Complaint Review: CarMax

Maybe I am just good at finding deals, but I have sold cars to carmax for what I paid RETAIL...a 2000 Prizm with 20K in 2006 and a 98 Metro with 33K in 2003 and a 2000 Escort ZX2 with 36K in 2003. The Prizm was flawless, the ZX2 had had minor touchup work, but no wreck repair, the Metro was dented in a few spots but clean and low mileage automatic hatchback. They were always fair to me. They sold EACH car for $3000 MORE than I had paid for them...including tax and tag! I wish I could have done that with each car..then I would have had $9000 in the bank! At least I broke even.

Carmax did not attempt to steal anyone's car. They made an offer and the owner of the vehicle was free to accept or decline.

I doubt that Carmax would offer to pay KBB on a used vehicle, especially over the phone for an unseen vehicle. Why would they? They are a business and won't pay more for a vehicle than they think they will be able to make back after time, labor and cost.

Believe me, if you dealt in used goods you would do the same thing.

If you want more for your vehicle, sell it privately. You will take on the time and expense of advertising, keep paperwork on it current and lose God knows how much time showing it to people until a serious buyer comes along.

Or you can sell the car to a dealer for less than what you might have made, but without nearly as much headache.It's the owner's choice and either one is okay. Just don't claim that the dealer is stealing your car just because you didn't like the offer.

AHAHAHAHAHAH! You people amaze me. That is all.

I called CarMax in Sacramento/Roseville last week because I was skeptical that they would give me a reasonable value for my car since it was a 1993 Mazda Rx-7 with 140,000 miles but in great stock condition with almost new twin turbo ($5,000 including all other problems fixed, rebuilt (last month) transmission ($2600), motor in good shape as per specialist mechanic that replaced the turbo, etc., and the person I talked to after relating all of the information above said YES, they would be very interested in purchasing my car, please bring it down so we can look at it and appraise it. So I though well ok, maybe I was wrong and with the car culture down in Sacramento, they realized that it wasn't mainstream but could sell it for probably blue book after giving me a few thousand less since they would have to do hardly anything to put it on the lot.

So, I took last Friday afternoon off to drive it down there (I live in Grass Valley area about 45 miles away which is why I am selling it (not a mountain area car)), put it back on my insurance temporarily, and said hello. I showed them the car and related what I had been told and the rep. said all we can give for this car is an auction value (maybe $3000 or less - kbb is $10K if mechanically sound without the major restoration repairs I have made), we can't sell this car on our lot, and it will go straight to auction. I said, Why did you not tell me this on the phone? He just walked away and said, They should have. CarMax owes me time, gas, insurance, and a car wash. I felt they lied to me or at the very least were extremely misleading. I would not do business with them ever.

Maybe that's why:

Summary: The complaint charges CarMax and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CarMax is a nationwide retailer of new and used automotive vehicles. CarMax also provides customers with a full range of related products and services, including the financing of vehicle purchases through CarMax Auto Finance, the Company's own finance operation, and third-party financing providers; the sale of extended service plans and accessories; the appraisal and purchase of vehicles directly from consumers; and vehicle repair service.

The complaint alleges that, during the Class Period, CarMax was not meeting internal sales targets and was facing a 55% shortfall in its net income for first quarter of fiscal year 2009, later prompting the Company to suspend its financial guidance for the rest of fiscal 2009. According to the complaint, CarMax publicly issued materially false and misleading statements and failed to disclose: (i) that CarMax was not positioned to meet its sales targets or earnings objectives for fiscal 2009; (ii) that the Company had completed a refinancing of its warehouse facility which had materially increased the Company's funding costs; and (iii) as a result of the foregoing, defendants had no reasonable basis for their revenues and earnings guidance for fiscal 2009.

On June 18, 2008, the Company issued a press release announcing its financial results for the first quarter of fiscal 2009, the period ended May 31, 2008. The Company also announced that it was suspending its financial guidance for the rest of fiscal 2009. Upon this news, shares of the Company's stock fell $2 per share, or approximately 11%, to close at $16.34 per share, on heavy trading volume

Yeah yeah, KBB is all humbug and we mortals have no clue of fair market value.....

I have sold a few cars to Carmax and in one case the car was highly marketable and they knew the turnaround on it would be quick. In the offer they even presented me the KBB trade-in value printout to show me they were giving above KBB.

