CARMAX.... an interesting experience

[Slew Foot]

So I went in today to the local Carmax (Roseville CA, near Sacramento) to see what kind of trade in value they would give me for my car.
I must say, the place was a freaking zoo, everyone and there mom was in there trying to trade in or look at cars.

The service agents were very nice and helpful, they got to me faster than they said they would, and the experience was rather quick and painless. It's kind of like the Costco of used car lots. The appraiser took a look at my car while I perused the used car lot with the other service agent.

The prices on the used cars were interesting to say the least. A one year old Accord Ex was 21.8K, the same price I got my 08 new one for. While a 2 year old BMW X5 was 35K which seemed really cheap. I suppose it speaks for the resale of SUVs since there were lots of them with similarly depreciated values. The agent told me that many people in the area were trying to dump SUVs due to gas prices and they're having troubles selling them. The agent also confided to me that people were getting pretty stupid or desperate (keep in mind that Sacramento is housing bubble popping central) and trying to sell off expensive cars to pick up something cheaper to haul around. There were a decent amount of Corvettes in the lot. The agent also told me that a bunch of idiots.. I mean people... would try and trade in cars that were 10-30K underwater in and finance that into a new car purchasse. I dont know if that's something that's CA specific but that seems like setting yourself up for a lifetime of pain because you're stupid with money. I dunno, maybe theyre the smart ones, they get to drive fancy cars and have people like me bail them out when they cant pay up, assholes.

Anyhoo, my car was appraised at $3K (96 Integra, 97K miles, clean title), which is the low end of what I thought I would get, so it's not bad. All in all, a pretty painless and fast experience.

 

[ultimatebob]

Carmax appraised my 2003 Audi A4 3.0 Quattro for $8,900 last year, a full $3,000 under the KBB trade-in value of the car. Bastards! High mileage or not, that car was worth at least $11,000 at the time.

I ended up trading it in for $10,500 for at another dealership nearly three months and 5,000 miles later.

Edit: I should also mention that Carmax was selling 2003 Audi's just like mine in the lot for around $18,500. They didn't even have as nice of an option package as my car, but they did have about 20,000 less miles. I'm not convinced that 20,000 miles justifies a 55% price cut! I'll bet that they would have spent about $1,000 reconditioning my vehicle and sold it for $16,000 if I was dumb enough to give them the chance.

 

[Pacfanweb]

Originally posted by: ultimatebob
Carmax appraised my 2003 Audi A4 3.0 Quattro for $8,900 last year, a full $3,000 under the KBB trade-in value of the car. Bastards! High mileage or not, that car was worth at least $11,000 at the time.

I ended up getting $10,500 for the car at another dealership nearly three months and 5,000 miles later.

Did you sell it outright, or trade it? I'll bet you a steak dinner that if you traded, you didn't come anywhere close to getting 10,500 for that car.

Carmax is usually right on with their appraisals. If there is a difference, I've never seen a 3k difference.

KBB is almost completely worthless in the real world. All it does is result in pissed-off owners that think their cars are worth more than they really are.

It's great if you can sell your car based on the KBB, though. But unless it's some rare specialty car, a dealership will never give you KBB value.

The use the Black Book and NADA....plus, they use their own experience of what things are selling at the auctions for. It's likely Carmax knew they could buy cars like yours at auction for what they appraised it for.

 

[alkemyst]

Originally posted by: Pacfanweb

Originally posted by: ultimatebob
Carmax appraised my 2003 Audi A4 3.0 Quattro for $8,900 last year, a full $3,000 under the KBB trade-in value of the car. Bastards! High mileage or not, that car was worth at least $11,000 at the time.

I ended up getting $10,500 for the car at another dealership nearly three months and 5,000 miles later.

Did you sell it outright, or trade it? I'll bet you a steak dinner that if you traded, you didn't come anywhere close to getting 10,500 for that car.

Carmax is usually right on with their appraisals. If there is a difference, I've never seen a 3k difference.

KBB is almost completely worthless in the real world. All it does is result in pissed-off owners that think their cars are worth more than they really are.

It's great if you can sell your car based on the KBB, though. But unless it's some rare specialty car, a dealership will never give you KBB value.

The use the Black Book and NADA....plus, they use their own experience of what things are selling at the auctions for. It's likely Carmax knew they could buy cars like yours at auction for what they appraised it for.

QFT...also most people think their cars fall in the 'outstanding category...unless it's a garage queen chances are no matter how nice you think your car is in comparision to those around yours it's in the 'average' and at best 'clean'.

