CarMax provides a streamlined pre-owned car shopping experience that delivers more choices, greater assurance and increased convenience. That said, it typically comes at a premium.
So, is CarMax worth the extra expense? Keep reading for our comprehensive CarMax review.
Buying a Used Vehicle in 2023: Key Things to Know
The typical car payment in the U.S. has climbed to an all-time high — over $700 monthly ($716, to be precise), per recent Experian figures. While new vehicle sticker prices are beginning to retreat a bit (not by much), interest rates on auto loans remain elevated, offsetting those modest price reductions.
If you finance a new car with a $716 monthly payment, you’re shelling out $8,592 a year just on payments. Don’t forget to factor in rising insurance premiums, persistent fuel costs, routine maintenance and other charges like registration and annual inspections in some states.
With certain new-car deliveries still delayed by months, used cars remain an appealing alternative. Although pre-owned prices are high at the moment, they generally still save you a substantial amount compared with buying new.
However, used-car purchases come with downsides: buyers understandably worry about uncertain reliability, older tech and engines, shorter or expired warranties and fewer modern safety features.
The anxiety about inadvertently buying a “lemon” — a vehicle with hidden defects — is very real.
So what’s the solution if you want the savings of a used vehicle but distrust private sellers and many independent lots?
Shopping at retailers like CarMax or Carvana can be one answer. But is CarMax pricier than a conventional dealership, and how does the process work?
In this CarMax review, we’ll evaluate the advantages and drawbacks of shopping at the retailer and judge whether the extra expense is justified.
CarMax Review: Higher Price but a Smoother Purchase?
For this CarMax review, we examined vehicle condition, price relative to the market, the selling and buying process, the convenience of the shopping journey, online inventory, financing ease, warranty offerings and the overall customer experience.
Vehicle Condition
4.5 out of 5 stars
The primary reason consumers choose CarMax is vehicle condition. Every car goes through a rigorous inspection — over 125 checkpoints — conducted by ASE-certified technicians before CarMax will acquire it. Cars with flood damage, frame issues or salvage records are outright rejected.
If technicians identify potential problems, CarMax repairs them before placing the vehicle on the lot, often spending hours replacing components, repairing dents and scratches and performing detailed cleaning.
Some independent used lots also perform inspections, but not all are as thorough as CarMax. Because CarMax is a large, recognizable company, its locations are typically under corporate pressure to select and present only high-quality vehicles.
Beyond inspections, CarMax builds buyer confidence with extra protections. Shoppers can take a car home for a 24-hour test drive.
If you finalize the purchase afterward, you still have a full 30 days (or 1,500 miles) to determine whether the car meets your expectations. If it doesn’t, you can return it for a full refund.
Additionally, every CarMax vehicle is accompanied by a complimentary AutoCheck history report.
Pricing
2 out of 5 stars
If vehicle condition is CarMax’s hallmark, then price is its drawback. CarMax’s business model tends to sell cars above fair market value.
While it varies by vehicle, CarMax prices are typically $1,000 to $3,000 higher than comparable cars at many dealerships.
In exchange for that premium, you’re buying intangible benefits like convenience and peace of mind. CarMax also provides tangible advantages such as stronger warranties, a user-friendly website and programs that let you spend more time assessing the car before committing.
Selling Your Car
3 out of 5 stars
If you’re selling a vehicle, it’s worth submitting it to CarMax to see if their offer beats a dealer’s trade-in figure. Keep in mind dealers often pay retail-level prices while CarMax typically offers wholesale amounts; a dealer retail offer will generally net you more cash.
Even if the offer isn’t top-dollar, selling to CarMax is straightforward — and much of it can be handled online. You’ll need basic details like your VIN or license plate and registration information to get a valuation started.
Because CarMax’s inspection standards are stricter, cars in poor condition or with numerous issues may not sell to CarMax.
Convenience
5 out of 5 stars
CarMax has become one of the most convenient ways to buy or sell a car in the post-pandemic era. From the comfort of home (no need to change out of your pajamas), you can complete the entire purchase online — apply for financing, request a trade-in estimate and even arrange home delivery.
You don’t have to visit a local CarMax to pick up your car.
If you prefer an in-person test drive (a smart move), you can still complete most paperwork from home. And for buyers who like the traditional in-dealership process, CarMax staff are available at store locations to assist. There are 244 CarMax locations across the country.
Also, the absence of high-pressure sales tactics is notable. Sales associates are on a flat pay structure, so they aren’t incentivized to rush you or push you into a pricier vehicle.
Selection
4.5 out of 5 stars
CarMax offers the largest selection of used vehicles in the United States. Whether you’re working with a strict budget or seeking a specific model, CarMax often makes it easy to find what you want.
