In the sprawling world of automotive sales and trade-ins, CarMax stands out as one of the biggest national players in the market today. Unlike their exclusively online competitor Carvana, CarMax offers brick-and-mortar locations that people can use to browse for new cars in something more in line with the “traditional” car buying experience. They do also offer car sales completed online, however, along with home delivery or pickup from a local center.
In today’s blog, we are particularly interested in how the CarMax trade-in system works, what the process is, and whether or not there are certain cars that CarMax tends to value highly and lowly. Are there any standouts that will guarantee a good deal? We aim to find out.
Background: How CarMax Operates
If you’re familiar with the “we buy any car” model or how companies like Carvana work, then you likely already know quite a bit about how CarMax works too. Essentially, CarMax is offering a well-resourced in-house car buying and selling network.
Buyers can find a huge range of thousands of vehicles that come guaranteed and certified from CarMax as being of a satisfactory order in terms of quality and reliability. Sellers have a fast and reliable channel through which to sell their cars and get paid quickly and with the minimum of fuss.
CarMax conducts a lot of its business online, especially in the wake of the COVID-19 pandemic, but customers do still have the option of visiting a physical store to browse and see cars for sale in their local area. For the purposes of today’s blog, we’ll focus on the online system more since it is fast-becoming the main channel through which people pursue buying, selling and trade-in options.
Buyers can go online and look at a range of SUVs, tucks, crossovers, sedans and coupes available for purchase. They can also choose to shop by brand if they have some firm idea of what they already want. Those on a budget can also search by price, with options ranging from cars under $10,000 up to cars sold at $30,000 or above.
Sellers can enjoy a system that’s both flexible and very simple to use. CarMax trade in works in the same way as its main selling channel, but just adds in an extra step of delivering a new car along with collecting the one being traded in. We’ll deal with the process in more detail in the next section. The company makes offers based on you first supplying either the license plate number or the VIN, details of its current registration and your home zip code.
In essence, CarMax’s operation is aimed at making both the car buying and selling process much easier, faster and less stressful. This is certainly in line with the changing trends between baby boomers and Gen X car buyers who favored the regular dealership experience and the “battle” of negotiating a deal, and Millenials and new Gen Z buyers who are greatly put-off by the traditional car buying experience and want something different. Next, let’s look in more detail at how the CarMax trade-in process works.
CarMax Trade In: How Does it Work? Process of Trade In
Whether you are just selling your car on CarMax, or if you are trading in your existing car as part of a deal to get a lower price on a new car, the process is actually the same. The first step is to get an offer from CarMax on your existing car. You can do this online, or through an in-person appraisal appointment. We’ll deal with the online option first. All that is required at first is either your license plate number or your car’s VIN, your current registration location, and your zip code. When you have these things, you can move forward to get your initial offer.
Offers made online, according to CarMax, are real and are valid for 7 days. During that time, customers can shop around to see if they can do better, or they can just leave it. There’s no obligation. It should be noted that CarMax doesn’t offer any kind of price-matching scheme with its competitors. All offers made online or in-person are both firm and final. There is no room for negotiation.
Some CarMax competitors only offer quotes rather than final offers and the final offer is dependent on an additional appraisal. With CarMax, the offer you get online is final, and no additional appraisal is required unless you try to redeem the offer when it has expired (after 7 days). The only time this is false is if a serious defect is found that wasn’t reported such as flood damage, body damage, paint damage, etc. This is checked quickly when the car is brought to the CarMax center to finalize the offer.
And so the process of trade-in with CarMax continues. Once you have an offer that you are happy with, we come to the point that CarMax differs from some of its competitors. CarMax currently doesn’t offer a collection service for trade-in vehicles. That makes it somewhat less convenient in terms of flexibility for customers, as big competitors like Carvana offer both in-person drop-off and home pickup services.
Once the customer has selected a car to purchase, they can then arrange for it to be delivered to their nearest CarMax center, at which point they can then drive the trade-in vehicle to the same CarMax dealer and complete the deal. This is the most convenient arrangement and involves the fewest trips to a CarMax center, but it’s not the only option.
Buyers could also complete a trade-in before they actually make a purchase for a new car if they want. CarMax doesn’t require a customer to be in the process of purchasing a CarMax vehicle while selling their trade-in vehicle. They can complete one step, and then the next in whatever time frame suits them.
CarMax Trade In: What Sellers Need to Bring
Those who are selling a car to CarMax --- be it part of a trade-in or not --- will need to bring in several additional things. In just about every state, you will require a valid, state-issued ID for each person named on the car’s Certificate of Title; a valid and current vehicle registration; any and all keys and fobs you have for the vehicle; and the car’s original title or payoff information (if you’ve just finished paying and don’t yet have the title with lien cleared). The CarMax website has further information on what to provide and tells buyers according to their home state and particular circumstances with the vehicle in question.
