Can you negotiate with CarMax?

Despite their so-called ‘no-haggle’ pricing, there is actually a way you can negotiate with CarMax to secure a better deal on your next vehicle.

You can’t barter for the actual vehicle's cost when buying through CarMax. Instead, you negotiate the back end of the deal. To do this, negotiate the interest rate that the dealer offers you, as it’s likely they’ve included a markup.

For example, the dealer may circulate your application to multiple lenders, with the best deal coming in at a 3% interest rate. However, the dealer may offer you an interest rate of 4, 5, or 6% and then pocket the difference.

How does CarMax work? 

Before spending hours researching vehicles at CarMax, take a step back and consider whether car ownership is even the right option for you. Nowadays, there are more ways to drive other than buying a new or used car. There's also a newer concept: a car subscription plan. Choosing this route means you don't need to be locked into one car. Drive the latest models for as little as six months, then return the car and pick a new one. Plus, everything — insurance, maintenance, roadside assistance, protection from depreciation, and more — are included in the monthly fee. 

And best of all: you don't need to be involved in the hassle of negotiating. Select your car and get approved in minutes online. The car will even be delivered to you free of charge. 

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If you've decided to move forward with purchasing, you likely feel trepidation when considering buying a used car. You might spend hours researching different car options online, test-drive countless vehicles, then negotiate a price as the salesman tries to pressure you into expensive upgrades and souped-up versions. 

CarMax has been around since 1993, and its aim from the start was to make car buying a stress-free process for everyone. To do this, they insist that the price of the car is final, with the idea of making the steps to buying a car hassle-free for both the customer and the dealership. Each CarMax dealership contains around 500 used cars, at most six model years.

To make the experience as easy and hassle-free as possible, CarMax has a few tricks up its sleeves. The experience begins online, where you can browse through thousands of used cars by filtering the make, model, year, and so on. Even if the car is out of state, you can request to have it transferred to your closest CarMax dealership. The next step is to take your chosen vehicle for a spin. If you like, just pay the price that’s advertised and drive away – no stress of haggling with salespeople. 

For peace of mind, every car goes through a rigorous testing process to ensure its roadworthiness and safety. There is even a short 30-day warranty included from the date of sale, although in Connecticut, it’s 60 days and 90 days in New York and Massachusetts.

To attract you further, CarMax will offer to buy your old car, whatever the state or condition of it might be. If, for any reason, it doesn’t meet the company's standard to be sold at a dealership, it will be auctioned off to other sellers.

Benefits of buying a car with CarMax

There are some key benefits to buying a car through CarMax, most notably the stress-free environment. Below are some factors to consider:

• More choice – If you go to a specific dealership, you are only faced with that company’s makes and models. Whereas with CarMax, you can try out a ton of different manufacturers all in the same place.

• Guarantees – You can buy with peace of mind, as CarMax guarantees that none of their cars has ever been a write-off or flood damaged. These are common with private car sellers, as they don't often list this information.

• As good as new – Thanks to the rigorous testing processes that CarMax employs, the vehicle you get has that new car feel, as they are thoroughly cleaned and serviced before going up for sale.

• Customer service – CarMax is becoming well-known for its excellent approach to customer service. It’s a totally stress-free environment for everyone, and many online have praised the staff for their commitment and professionalism.

• Sales tactics – Because CarMax has fixed commissions for its salespeople, there is no pressure on them to try and overcharge you for a car to make themselves extra money. This means you aren't hounded for any additional features or suffer from marked-up prices.

• Car history – CarMax is quite picky about the cars it will buy and sell, and they are so confident that customers are getting a high-quality item that they are prepared to provide them a free copy of the car report. This provides buyers with an extra blanket of security once they’ve made their purchase.

How to get the best deal at CarMax

Despite all the promising signs, CarMax does tend to have pretty expensive car prices, so you still might want to try and save some money here and there.

Most car dealers make their money from fixed operations like car parts and servicing – not actual car selling. This is especially true when it comes to selling finance and insurance, where the markup can cost you significantly. 

Below are some useful tips on how you can successfully negotiate with CarMax to save yourself some money:

1. Compare prices

As mentioned above, CarMax's pricing is usually much higher than a standard used-car dealership. So before you get drawn in by the commercials and positive feedback, be sure to check out prices at other dealerships nearby to try and secure a better deal.

2. Research interest rates

Some dealerships, like CarMax, will often submit your application to lenders and then add a markup on the actual interest rate. For example, you might qualify for a 3% interest rate, but they might advertise it to you as 5%. It's a cunning tactic that many dealers use, so always do your own research, or better still, get a preapproval before going to a dealership.

3. Warranty

If a salesperson tells you that for just $10 a month, you can get an extended warranty on that car you just bought, most people would snap their hand off. But actually, this price can also be negotiated, and the chances are the dealer has increased this fee. Although it might seem like a small amount, over the course of 6 years, that’s $720.

4. Trade-in your old vehicle

CarMax will buy your old vehicle from you, no matter what the condition. So this gives you a chance to negotiate the price and potentially secure a better profit on your used car. It's worth doing some research and makes collecting quotes from other dealerships beforehand.

5. Service and maintenance 

Should anything be wrong with the vehicle you’re buying from CarMax, make sure you tell them and ask if they can repair it before you buy or even if they can reduce the cost. You could even try asking them to throw in a set of new tires, as this could save you some serious money further down the line.

Are there other options for buying a car?

You might decide that this isn’t the method for you. Maybe you want a new car and don’t want to buy one due to the rapid depreciation. Or maybe you’re working on your credit or prefer to try different vehicles instead of being tied down with the same one.

If so, consider trying a FINN car subscription that takes that hassle out of getting the latest cars. With FINN, you can get your hands on a new car for six to 12 months, so there are no more long-term contracts and no complex financing options to worry about.

Pick the car you like, get approved, and schedule the delivery of your new car. Make just one monthly payment that includes the cost of driving the vehicle and insurance and maintenance costs.

Final thoughts

You should now have a better understanding of how buying with CarMax works. Despite the seemingly ‘set in stone’ prices, there are ways you can save some money and negotiate. Consider haggling the interest rate or even the trade-in value of your old car, should you have one. All of this adds up and can save you a small fortune further down the line.

For an alternative solution, consider a short-term car subscription with FINN, get your hands on a new vehicle for 6-12 months, and make one monthly payment that includes insurance and maintenance. Check out available vehicles.