CarMax stands out as one of the most prominent national players in the market today in the sprawling world of automotive sales and trade-ins. 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 also offer online car sales and home delivery or pickup from a local center.
Let's explore how the CarMax trade-in system works, the process, and whether 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. Essentially, CarMax is offering a well-resourced in-house car buying and selling network.
Buyers can find a vast range of thousands of vehicles that come guaranteed and certified from CarMax as being in good order regarding quality and reliability. Sellers have a fast and reliable channel to sell their cars and get paid quickly and with minimal fuss.
CarMax conducts a lot of its business online, especially in the wake of the COVID-19 pandemic. However, customers can still visit a physical store to browse and see cars for sale in their local area. For this article, 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 look online at various SUVs, trucks, crossovers, sedans, and coupes. They can also 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 to vehicles sold at $30,000 or above.
Sellers can enjoy a system that's both flexible and very simple to use. CarMax trade-in works the same way as its main selling channel but just adds an extra step to deliver a new car and collect 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.
CarMax's operation aims to make 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 considerably 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
The process is the same, whether selling your car on CarMax or trading in your existing car as part of a deal to get a lower price on a new vehicle. The first step is to get an offer from CarMax on your current car. You can do this online or through an in-person appraisal appointment. We'll deal with the online option first. All that's required is your license plate number or the 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.
According to CarMax, online offers are accurate and valid for seven 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 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 offer is dependent on an additional appraisal. With CarMax, the price you get online is final, and no further inspection is required unless you try to redeem the offer after it has expired (after 7 days). This is only false if a serious defect is found that wasn't reported, such as flood damage, body damage, or paint damage. 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 regarding customer flexibility, as big competitors like Carvana offer 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 selling a car to CarMax, whether part of a trade-in or not, will need to bring in several other 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 about their home state and particular circumstances with the vehicle in question.
CarMax maintains a substantial 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 mainly operate on an appointment-only basis. Therefore, get an appointment lined up before you go down there with your car. After inspecting the vehicle up close, they will provide an offer using the same online criteria.
That offer is valid for 7 days and won't require 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's 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 primary factors such as the year, make, model, mileage, and vehicle history report. The final amount that is paid depends on the vehicle being free of severe defects, including flood damage, body damage, and chassis damage. They will likely test drive it as well to verify the condition described. Most of their data and estimates are based on Edmund's information.
CarMax Trade-In: Most- and Least-Valued Cars
The process of a 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. Therefore, we can determine what kinds of cars CarMax will need to keep in stock and thus what they will favor. We'll summarize this data first and then try highlighting vehicles that CarMax tends to value more 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 F-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: 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 great deals when selling to CarMax.
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; in Illinois, it's the Jeep Wrangler. Lots of off-road enthusiasts are likely driving that demand in the Land of Lincoln, so good news if you're in Chicago with a Wrangler to spare.
There is no contest in the Southwest as it is all Ford F-150; this covers Texas, Oklahoma, New Mexico, and Arizona. The West is the same, with the F-150 getting the crown in Colorado, Utah, Nevada, Idaho, Oregon, and Washington. California is an exception, with the Honda Civic taking the 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 they will get a bad deal from CarMax. 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, the more in demand your vehicle will be with CarMax.
Next, let's turn to models that are less likely to get reasonable offers from CarMax. Newsweek reported the least-wanted cars through all of 2020. It's more than likely that CarMax will understand these market trends and adjust its buying policies accordingly. They won't want to overstock on the following cars with the estimated average days on dealer lots:
- Chevrolet Cruze: 169.3 days
- Fiat 500: 178.9 days
- Fiat 500X: 186.6 days
- Cadillac XTS: 186.7 days
- VW Beetle: 186.9 days
We can also estimate that cars lacking desirable features and vehicles that don't fit in with the most preferred types of cars in the top 10 list will be less desirable 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.
About the Company
CarMax is a large used car retailer in the United States. The company was founded in 1993 and has since grown to become one of the largest used car dealers in the country. They have over 200 locations in 41 states and offer a wide variety of makes and models at competitive prices. It is known for its no-haggle pricing and its large inventory of vehicles . The company is publicly traded on the New York Stock Exchange (NYSE) under the ticker symbol KMX.
The business was founded in 1993 by Circuit City Stores, Inc. as a pilot project in Richmond, Virginia. The company's original concept was to create a new type of used car dealership that offered a no-haggle buying experience and a wide selection of vehicles at competitive prices. This concept proved successful, and it began to expand rapidly. By 2000, it had opened its 30th store, and by 2005, it had opened its 100th store.
In 2002, Circuit City spun off the company as a separate, publicly traded company. Since then, it has continued to expand both through new store openings and acquisitions of other used car dealerships. The company has also expanded its offerings beyond traditional used car sales to include financing options, vehicle maintenance and repair services, and extended warranty options.
CarMax has also been recognized for its customer service and business practices. It was included in Fortune magazine's "100 Best Companies to Work For" list for several years and has been named to Forbes' "America's Best Employers" list.
In recent years, it has also been expanding its online presence by offering a variety of services such as home delivery of vehicles and virtual appointments. In 2020, they reported revenue of over $17 billion, and it continues to be one of the largest used-car retailers in the United States.
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