Never Buy a Car From CarMax


Rev up your engines,
today I’m going to talk about why not to buy a car at carmax,
now I’m a big advocate of buying used cars and carmax only sells used cars, but there’s
one main reason you buy a used car and that is to save money, and carmax their prices
are way too high, thousands of dollars more than you can find at many other places, I
had a customer a couple years ago bought a 5 year old car from carmax, it had 60,000
miles on it and they only saved $4,000 off of what a brand new one would of cost, I mean
really if you’re going to buy a car that’s 5 years old and has 60,000 miles on it, and
all your saving is $4,000 on a $25-30k car you mind as well go out and buy a brand new
one, so of my own customers they hated the prices, and I even met professionals that
said I don’t know how they do it at carmax, but they charge so much more for their cars
and get away with it, yes carmax is a big corporation, in 2018 net sales and operating
revenues of over $17 billion dollars, yes billion, so it’s a huge company, so they have
lots of cars, but there in lies a lot of the problems, those used cars have to come from
somewhere, they have to keep turning over and getting more and more, so obviously they
don’t know that much about the cars that their selling to you, that’s the big problems is
when you buy a used car you really want to know, where did that car come from and who
drove it, now I know that carmax sells cars that were previously rental cars cuz I had
customers buy them and have some problems with them, but when I tried to research what
percentages I was pretty much stonewalled, they don’t give much information on any of
that, it’s a secret company, I mean if people found out that, I don’t know what the figures
are but let’s say, 20% of the cars on their lot were rental cars, I made a whole video
on why you don’t want to buy a rental car, people drive the heck out of them, their not
maintained all that well, it’s not a good idea to buy a rental car and a lot of people
know that so their not giving any of that information out to the public, say you want
a car and their the only ones that have the one your looking for, first thing you want
to do is say, I want to see where this car came from, was it a rental car, was it a lease
car, by law they actually have to tell you that stuff, they can’t hide it from you, their
certainly not going to say it up front and say well this was a rental car, but by law
they got to tell you, so you must ask that, it’s the first thing I’d do if I was looking
at a car there, if they said it was a rental car I’d just walk, it’s their price or the
highway, if you don’t want to buy a car that you picked out at the price their asking,
they’ll say well we got some other ones on the lot look at that, that’s the price that
their going to sell it for, they are go big and they work in such massive numbers, that
they have all that stuff crunched down, and they don’t even go by stuff like the kbb value
they have their own valuation of cars, they don’t follow any of that stuff, they see what
they paid for and what they want their profit margin at, this is a big corporation all those
numbers are crunched down, you go to one see how many people work there it’s a huge place,
and being a small time guy like myself in my little garage, I know what big places create,
they create huge overhead, they got to pay for that overhead, if your buying cars from
them, your paying for their overhead, so they charge more for their cars to make profit,
as I said some people that are in the business say to me, scotty I don’t know how those guys
get away with charging those prices, but they do, well I know the main reason they get away
with it, and the main reason is this, most people these days don’t know that much about
cars, what their worth what kind of shape their in, so their selling to a pretty much
ignorant public, as I said previously I had a customer who bought a 5 year old car with
60,000 miles, and all he saved was $4,000 on a $25,000 car, heck you mind as well gone
out and bought a brand new one, but he didn’t know that until he brought it in and I was
working on the car a few months later changing the oil and just checking it out for him,
and I asked him what he paid for it and when I told him what he could have got a new one
for he just about slapped himself in the head and said, gee I thought I was getting a deal,
but no your dealing with a giant corporation, do you ever thing your going to get a deal,
these guys are pros, they buy cars and they sell cars, and they buy them low and they
sell them as high as they possibly can, and with $17 billion in sales last year, their
selling a lot of cars for a lot of money, for your advantage of a carmax I do have to
admit they have a very wide choice, because with all that money that their making they
have some intelligent people working there, they know which cars are popular, which cars
aren’t, so when they get a popular car their going to sell it for the highest price they
possibly can, if they got a 3rd tow suv they know people are looking for those their going
to get top dollar for it, really older cars they actually sell at auctions every once
in a while at their stores, but these auctions are only open to professional people that
are in the car business, so they might get a decent deal on a 8 year old car that’s got
120,000 miles that they don’t want to sell at their store, or I even had a customer trade
in this bad mercedes they had, at it was falling apart, $6k for the car I wouldn’t of even
given him $600, and I ask them and said, what are you gonna do with this mercedes it needs
all this work, they said we’re not gonna even sell it here in the US, we ship those down
to South America, down in South America cars go for a fortune, the like mercedes so they’ll
probably fix it up down there and get a profit on it, in the US if they would have fixed
it up and tried to sell it they would have spent so much money fixing it, it wouldn’t
have made any sense, these guys know how to make money there’s no arguing that, but being
a large corporation the guys are always trying to sell you stuff, when you do buy the car
there, they do the tax, title, license and they charge a premium for that, they don’t
do that stuff for free, and of course they try to sell you those extended warranty policies,
which is more profit that’s in their pockets, I mean it’s a big company, they make a lot
of money, if you think your going to get a really good deal from them, your living in
lala land, these guys are the white sharks of the car business, their the biggest used
car dealer in the US, your not going to get any kind of a great deal with them, now yes
it’s easy because they have stores all over the place, and if they have a store say your
in Houston and they got one in New Mexico that you want, they’ll ship it to you, now
you got to pay the shipping cost that’s not free, and they do have a rather wide choice
cuz their so large, and they do give a 5 day money back guarantee, if something weird happened
and you really got a lemon that passed though their check system, you will get your money
back, you are not going to get a good price, and the whole thing about buying used cars
is to save money, I mean if your only going to save a little money of a few thousand dollars,
you mind as well buy a new car and have the security of it’s brand new, it’s got the full
brand new warranty, I had a customer 5 years ago buy a carmax car, after big rain storms
which happened much after the 5 day warranty was over, he found out that the trunk leaked,
so I took it in to his body man and the guy said oh this thing has been wrecked that’s
why the trunk is leaking, I got to bend things back and re seal it so it doesn’t leak, so
they got a car that had been in a wreck, they didn’t tell him it had been in a wreck, but
it obviously had been in a wreck, things like carfax to check if a car has been wrecked,
their not that accurate these days, I’ve seen them where they were in big wrecks and there
was nothing on the carfax even customers of mine that had cars of their own in wrecks
and the carfax said no they hadn’t been wrecked and the knew it was wrecked cuz they drove
the car, your going to buy a used car you want to save a bunch of money, if your only
saving a little bit of money and your still taking the risk of buying a used car, buy
a new one instead then, and as most people who are buying a car are also getting rid
of their old car, they pay really low value on your car when you trading it in, as an
example I had a customer who had a car on the street the thing was worth about $10k
they gave him $5k for it, so right there, their making $5k, carmax’s asking price of
the car their selling you is higher than everybody else, their making $5k taking your car, and
their making at least 10% more than what the car is worth, that’s kind of an average of
the figures that I’ve seen but a lot of times it’s a lot more than 10% of what the car is
worth that their selling you, so it’s a pretty sweet deal for them, they pay you half of
what your car is worth if your trading it in, then they charge you 10% or more for the
car that your buying, no wonder these guys had $17 billion in sales last year, so know
you know if you really want to get a good deal on a quality used car stay away from
carmax, so if you never want to miss another one of
my new car repair videos, remember to ring that bell

Leave a Reply