Obviously CARMAX needs to make a buck, so you aren't going to get the retail price for your car (unless it's something in major demand). The best price comes with a private sale usually, but that's a PITA dealing with tire kicker after tire kicker on some cars and low ballers on everthing else. Especially those that somehow think bringing you cash is somehow different than how you will end up being paid anyway. If anything you taking cash directly from them is a favor to them leaving not much of a real paper trail for it's value for taxes.

 

[Rio Rebel]

I am no expert on car sales, but I am completely convinced of two truths:

1. Carmax lowballs their offers.
2. None of the publicly accessible sources of trade value (NADA, Kelley, Edmunds, etc.) can be used as a consistent indicator of what dealers will pay. The dealer uses whatever source benefits him in the discussion.

 

[alkemyst]

KBB is the end all be all, a dealer used anything else is working price into the backend.

*Edit*...I am talking black book, not blue

 

[Rio Rebel]

Originally posted by: alkemyst
KBB is the end all be all, a dealer used anything else is working price into the backend.

KBB valued my 2001 Chrysler 300M at $5600. Carmax offered me $3600. Every dealership I visited except Saturn started me at around $3500 and they all quickly moved up to $5000 when I showed them the Saturn quote.

So between your last two posts, something isn't true. Either none of the dealerships will offer the KBB price without making it up on the sale price of the new car, or Carmax lowballs their offer, or both.

You can demand KBB all you want. But dealers don't consider the end all be all, so it's NOT the end all be all. You may get KBB, you may not, depending on the dealer and the car.

 

[ponyo]

Glad you had good experience at CarMax. The place is really like no other in the car business. I love their business model and the way they conduct business. Only time I personally dealt with CarMax was back in 2002 when I took my Boxster to get appraised. It was quick and painless and took about 30 minutes for the whole process. They offered me $32k. I declined and sold it for $36k to an individual couple weeks later after listing in Autotrader.

CarMax makes average of $2k on used vehicles they sell and $1k on new. They control about 2% of the total used car market right now but they're expanding fast and should have the double of the number of current stores in four years. By then they might have 4-5% of the total used car market. The opportunities are huge since the car business in the US is so fragmented with most owned by families and small groups in various towns and cities. CarMax has the opportunity to do what HomeDepot did for the hardware business and consolidate all the small mom and pop shops and smaller players in each market. I own shares in CarMax and plan to for a long time.

 

[Rio Rebel]

Maybe Carmax offers are better with more valuable used cars. Maybe my local Carmax is an exception. I just know my experience with them in Indianapolis was a waste of time.

 

[ponyo]

CarMax uses their own proprietary pricing models for buying and selling cars. These get updated via computers constantly 24/7 and changes depending on the how well the particular cars are selling and the going rate to acquire these cars. Trust me, their appraisers know what they're doing and they appraise lot of cars every single day in many markets.

 

[BarneyFife]

Originally posted by: Naustica
CarMax uses their own proprietary pricing models for buying and selling cars. These get updated via computers constantly 24/7 and changes depending on the how well the particular cars are selling and the going rate to acquire these cars. Trust me, their appraisers know what they're doing and they appraise lot of cars every single day in many markets.

We already hear the spiel. You own 2 shares and you give them handjobs in every thread.

 

[Rio Rebel]

Originally posted by: BarneyFife

Originally posted by: Naustica
CarMax uses their own proprietary pricing models for buying and selling cars. These get updated via computers constantly 24/7 and changes depending on the how well the particular cars are selling and the going rate to acquire these cars. Trust me, their appraisers know what they're doing and they appraise lot of cars every single day in many markets.

We already hear the spiel. You own 2 shares and you give them handjobs in every thread.

I have to agree. I don't "trust" their appraisals...what a load of crap.

I went to a Nissan dealership and a Hyundai dealership, and both of them offered me in minutes the same lowball offer that Carmax did. Then with everyone EXCEPT Carmax, it was easy to push them to over 50% MORE than that offer. All this is with NADA, KBB, and every major source I could find telling me the car is worth well over $5000 trade in value. Look it up yourself - 2001 Chrysler 300M.

Carmax does what every other used car dealership does - they try to get your car for much less than it's worth and sell it for more. To claim anything else is simply marketing or deception.

 

[Pacfanweb]

Originally posted by: Rio Rebel

Originally posted by: alkemyst
KBB is the end all be all, a dealer used anything else is working price into the backend.