CarMax maintains a huge online presence and increasingly offers services catering to online buyers, but unlike Carvana, they haven’t made the final plunge to being exclusively online. Customers at CarMax have the option to do everything in-person in a way that’s much more reminiscent of the traditional car-buying experience.
Trade-in can also be completed by first getting an in-person consultation to determine the value of your vehicle. In the current business climate still guided and impacted by the effects of the global pandemic, CarMax locations mostly operate on an appointment-only basis. Therefore, be sure to get an appointment lined up before you go down there with your car. After inspecting the vehicle up close, they will make you an offer in the same way and using the same criteria that they do online.
That price offer is then valid for 7 days, and won’t require any additional inspection. You can also take it to a different CarMax if it happens to be more convenient, as long as the 7-day validity period has not expired. And that, in a nutshell, is how CarMax trade in works.
CarMax Trade In: How CarMax Calculates Trade-in Value
CarMax answers this question as part of its FAQs, and claims that values are based firstly on basic conditions such as the year, make, model, mileage and vehicle history report. The final amount that is paid is also dependent on the vehicle being free of serious defects including flood damage, body damage, chassis damage and whatnot. They will likely test drive it as well to verify the condition described. Most of their data and estimates are based on Edmunds information.
CarMax Trade In: Most- and Least-Valued Cars
The process of trade in at CarMax is pretty straightforward, but one other interesting thing people wonder about is what kinds of cars CarMax is most interested in. Are there brands and models that they favor more than others? Is there any type of car that is particularly in demand? In this next section, we find out more.
The good news is that CarMax is quite open about the demand for vehicles, and which are the best-selling models in different regions of the country. From this we can determine, therefore, what kinds of cars that CarMax will need to keep in stock and therefore what they will favor. We’ll summarize this data first and then try to determine cars that CarMax tends to value highly and lowly.
CarMax divides demand into regions, so let’s start with the Northeast. Data reveals that the four most popular cars in the Northeast region are the Jeep Grand Cherokee, Honda Accord, Ford -150 and the Dodge Ram 1500. As we can see, SUVs and pickup trucks are in demand here, so these are certainly types of cars that CarMax in this region will value greatly.
In the Southeast, there is one clear winner in every state except for Mississippi, which is the Ford F-150 pickup truck. In Mississippi, it’s the Honda Accord that sells best through CarMax. Owners of F-150 trucks (and Honda Accords in Mississippi) can expect to get great deals when selling to CarMax, then.
In the Midwest, the F-150 wins through again in most states. In Michigan, however, the Dodge Ram 1500 is the most sought-after vehicle. In Wisconsin, it’s the Toyota Rav4, and in Illinois, it’s the Jeep Wranglers. Lots of off-road enthusiasts are likely driving that demand in Illinois, so good news if you’re in Chicago with a Wrangler going spare.
In the Southwest there is no contest as it is all Ford F-150, and that covers Texas, Oklahoma, New Mexico and Arizona. The West region is the same, with the F-150 getting the crown in Colorado, Utah, Nevada, Idaho, Oregon and Washington. California is an exception for the West region, with the Honda Civic taking top position there.
So looking at things with broad strokes, it would seem that the Ford F-150 is really the vehicle to have, but also Jeep and Honda feature heavily in the list. Overall, their top 10 most wanted cars nationally are as follows:
- Ford F-150
- Dodge Ram 1500
- Chevrolet Silverado 1500
- Jeep Wrangler
- Ford Mustang
- Honda Civic
- Honda Accord
- Jeep Grand Cherokee
- Toyota Tacoma
- Ford Explorer
Those who don’t have one of these cars to trade shouldn’t despair and think that they’re going to get a bad deal from CarMax, however. There are also features identified by CarMax as being the most wanted by their customers. These include the following
- 4WD / AWD
- Leather Seats
- Third-Row Seats
- Rearview Camera
- Automatic Transmission
- Navigation System
- Heated Front Seats
Therefore, cars with these features --- and the more you have in one car, the better --- the more in demand your car will be with CarMax.
Next, let’s turn to models that are less likely to get good offers from CarMax. Newsweek reported back in May what the least wanted cars were in the US through all of 2020. It’s more than likely that CarMax will understand these market trends and they will guide their policies on buying. They won’t want to overstock on the following cars:
- Chevrolet Cruze - estimated average of 169.3 days in dealership inventory
- Fiat 500 - estimated average of 178.9 days in dealership inventory
- Fiat 500X - estimated average of 186.6 days in dealership inventory
- Cadillac XTS - estimated average of 186.7 days in dealership inventory
- VW Beetle - estimated average of 186.9 days in dealership inventory
We can also estimate that cars lacking in the desirable features, as well as cars that don’t fit in with the most desired types of cars in the top 10 list will be less desired by CarMax. The Top 10 is dominated by pickup trucks, SUVs and crossovers, with few exceptions. These will always be valued more, it would seem, than compacts and small sedans.