Carmax opened its first dealership in 1993 and became a public company in 1997. There are currently well over 200 Carmax dealerships nationwide. Carmax is the largest used car retailer in the United States.  They are not in the new car market.

The value Carmax brings to the used car market is its low pressure, no haggle pricing. This solves a big problem for many customers who dread the high pressure haggle car buying process at traditional dealerships. 

Let’s take a look at how the pricing works at Carmax so you understand the costs before making a purchase.

Total vehicle cost

It addition to the base Carmax sales price of the car, you can expect to pay some additional fees. Not all will apply.

Shipping transfer fee: When shopping online or in the store, you can view any Carmax vehicle in the United States. Each of these vehicles is located at one of their physical locations. If the car you are interested in taking a test drive or purchasing is not in the car lot at your local store, you may need to pay a shipping transfer fee to move it between the Carmax locations. You pay this fee up front whether you decide to buy the vehicle or not.

For example, if the car you want to test drive or buy is in North Carolina but you are in Illinois, you would need to pay a shipping transfer fee to have the vehicle moved to your local Carmax store in Illinois. You can clearly see the fee on any vehicle you view online as the software knows your store location and the location of the vehicle. If the vehicle is at your store or a store that is close enough, there will not be a shipping fee.

Sales tax: Sales tax, if applicable in your state, will be added on top of the vehicle price. Since Carmax can sell a car anywhere, the tax isn’t calculated until the time of purchase when the state is determined. Sales tax will likely be the highest fee you will pay on your purchase. Some states don’t have a sales tax. Other states are in excess of 8%. That can make a big difference!  For example, if you buy a used car for $30,000 and the sales tax rate is 5%, you would pay an additional $1,500 on your purchase.

Other Fees

Title transfer fees: You can expect to pay a state vehicle title fee at your time of purchase. This fee could be $50 to $100 or more, depending on the state. This will get a title issued to you as the new owner of the car.

Service fees: Carmax typically charges a $199 service fee to do all the paperwork and processing of your car purchase. This fee could vary by location, but generally should be that rate. These extra fees are also called documentation fees or dealer fees.

Registration fees: You may also have a registration fee. This registers your vehicle with the state and gets you up to date with the annual renewal (if necessary). This fee can range quite a bit by state. Check with your state or Carmax location to understand what this fee will be.

Delivery fees: Carmax does offer the option of delivering the car to your home. This is most often the case for customers who choose to buy online and have the car delivered. The delivery fee is normally waived if you are located within 60 miles of the store. If further than that a delivery fee would be charged.

The Carmax experience

It’s no coincidence that Carmax is the number one used car dealer in the United States.

Their low pressure no haggle policy creates an experience for car buyers that is night and day compared to many traditional dealerships. 

They also offer an exceptional return policy. You have the earlier of 30 days or 1,500 miles to return the vehicle if you decide you don’t like it. It’s uncommon to see anything like that at most car dealerships. 

You can also sell your old car to Carmax. They will give you an up front price that is good for 7 days, whether you buy a car from them or not. You would likely get a higher price for your old car if you sold it to a private seller, but Carmax is offering an immediate offer and payment which is simple and easy.

With the generous return policy and very thorough 125-point inspection, you can feel pretty comfortable about getting a very good quality used vehicle. They tout that with their process you are getting a high quality vehicle that is fully inspected and reviewed to ensure it does not have any issues, including flood damage. 

This is a major selling point to Carmax customers. You don’t have to worry about getting a lemon or fighting with a dealer about getting a used car with mechanical problems.

You can see more about what Carmax has to offer on their website page titled Why-Carmax.

Some Carmax Cons

The Pros definitely outweigh the cons when it comes to Carmax in my opinion. However, there are a few challenges you should be aware of.

First, your used vehicle may have safety recalls that need to be repaired. Carmax cannot perform the recall service because the company is not affiliated with the manufacturer. Also, they don’t want to take their vehicles to the competition for repair. That leaves you with the responsibility to take it to an approved dealership for repair. There won’t be a cost for this warranty work, but it will take up your time. Note that you can determine this up front with any vehicle by typing in the VIN# on the NHTSA website and via ChecktoProtect.

