you can buy coverage from outside sources as well. Shop around and make sure you are getting the best coverage for the best possible price.
In addition to using its algorithm to set their sale prices, CarMax uses it to quote the price it will pay to buy your used car as well. That is what allows CarMax to give quotes so quickly, at all hours of the day, without ever having seen the vehicle. However, if you are planning to trade your vehicle in, and you know the car is worth more than they have offered, you may be able to work with someone on the trade-in price.
However, if they will not budge on the trade-in price, consider selling the vehicle on the open market yourself. Additionally, you may be able to use the vehicle as collateral on a new loan (if the vehicle is paid off) and keep both cars. There are several ways to get a better price on your old car, which can in turn help lower the price you pay for the new one.
Repairs and Services
Finally, another way that you may be able to negotiate a bit with CarMax is by asking them what else they can do for you. If you find there is something wrong with the vehicle, ask if they can repair it before you buy the car. Or could they reduce the price to factor in the repair costs? Additionally, you might ask them to throw in a set of new tires, which could save you a few hundred bucks in the coming years. Never be afraid to ask them what they can do for you, you might be surprised at the answer!
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