KBB valued my 2001 Chrysler 300M at $5600. Carmax offered me $3600. Every dealership I visited except Saturn started me at around $3500 and they all quickly moved up to $5000 when I showed them the Saturn quote.

So between your last two posts, something isn't true. Either none of the dealerships will offer the KBB price without making it up on the sale price of the new car, or Carmax lowballs their offer, or both.

You can demand KBB all you want. But dealers don't consider the end all be all, so it's NOT the end all be all. You may get KBB, you may not, depending on the dealer and the car.

Were you SELLING your car to the other dealers, or were you TRADING it?

If you were trading it, then you DID NOT get what you think you got, period, end of story.

If you were simply selling it outright to them, that's another thing altogether.

 

[Pacfanweb]

Originally posted by: alkemyst

Originally posted by: Pacfanweb

Originally posted by: ultimatebob
Carmax appraised my 2003 Audi A4 3.0 Quattro for $8,900 last year, a full $3,000 under the KBB trade-in value of the car. Bastards! High mileage or not, that car was worth at least $11,000 at the time.

I ended up getting $10,500 for the car at another dealership nearly three months and 5,000 miles later.

Did you sell it outright, or trade it? I'll bet you a steak dinner that if you traded, you didn't come anywhere close to getting 10,500 for that car.

Carmax is usually right on with their appraisals. If there is a difference, I've never seen a 3k difference.

KBB is almost completely worthless in the real world. All it does is result in pissed-off owners that think their cars are worth more than they really are.

It's great if you can sell your car based on the KBB, though. But unless it's some rare specialty car, a dealership will never give you KBB value.

The use the Black Book and NADA....plus, they use their own experience of what things are selling at the auctions for. It's likely Carmax knew they could buy cars like yours at auction for what they appraised it for.

QFT...also most people think their cars fall in the 'outstanding category...unless it's a garage queen chances are no matter how nice you think your car is in comparision to those around yours it's in the 'average' and at best 'clean'.

Obviously CARMAX needs to make a buck, so you aren't going to get the retail price for your car (unless it's something in major demand). The best price comes with a private sale usually, but that's a PITA dealing with tire kicker after tire kicker on some cars and low ballers on everthing else. Especially those that somehow think bringing you cash is somehow different than how you will end up being paid anyway. If anything you taking cash directly from them is a favor to them leaving not much of a real paper trail for it's value for taxes.

Exactly. If you REALLY want to know what you're getting for your trade-in, I'll tell you: Most dealerships start at either "Rough book" or even slightly below.
Don't think your car should be considered "rough"? Consider that the dealership will likely spend at least 500 bucks checking it over and getting it ready to sell. Serviced, detail, etc. Even a nice car will be considered "average", at best.

Let's say that Rough book value is 10k, and Extra Clean is 13k. You think the dealership will give you Average or Clean for it? Why, so they can make 1000 bucks on it? And that's gross....minus the service/detail costs, commission to the salemen, sales managers, overhead, not to mention they pay interest on their floorplan, etc. Sorry, but it just doesn't work that way.
Occasionally, like maybe at the end of the month, you might get a too-high value in a trade situation, but by and large, Rough book value is what you get in reality.

Anyone who thinks their car should bring Clean or Extra Clean book, I'd say "go sell it yourself, Big Boy".

No dealership can survive making 500 bucks on each car.

 

[ponyo]

Originally posted by: BarneyFife

Originally posted by: Naustica
CarMax uses their own proprietary pricing models for buying and selling cars. These get updated via computers constantly 24/7 and changes depending on the how well the particular cars are selling and the going rate to acquire these cars. Trust me, their appraisers know what they're doing and they appraise lot of cars every single day in many markets.

We already hear the spiel. You own 2 shares and you give them handjobs in every thread.

While I don't own 21 million shares like Mr. Buffett, my 2,000 shares isn't chump change. Hopefully it will increase in value enough in the next 4 years to buy me a nice used car from CarMax.

 

[owlface]

My family and I have used carmax, 3 times. We bought one car and sold two cars to them. If you want to purchase a used a car, and want a headache free experince, they are hard to beat. Their prices are a little high, but you get what you pay for. We purchased a camry from them, the price was pretty fair, and a few months later it had small issue with a bushing in the rear right suspension. We called them up and they fixed it very quickly and free of charge that day. When I finish school, and probably buy a used car to replace my beater, Carmax will most likely be my first stop.

 

[DonaldC]

None of the dealers I know or do business with use KBB or NADA to value a used car. They check the Black Book and recent auction prices for trade-in value on any car presented to them.

