Why CarMax Makes More Money on Used Cars Than Anyone Else • Hacker News Board

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#61

Post by ouid » Sun, Jun 03, 2018, 5:51 PM UTC

goatherders wrote: post #40

nosequel wrote: post #20

Carmax 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…

I sold my truck last week to them for 16200. KBB online "instant offer" was 18k. I went to the dealership that KBB directed me to and their official offer was 13000. The salesman told me KBB's offer wasn't official and was just meant to get me to their lot. So I went back to carmax and sold it for the 16200. I might have gotten a bit more on Craigslist or eBay but my time is worth more than that. Whole transaction to…

Your time is worth more than what, exactly? How many hours of work is worth an extra $1000?

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#62

Post by scarface74 » Sun, Jun 03, 2018, 5:55 PM UTC

ghaff wrote: post #46

scarface74 wrote: post #13

Earlier quoted context omitted.

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…

I've never used CarMax but I'd definitely consider them if I wanted a used vehicle. I'm in a similar situation when it comes to keeping cars a long time. If anything, I tend to keep them for an expensive repair job too long. It does make the car buying experience easier. I know the trade-in isn't worth much and I can always just donate as a fall-back. I also haven't needed to finance for a while. When you can just ba…

I've never done a trade in. My first car I gave back to my parents, my 2nd one was totaled, and my third one I gave to my son. I've gone to CarMax both times with a preapproved car loan but they have always had a lower interest rate.

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#63

Post by kbutler » Sun, Jun 03, 2018, 6:05 PM UTC

ouid wrote: post #61

goatherders wrote: post #40

Earlier quoted context omitted.

I sold my truck last week to them for 16200. KBB online "instant offer" was 18k. I went to the dealership that KBB directed me to and their official offer was 13000. The salesman told me KBB's offer wasn't official and was just meant to get me to their lot. So I went back to carmax and sold it for the 16200. I might have gotten a bit more on Craigslist or eBay but my time is worth more than that. Whole transaction to…

Your time is worth more than what, exactly? How many hours of work is worth an extra $1000?

...Maybe, if you find the right buyer, after you publish address to and meet with who knows what sort of people, and possibly deal with scams that will try to rip you off of the entire value of the car and possibly more...

There's more than just minutes spent in dealing with private-party sales.

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#64

Post by matt-attack » Sun, Jun 03, 2018, 6:20 PM UTC

nosequel wrote: post #20

Carmax 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…

Exactly. This is a point the article misses. I do believe they mark up the sale price similarly, but probably make even more margin on underpaying for their inventory.

Separately, I find it ironic that the term "no haggle" has been now socialized to mean "buyer friendly". Certain segments of the population have fallen for it, hook, line and sinker. In reality the notion that they refuse to haggle (i.e. refuse to lower our prices) should be viewed as anti-consumer. At least that's how I take it. I'd never, in a million years, buy something that high in price where the price couldn't be negotiated.

Lastly, the article [1] that's linked to in OP's article is actually more fascinating in my opinion. It describes a California court ruling against CarMax's inspection policy and how it violates 2006 California Consumer Protection statutes. Pretty interesting.

[1] https://jalopnik.com/california-court-says-carmax-certificat...

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#65

Post by mgkimsal » Sun, Jun 03, 2018, 6:27 PM UTC

matt-attack wrote: post #64

nosequel wrote: post #20

Carmax 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…

Exactly. This is a point the article misses. I do believe they mark up the sale price similarly, but probably make even more margin on underpaying for their inventory. Separately, I find it ironic that the term "no haggle" has been now socialized to mean "buyer friendly". Certain segments of the population have fallen for it, hook, line and sinker. In reality the notion that they refuse to haggle (i.e. refuse to lowe…

> In reality the notion that they refuse to haggle (i.e. refuse to lower our prices) should be viewed as anti-consumer

Lowering prices isn't the same as haggling. Haggling is going to see some salespeople lowering the price more or less for some people vs others, and open them up for a massive discrimination class action lawsuit.

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#66

Post by mgkimsal » Sun, Jun 03, 2018, 6:29 PM UTC

ouid wrote: post #61

goatherders wrote: post #40

Earlier quoted context omitted.

