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

#31

Post by illumin8 » Sun, Jun 03, 2018, 4:04 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…

This is spot on. They offered me $6500 for my car, which was way below blue book. I sold it on Craigslist for $9700 a few days later.

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

#32

Post by cstejerean » Sun, Jun 03, 2018, 4:13 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…

If Carmax offered you 2k then the car you were trading in was not something they were interested in, so they probably offered you what they could get at auction for it. There are certain things for which you don’t want to use carmax. Also, did you sell it private party for $7k or was that at another dealership?

I’ve bought and sold a decent number of cars over be years and carmax has routinely offered the best price I could get from any other dealership, but it depends on the specifics. I may trade in my heavily modified Jeep Wrangler next and that’s not something I would bother with carmax for. They don’t generally sell modified 4x4 rigs, so they’re likely to flip it at auction and therefore make a lowball offer. So I’m going to go to a dealership that specializes in what I’m selling.

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

#33

Post by cstejerean » Sun, Jun 03, 2018, 4:14 PM UTC

illumin8 wrote: post #31

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 spot on. They offered me $6500 for my car, which was way below blue book. I sold it on Craigslist for $9700 a few days later.

You will always be able to get more money on a private party sale than trading into a dealer. Did any other dealership offer you more than $6,500?

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

#34

Post by illumin8 » Sun, Jun 03, 2018, 4:27 PM UTC

cstejerean wrote: post #33

illumin8 wrote: post #31

Earlier quoted context omitted.

This is spot on. They offered me $6500 for my car, which was way below blue book. I sold it on Craigslist for $9700 a few days later.

You will always be able to get more money on a private party sale than trading into a dealer. Did any other dealership offer you more than $6,500?

Yes, another dealership offered me $7500. CarMax was by far the low ball offer.

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

#35

Post by bdcravens » Sun, Jun 03, 2018, 4:30 PM UTC

illumin8 wrote: post #31

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 spot on. They offered me $6500 for my car, which was way below blue book. I sold it on Craigslist for $9700 a few days later.

Of course they won't give you private sale value; they're buying it to resell.

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

#36

Post by chaosbutters » Sun, Jun 03, 2018, 4:40 PM UTC

chrisseaton wrote: post #5

xivzgrev wrote: post #2

There'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…

A lot of people are probably happy to pay the premium to avoid the relative uncertainty, risk and awkwardness of a private sale.

exactly this

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

#37

Post by csours » Sun, Jun 03, 2018, 4:43 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…

Completely agree with user cstejerean here. You didn't say anything about your car, but I will hazard a guess that it was over 10 years old, but still a somewhat rare or desirable vehicle. Carmax doesn't want vehicles over 10 years old.

Also, to other commentors here, consider tax implications when you compare sale price on a trade-in. If you wind up paying taxes on the sale of your vehicle, that may offset the increase in price on a private sale.

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

#38

Post by bruceb » Sun, Jun 03, 2018, 4:45 PM UTC

kalleboo wrote: post #6

true_religion wrote: post #4

Earlier quoted context omitted.

Car max has a long comprehensive waranty. It may be worth it to someone for ther peace of mind.

The warranty can be a really good value on some used cars https://youtu.be/MzQCj-dbgN0

Whats weird is he never says exactly what he paid for the Range Rover in the first place. I found a post where he said it was in the 30s. but why not tell that info?

Then could compare Car cost + warranty vs private party purchase.

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

#39

Post by gervase » Sun, Jun 03, 2018, 4:46 PM UTC

willio58 wrote: post #26

usaphp wrote: post #22

Interestingly couple years ago a BMW dealer offered me $2500 more for trade in of my 2014 5 series than what Carmax offered. Since then I always try to double check what other dealers offer

This is how carmax works. They’ll never give you the best offer, just a convenient process.

I ended up getting nearly twice as much from CarMax as I was offered from any dealers. However, I suspect this was because there was a serious problem with the steering column that CarMax missed in their inspection that the dealers did not.

Either way, the process was painless enough that I don't think it can hurt getting an additional valuation.

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

#40

Post by goatherders » Sun, Jun 03, 2018, 4:49 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…

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 took less than an hour.