They do use it for comparison and when it benefits them. NOTE: you know they are "above book" when the sticker does NOT show a value versus KBB keep that in mind. My understanding is that expect your car to be valued between 3-4K less than KBB and thats what they will offer as thats what is built into most every retail sale.

Although another poster stated that the profit is not much out of that due to "expenses" I dont believe that at all. People are on a flat commision, the documentation fee's cover busness office expenses and the cost to "ready the car" for sale is minimal at under $500 IF THAT per car. They have all the services in house so no subbing out of any of the work is required. The profits are down for the company due to the economy and slow moving inventory for SUV's and other gas hogs.

What this customer has failed to realize is several things in relation to the appraisal process from CarMax. It is a service that provide a fair offer for a vehicle according to what it can be bought for at Wholesale price. This is completely seperate from retail or any kind of private party value. This customer must understand what market value is and also learn how to read between the lines.

Kelley Blue Book is a reference tool that is compiled with data drawn from traditional dealers with the trade in concept being influenced by a contigency of a customer buying another car in the process, which means the number can be adjusted and over-inflated. CarMax buys and sells cars under Blue Book value in most cases. In today's market, the Blue Books don't account for the current change due to fuel costs. Marketability is the key word we are looking for. I'm sure that word came across somewhere during the process.

Also, this is a Chrysler product we are talking about here. I'm pretty sure that this vehicle didn't break anyone's wallets when it was originally purchased, even brand new this car isn't worth a whole lot. There are TONS of them on the road everywhere you go and that is because they are cheaply made and cheap to buy.

Also, is a customer is truly reliant on Kelley Blue Book, they should get the trade-in value and also pay the retail value, which both are over-inflated to begin with. Don't claim to not like Kelley because of the retail value and then want the trade-in value...

I rest my case...

Doug, you make a good point about how the mileage of a vehicle affects its Blue Book value. Apparently it makes little difference in the Blue Book, but it does make a huge difference in real life.

For the record, I recently brought my vehicle to CarMax for an appraisal, knowing that they would give me a price substantially below private party value, but willing to take the loss if it meant not dealing with the pain of trying to sell a car on my own.

I was told by their agent that they would offer between 500 and 800 dollars for my car. Other dealerships offered me three times that amount. I ultimately sold privately for $2500.

I understand that there are variables at play here, but I would not recommend even wasting the time trying to sell your vehicle to CarMax unless you are quite strapped for cash. They wouldn't take trade-in vehicles from people not even purchasing from them if they weren't making a hefty profit from it. There's nothing wrong with making a profit, but as a person looking to sell your vehicle, you will probably find that a trip to CarMax is a waste of time.

Kelly offers what "she" thinks are relative prices, but has never bought or sold a car. A car is only worth what somebody is willing to pay for it.

A Kelly Blue Book tip: Type your car in with the actual miles in good condition. Then type your car in again with 200,000 miles in good condition. Try it at 500,000 and 999,000 miles in good condition to see the values change. They only change slightly or not at all. Don't you think value would change if a car had an additional half million miles?

KBB is used as a guide. It is placed on the web-site, so that you may get a general idea of what your car is worth. No where on their web-site does it state that they will buy your car at or above KBB.

Your car having 103,000 miles does not help it either. As for CarMax selling a similar vehicle for $8995....they would never have one with that many miles, so you where not comparing apples to apples.

If your car was SO great anyway you should have sold it on your own. This process is a service and you do not have to use their service. I am a shareholder of this company and understand it very well. I suggest you research more before complaining.

Let me make one thing clear CarMax does not lie about anything to the customer.

1. There is no where that it says we buy cars at kelley blue book.

2. Kelley blue book is a guide, nothing else. CarMax has bought cars above kelley blue book and sold cars below it.

3. Prices guides and car prices are inflated in most of these guides due to the ridiculous offers conventional dealers make to customers on some trade ins. They offer the customer more for their trade in and crank up the price of the one that they are buying.

4. Carmax gave you a free appraisal and made you an offer, and despite of your emotional outburst they stood behind the price of your car's worth. Now that is something! If they would have changed their minds, that would be lying(think about that.)

5. When was the last time kelley blue book bought a car? answer. Never.

6. When carmax buys a car at $6000 and puts it on the lot for $10000 it is not a $4000 profit. We inspect our cars and fix problems that are found, that believe it or not costs money, and then they have to get it detailed and that costs money and then there is the sales consultant and the business office work that goes into the car. And the profit is usually a fraction of what you would expect. And since carmax sells in large volume the margin of each car is much less than anywhere else.