I sold my truck last week to them for 16200. KBB online "instant offer" was 18k. I went to the dealership that KBB directed me to and their official offer was 13000. The salesman told me KBB's offer wasn't official and was just meant to get me to their lot. So I went back to carmax and sold it for the 16200. I might have gotten a bit more on Craigslist or eBay but my time is worth more than that. Whole transaction to…

Your time is worth more than what, exactly? How many hours of work is worth an extra $1000?

> How many hours of work is worth an extra $1000

Let's say it's an extra 12 hours to sell via private party (posting pics, meeting people, haggling, etc). That's $80/hr. You may not actually be earning that whole time, but it's also opportunity cost for doing other things you may value more (time with family/friends/etc).

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#67

Post by matt-attack » Sun, Jun 03, 2018, 6:33 PM UTC

mgkimsal wrote: post #65

matt-attack wrote: post #64

Earlier quoted context omitted.

Exactly. This is a point the article misses. I do believe they mark up the sale price similarly, but probably make even more margin on underpaying for their inventory. Separately, I find it ironic that the term "no haggle" has been now socialized to mean "buyer friendly". Certain segments of the population have fallen for it, hook, line and sinker. In reality the notion that they refuse to haggle (i.e. refuse to lowe…

> In reality the notion that they refuse to haggle (i.e. refuse to lower our prices) should be viewed as anti-consumer Lowering prices isn't the same as haggling. Haggling is going to see some salespeople lowering the price more or less for some people vs others, and open them up for a massive discrimination class action lawsuit.

> salespeople lowering the price more or less for some people vs others

Agreed. Why must that naturally lead to the idea of discrimination? If I'm selling a car privately, and a buyers arrives and agrees to pay my full asking price, have I discriminated against him, even though I know secretly I would have taking $1k less than asking, had he merely asked?

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#68

Post by matt-attack » Sun, Jun 03, 2018, 6:34 PM UTC

larsiusprime wrote: post #45

nosequel wrote: post #20

Carmax 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…

This is just anecdata. We bought a used car at Carmax and they gave us way, way, way above bluebook value for our trade-in (and all other offers, too -- and we were pretty aggressive in researching trade-in offers at other places and were prepared to be underballed by Carmax). My anecdata is no more useful than yours. Unless someone provides some actual reliable data points to produce a real, known trend, there's no…

Since we're telling anecdotes, I brought in a 1999 Honda Prelude back in 2005. They offered me $6k. I sold it on eBay for $11k.

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#69

Post by mgkimsal » Sun, Jun 03, 2018, 6:40 PM UTC

matt-attack wrote: post #67

mgkimsal wrote: post #65

Earlier quoted context omitted.

> In reality the notion that they refuse to haggle (i.e. refuse to lower our prices) should be viewed as anti-consumer Lowering prices isn't the same as haggling. Haggling is going to see some salespeople lowering the price more or less for some people vs others, and open them up for a massive discrimination class action lawsuit.

> salespeople lowering the price more or less for some people vs others Agreed. Why must that naturally lead to the idea of discrimination? If I'm selling a car privately, and a buyers arrives and agrees to pay my full asking price, have I discriminated against him, even though I know secretly I would have taking $1k less than asking, had he merely asked?

if you're a larger company, defending yourself against charges of allowing discriminatory behavior would just be too costly. why allow it?

Re: Why CarMax Makes More Money on Used Cars Than Anyone Else

#70

Post by bittercynic » Sun, Jun 03, 2018, 6:40 PM UTC

kbutler wrote: post #63

ouid wrote: post #61

Earlier quoted context omitted.

Your time is worth more than what, exactly? How many hours of work is worth an extra $1000?

...Maybe, if you find the right buyer, after you publish address to and meet with who knows what sort of people, and possibly deal with scams that will try to rip you off of the entire value of the car and possibly more... There's more than just minutes spent in dealing with private-party sales.

Accepting those risks and developing the confidence to buy and sell stuff yourself can be pretty profitable, and and comes with a sense of independence that can be very valuable.