If I go to Carmax I know what I’m getting — a standardized but low-balled price for my car and no hassle. My time is worth money and the car buying experience is fucking miserable.
Why CarMax Makes More Money on Used Cars Than Anyone Else
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Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#12A lot of people will pay extra to avoid the typical used-car bullshit process, when buying... Shady dealers where you spend 2.5 hours haggling, encountering a $295 "documentation fee" you need to threaten to walk away to get removed, etc.
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#13There's value in removing negotiations to end consumer. The expectation to negotiate can introduce stress and uncertainty into an already-stressful large purchase. CarMax removes that, and captures the value in higher prices. But it is interesting that more people don't do a quick check of Kelly Blue Book. For example BMW 328i in article at Carmax is $27k. On KBB selling to private party value is $21k-$23k. Maybe the…
The value of buying from CarMax is a level of assurance that I won't be buying a lemon and that I'm doing business with a company with a positive reputation.
I'm in my early 40s and I've only had five cars. The first two were from a car dealer who was the father of my best friend, one new one and two from CarMax for myself and my wife. My experiences at CarMax were much better than my one time buying a new car from a dealer that I didn't know personally.
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#14[flagged]
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#15If I go to Carmax I know what I’m getting — a standardized but low-balled price for my car and no hassle. My time is worth money and the car buying experience is fucking miserable.
This exactly. When I compare my experiences buying houses and my experience dealing with car dealerships, I had s much more pleasant experience dealing with house buying.
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#16They buy from people in need as well.
I debated on selling them my F150. They offered me 17k and I told them to go fuck themselves.
It got totaled ~4 years later and I got a bit over $17k.
So the people that need cash will bend over. Those too stupid to shop around (marketing works as well) will overpay.
Almost everyone I know falls in love with a car or house when they're buying because it's such a huge purchase. For me I'm only in love if it's a good deal. That's one thing my parents certainly taught me well (thanks!).
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#17I had a good experience buying a car from CarMax. Their maintenance and service quotes were extraordinarily high though.
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#18As an aside, the Tom McParland articles are always interesting to me because he talks directly about auto sales, where if you go to a dealer if feels like you always get half-truths and the runaround.
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#19There's value in removing negotiations to end consumer. The expectation to negotiate can introduce stress and uncertainty into an already-stressful large purchase. CarMax removes that, and captures the value in higher prices. But it is interesting that more people don't do a quick check of Kelly Blue Book. For example BMW 328i in article at Carmax is $27k. On KBB selling to private party value is $21k-$23k. Maybe the…
Of course there is a markup, but it's better to look at buying, not selling KBB prices. Buying from a private party is usually the cheapest option, but the hardest to get right. Buying used from a regular dealer can be cheaper than Carmax, but you need to do a lot of negotiating and even then, it's typically not that much cheaper.
Re: Why CarMax Makes More Money on Used Cars Than Anyone Else
#20Carmax makes a ton of money because they bring new meaning to "low-ball" when they offer to buy your car. Go see what they'll offer you for a car just as a test, then go look up your car value on KBB, edmunds, anything.
When I sold my last car, they offered me $2k and I ended up selling it the next week for $7k.
Carmax goes after people who are either too lazy to sell it themselves or too desperate and need the money immediately.