 

[Rio Rebel]

Originally posted by: DonaldC
None of the dealers I know or do business with use KBB or NADA to value a used car. They check the Black Book and recent auction prices for trade-in value on any car presented to them.

Exactly.

 

[thecritic]

Originally posted by: Rio Rebel

Originally posted by: DonaldC
None of the dealers I know or do business with use KBB or NADA to value a used car. They check the Black Book and recent auction prices for trade-in value on any car presented to them.

Exactly.

Edmunds' car appraisal guide is fairly accurate. If you select the "average" condition for trade-in, the value comes close to what most dealers are willing to offer you.

Dealers like to use an auction software (name escapes me at the moment, starts with a m) that will tell them how much a particular car has been selling for lately at an auction. Some dealers on the east coast also use Galves, which is a paid subscription service.

 

[thecritic]

Originally posted by: Slew FootAnyhoo, my car was appraised at $3K (96 Integra, 97K miles, clean title), which is the low end of what I thought I would get, so it's not bad. All in all, a pretty painless and fast experience.

Actually, that's a fair price.

Like I said in my previous post, Edmunds' car appraisal software tends to give fairly accurate values.

I put in '96 Integra, 97k miles, 4 door, LS trim, Automatic in average condition for trade-in. It gave me a value of $2858. Sounds like Carmax is offering you a decent price (for a trade-in) IMO.

 

[GoatMonkey]

Back in about 1998 I had my last car appraised at CarMax. It was a 1993 Ford Probe GT. It had around 50k on it when it was appraised by them for $5500. 2 years and about 20k miles later I got rear-ended by some dumbass in a minivan, it totaled the car. The insurance company gave me $6800.

 

[alkemyst]

Originally posted by: Rio Rebel

Originally posted by: alkemyst
KBB is the end all be all, a dealer used anything else is working price into the backend.

KBB valued my 2001 Chrysler 300M at $5600. Carmax offered me $3600. Every dealership I visited except Saturn started me at around $3500 and they all quickly moved up to $5000 when I showed them the Saturn quote.

So between your last two posts, something isn't true. Either none of the dealerships will offer the KBB price without making it up on the sale price of the new car, or Carmax lowballs their offer, or both.

You can demand KBB all you want. But dealers don't consider the end all be all, so it's NOT the end all be all. You may get KBB, you may not, depending on the dealer and the car.

It's up to the dealership to get your car as cheap as possible. This is where negotiation plays in. Most will pay the black book price if you don't give in.

 

[Rio Rebel]

Originally posted by: alkemyst

Originally posted by: Rio Rebel

Originally posted by: alkemyst
KBB is the end all be all, a dealer used anything else is working price into the backend.

KBB valued my 2001 Chrysler 300M at $5600. Carmax offered me $3600. Every dealership I visited except Saturn started me at around $3500 and they all quickly moved up to $5000 when I showed them the Saturn quote.

So between your last two posts, something isn't true. Either none of the dealerships will offer the KBB price without making it up on the sale price of the new car, or Carmax lowballs their offer, or both.

You can demand KBB all you want. But dealers don't consider the end all be all, so it's NOT the end all be all. You may get KBB, you may not, depending on the dealer and the car.

It's up to the dealership to get your car as cheap as possible. This is where negotiation plays in. Most will pay the black book price if you don't give in.

You do realize that the "black book" and Kelley Blue Book are two very different things, don't you?

You're right - most will pay the black book price if you don't give in. None will pay the KBB trade-in price, unless they are making it up on the other end.

 

[cbrsurfr]

I'll never bother with Carmax again. They offered me $3000 for my car with 67K and tires/brakes within 1 year. The car had a door ding and a couple rock chips, otherwise in mint condition. Needed nothing to put it on the lot. KBB trade at the time was $6700, PP ~$7800, retail $9000. Carmax had a similar car on their lot with 10K more miles, no power drivers seat, no sport, and no convienence package for $10,500. I ended up selling it outright for $7500.

A buddy of mine from work also tried going to Carmax against my advice. He got offered $500 for his Grand Am. Sold it outright for $3500.

 

[dirtboy]

I love how everyone is crapping on Carmax for not giving them KBB for their cars. If you want KBB, sell it privately -- end of story. If you want to sell or trade it to a dealer, then you'll get substantially less, Carmax or anywhere else. So quit bitching. If you've ever purchased from Carmax, you'd already know how great they are.