Buying a used vehicle through CarMax may be new to many people. Unlike traditional used-car dealerships, CarMax lists its vehicles online with transparent “no-haggle” pricing. They also offer a money-back guarantee and a limited warranty, among other things. But that’s not all!
In this article, we will discuss five facts you need to know about CarMax that may affect your decision to purchase through them.
What is CarMax?
CarMax is a retailer of used cars that operates as a subsidiary of CarMax, Inc. The company offers no-haggle prices on used cars and provides a variety of services, including vehicle appraisal, test drives, and financing. What’s unique about CarMax is that their test drive is for 24-hours and they have a 30-day return policy on most vehicles.
5 Facts You Need to Know About CarMax
Before purchasing a used car from CarMax, it’s important you understand a bit more about the company and its policies.
1. What is CarMax No-Haggle Pricing?
The “no-haggle” pricing policy is what separates CarMax from traditional used-car dealerships. At CarMax, the price you see online is the price you pay. There are no negotiations necessary.
The sales reps do not get paid commission and get paid regardless of whether you purchase a vehicle or not. This makes the buying process at CarMax much less pressured than at traditional dealerships. You can take your time browsing through the inventory and are not obligated to buy a car if you don’t want to.
2. Does CarMax Check Your Credit?
A full credit check is required when financing your vehicle through CarMax Auto Finance. You can get pre-approved using their online tool if you already know your scores, have a budget in mind and have a down payment. The pre-approval process only requires a soft credit pull and will not affect your credit scores.
CarMax works with multiple banks and lenders that accept most credit scores. Regardless of your score, you still get the same no-haggle price tag and guarantees that CarMax offers. This makes it possible for a wider range of buyers to purchase a car through them.
You can finance a used vehicle from CarMax with the following banks:
- CarMax Auto Finance
- Ally Financial
- Capital One Auto Finance
- Wells Fargo Dealer Services
- Bank of America
3. What Credit Report Does CarMax Use?
CarMax will pull your Fico, TransUnion as well as Experian credit scores when you apply for financing. The most important credit score that will ultimately determine whether you are approved or not is your Fico 8 score.
Don’t worry! You can still get approved, even with a score as low as 500, by following these simple tips:
Increase your down payment: The amount of your down payment will have a significant impact on your approval. A down payment of 20% or more will help increase your chances of being approved.
Get a co-signer: A co-signer with a good credit score can help you get approved when your credit history is too short. If you don’t have any credit history at all, this option may be your only way of financing a vehicle through any bank or dealership.
Improve your credit score: Work on improving your credit score before applying for financing. Sometimes all you need is a few points to get you into a higher approval bracket.
Choose a longer loan term: A longer loan term will help decrease your monthly payments, making it easier to afford a car. Keep in mind that you will end up paying more interest this way.
You can check out our Guide to Buying a Vehicle with Bad Credit for more tips and advice to help get you approved.
4. Does CarMax Accept Trade-ins?
CarMax accepts all trade-in vehicles in almost any condition. This includes junk vehicles and tow-ins (at your own expense). They provide a low-touch appraisal to give you an initial estimate of the value of your car. In some cases, the appraiser will require an actual test drive and a more thorough inspection before they write you a check.
This all sounds great on paper, but where is the catch?
The catch is that CarMax does not offer the best trade-in value for your car. In fact, they are often much lower than what you would get from a private buyer or other used car dealerships. This is because CarMax is more focused on selling you a car than buying your old one.
If you’re looking to get the most cash back, your best bet is to find a private buyer who will actually use the car. This can be difficult to do if you are not familiar with this process or don’t have time on your hands.
5. Will CarMax Buy an Upside-Down Car?
CarMax can make you an offer to buy your car even if you are upside down on your loan. You will still owe the bank for the remaining balance after they pay it off. This is an extremely risky move and not advised unless you need cash fast and can’t sell your car on your own.
CarMax is willing to purchase your upside-down vehicle even if you don’t plan on buying a car from them. This is a great option if you want to get rid of your car but don’t want to deal with the hassle of selling it privately.
Final Thoughts
CarMax is a great buy-here, pay-here dealership that works with sub-prime buyers every day. While not everyone is approved for financing, they offer an excellent no-haggle price tag and the option to purchase the car outright.
If you decide to buy at CarMax, you can either get financed through them or use your own resources. With the CarMax Advantage warranty package and 30-day return policy, there is little risk involved in buying a used car from this dealership. You will need to make sure that the vehicle has no frame damage for it to be accepted under the 30-day return policy.
No matter which way you go, CarMax is a great option and can be the best choice for car buyers everywhere!