The online portal and mobile app are easy to navigate. Prospective buyers can enter down payment, target monthly payment and approximate credit score to produce an estimated budget, then browse only cars matching that range.
You can also filter by make, model or model year and set the maximum distance you’re willing to travel. The farther you’re willing to go, the more options will appear in your price bracket.
A downside of the broad selection: CarMax staff may be less familiar with the particulars of a specific vehicle. If you want highly informed sales help on a single brand, a specialty dealership might serve you better.
Financing Choices
4.5 out of 5 stars
CarMax lets you pay in cash or bring financing from your own bank or credit union. You can also apply for a CarMax loan.
In fact, you can get pre-approved online if you allow a credit check. CarMax doesn’t publish a clear credit score minimum — a minor shortcoming in our review — but buyers with poor or limited credit often can secure approval.
If approved, you can manage the loan through a CarMax Auto Finance account online. Still, it’s wise to keep shopping for competitive rates if you’re not satisfied with the offer. CarMax Auto Finance provides a simple three-day payoff option if you find better financing elsewhere.
Warranty
5 out of 5 stars
Every CarMax vehicle automatically includes a 30-day (1,500-mile) money-back guarantee — already better than what many other used dealers provide.
On top of that, there’s a standard limited warranty covering 90 days or 4,000 miles.
If you prefer longer coverage, CarMax offers the reasonably priced MaxCare extended service plan. Costs vary by vehicle and chosen coverage.
Nearly 4 million buyers have selected MaxCare since 2009, and it has covered more than $1.5 billion in claims. Plans are customizable, with deductibles starting as low as $50 and coverage spanning components like the engine, transmission, drivetrain, electronics and cooling systems.
Every MaxCare plan includes:
- Emergency roadside assistance
- Coverage throughout the U.S. and Canada
- Rental reimbursement for covered repairs
- $50 deductible discount when serviced at a CarMax Service Center or a RepairPal Certified shop
- No-contract cancellation with prorated refunds
Customer Experience
3 out of 5 stars
CarMax emphasizes a smooth, straightforward buying process. With no-pressure sales, a 30-day trial and the option to complete purchases online, CarMax’s customer experience is often superior to that of questionable used-car lots.
That said, not every buyer walks away satisfied. A quick internet search for “CarMax reviews” reveals reports of low-quality cars and complaints about pricing. While negative stories can be prominent, thousands of positive reviews also reflect the typical experience CarMax aims to provide.
CarMax’s scores on major consumer review sites have dipped, though. In mid-2023, CarMax held a 1.6-star rating on Consumer Affairs and a 1.5-star rating on DealerRater — a notable decline from more favorable reviews in 2022.
Ultimately, you’ll only know how you feel about the experience after dealing with CarMax directly. The benefit? You can buy and still return the vehicle within 30 days for a full refund if the experience disappoints — a promise few other sellers make.
Pros and Cons of CarMax
CarMax won’t suit every buyer. If your priority is paying as little as possible, private-party sales or independent used dealers might be better (buyer beware). But if convenience and a more comprehensive inspection are important, CarMax is a sensible choice.
Here’s a quick rundown of CarMax’s advantages and disadvantages:
- Higher-quality vehicles
- Robust extended-warranty option
- Largest selection of used models
- No high-pressure sales tactics
- 24-hour test drive
- 30-day/1,500-mile trial
- Complimentary vehicle history report
- Multiple financing choices
- 244+ locations
- Noticeably higher used car prices
- No bargaining on price
- Stricter requirements when selling to CarMax
- Lower trade-in offers
- Recent declines in customer service ratings
- Sales staff may lack deep product expertise
- No explicit credit score threshold for financing
- Transfer fees that aren’t refundable
Should You Buy from CarMax?
In the end, the choice between CarMax, other dealers or private sellers depends on your priorities.
If you value a straightforward online buying process, an expansive selection and a commitment to higher-condition used cars, CarMax is an excellent option.
If you’re unwilling to pay several thousand dollars more for those conveniences, CarMax is probably not the right fit.
Frequently Asked Questions (FAQs)
CarMax is ideal for buyers who want stronger warranties and better-inspected pre-owned vehicles. However, its prices are generally higher than many used-car lots, which may make it less appealing for bargain hunters.
CarMax does not allow price negotiation. The price listed is the price you pay. That removes the stress of haggling, but it can make it harder to find a vehicle within a tight budget.
Major advantages of CarMax include a huge selection, thorough inspections, a 30-day trial period, a comprehensive online buying experience and a low-pressure environment. The primary downside is the higher cost of vehicles, as well as added transfer fees.