Second, you are paying for convenience. For most it is worth it. However, you may find that your trade in value or the price of the vehicle you are buying, may be slightly worse than you could get in a private party sale or if you scoured the used car lots and haggled for a better deal. Carmax needs to make a profit so they will price accordingly. By comparing online with other dealerships you can decide if the Carmax price looks good or not.  Comparing to other dealerships online and using Kelley Blue Book can help you make the decision.

My Carmax Experience

I have purchased a few cars over the years at Carmax. The experience was very good both times.

In one case we bought a Honda Pilot that had a slight smokey odor in it. It was a good price and looked good, so we bought it. After a week of driving we decided the smell was more noticeable than we wanted. We contacted Carmax and told them we wanted to return it for another one with the same color and similar mileage. They said no problem. They found us a replacement that was almost identical in color and mileage, without the slight odor. We returned the old one and got a replacement. It was a very good customer experience.

Another time we bought a four year old Subaru Forester with just 10,000 miles on it. The price was good and we made the purchase. The car had an unrepaired safety recall that we took to an approved dealer to get fixed after our purchase. Not a big deal. We also had a Subaru dealer Service Center check out the vehicle. I asked them to see if anything seemed out of the ordinary as it was a four year old car with just 10,000 miles. They did a thorough inspection and said that it looked just like a car with only 10,000 miles on it! Good news.

In both cases we sold our old cars to Carmax. We got a quote up front before buying so we knew how much we were going to get. It was simple and easy and the price was reasonable.

Answers to other Carmax FAQs

In most cases you don’t need an appointment. You can just show up during their business hours, browse the cars in the lot, take a test drive, and ask questions.

They also offer the option to buy online and have the car delivered to your home.

You can buy the car with cash, use your own financing, or use Carmax financing. 

You cannot use a credit card for the vehicle down payment. The typical forms of payment would be a check, debit card, or bank routing and account information for an electronic draft on your account.

Typically you will get a vehicle history report from Carmax. If not, you can get one yourself with the VIN#, which Carmax makes available for all of their vehicles. Go to  AutocheckCarFax and / or in order to check the vehicle history. It’s another important piece of evidence that you need when doing your due diligence when acquiring a used vehicle.

To buy a car from Carmax you are required to show proof of insurance.

Carmax has a built in car payment calculator online where you can enter your credit score and down payment to get a general idea of your monthly payments.

Car Buying Recommendations

Keep your financing options open. Get your pre-approved financing up front to be able to compare options with what the dealer will offer. A credit union is a great place to get pre-approved. They tend to offer very good interest rates. 

You want to go into your purchase with an understanding of the total cost of ownership. In addition to the purchase price, the likely cost of future maintenance is an important factor. You could spend more up front for a more reliable brand, and save thousands over time due to reduced maintenance and repair costs, not to mention fewer headaches! Do some brief research on the Make, Model and Year of the vehicle you are considering to ensure it is not one that has high expected maintenance costs. Also be careful, as sometimes a good brand will have a bad model year. Knowing that up front will help you make your decision.

Two sources to get an understanding of the reliability and cost of ownership include YourCarMechanic and Consumer Reports. You can pay for a one month subscription to Consumer Reports online to get the information you need or read Consumer Reports for free at your local library.

Executive Summary: Does the Carmax no haggle price include tax and fees

  • Carmax is a great option for used car buyers who want a much better car buying experience
  • The advertised price at Carmax is the price, just as it would be at any retail store. No haggling.
  • The additional fees on top of the price you can expect to pay often include sales tax and other fees
  • Carmax offers a very generous 1,500 mile or 30 day return policy to ensure you are happy with your vehicle.
  • Your Carmax car could have an unrepaired safety recall. If so, be sure to get it repaired for free at an approved dealership.
  • Check your price against other sources to ensure your price is reasonable. Not all cars are a good deal.
  • I have bought a few cars at Carmax over the years with decent pricing and a good customer experience both times
  • Get pre-approved for financing if you need it to make sure you have financing options

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