7. So please do not call anybody a liar before you do some research, hopefully you had a good experience selling your car elsewhere.

Let me make one thing clear CarMax does not lie about anything to the customer.

1. There is no where that it says we buy cars at kelley blue book.

2. Kelley blue book is a guide, nothing else. CarMax has bought cars above kelley blue book and sold cars below it.

3. Prices guides and car prices are inflated in most of these guides due to the ridiculous offers conventional dealers make to customers on some trade ins. They offer the customer more for their trade in and crank up the price of the one that they are buying.

4. Carmax gave you a free appraisal and made you an offer, and despite of your emotional outburst they stood behind the price of your car's worth. Now that is something! If they would have changed their minds, that would be lying(think about that.)

5. When was the last time kelley blue book bought a car? answer. Never.

6. When carmax buys a car at $6000 and puts it on the lot for $10000 it is not a $4000 profit. We inspect our cars and fix problems that are found, that believe it or not costs money, and then they have to get it detailed and that costs money and then there is the sales consultant and the business office work that goes into the car. And the profit is usually a fraction of what you would expect. And since carmax sells in large volume the margin of each car is much less than anywhere else.

7. So please do not call anybody a liar before you do some research, hopefully you had a good experience selling your car elsewhere.

Let me make one thing clear CarMax does not lie about anything to the customer.

1. There is no where that it says we buy cars at kelley blue book.

2. Kelley blue book is a guide, nothing else. CarMax has bought cars above kelley blue book and sold cars below it.

3. Prices guides and car prices are inflated in most of these guides due to the ridiculous offers conventional dealers make to customers on some trade ins. They offer the customer more for their trade in and crank up the price of the one that they are buying.

4. Carmax gave you a free appraisal and made you an offer, and despite of your emotional outburst they stood behind the price of your car's worth. Now that is something! If they would have changed their minds, that would be lying(think about that.)

5. When was the last time kelley blue book bought a car? answer. Never.

6. When carmax buys a car at $6000 and puts it on the lot for $10000 it is not a $4000 profit. We inspect our cars and fix problems that are found, that believe it or not costs money, and then they have to get it detailed and that costs money and then there is the sales consultant and the business office work that goes into the car. And the profit is usually a fraction of what you would expect. And since carmax sells in large volume the margin of each car is much less than anywhere else.

7. So please do not call anybody a liar before you do some research, hopefully you had a good experience selling your car elsewhere.

Let me make one thing clear CarMax does not lie about anything to the customer.

1. There is no where that it says we buy cars at kelley blue book.

2. Kelley blue book is a guide, nothing else. CarMax has bought cars above kelley blue book and sold cars below it.

3. Prices guides and car prices are inflated in most of these guides due to the ridiculous offers conventional dealers make to customers on some trade ins. They offer the customer more for their trade in and crank up the price of the one that they are buying.

4. Carmax gave you a free appraisal and made you an offer, and despite of your emotional outburst they stood behind the price of your car's worth. Now that is something! If they would have changed their minds, that would be lying(think about that.)

5. When was the last time kelley blue book bought a car? answer. Never.

6. When carmax buys a car at $6000 and puts it on the lot for $10000 it is not a $4000 profit. We inspect our cars and fix problems that are found, that believe it or not costs money, and then they have to get it detailed and that costs money and then there is the sales consultant and the business office work that goes into the car. And the profit is usually a fraction of what you would expect. And since carmax sells in large volume the margin of each car is much less than anywhere else.

7. So please do not call anybody a liar before you do some research, hopefully you had a good experience selling your car elsewhere.

Hey Lew, The old saying is..."the Customer Is Always Right". Well...in this case you were the "seller" and CarMax was the "customer" ( you were selling them your car). Sounds to me like YOU provided poor customer service TO CarMax. Try lookin' at it that way.

Hey Lew, The old saying is..."the Customer Is Always Right". Well...in this case you were the "seller" and CarMax was the "customer" ( you were selling them your car). Sounds to me like YOU provided poor customer service TO CarMax. Try lookin' at it that way.

Hey Lew, The old saying is..."the Customer Is Always Right". Well...in this case you were the "seller" and CarMax was the "customer" ( you were selling them your car). Sounds to me like YOU provided poor customer service TO CarMax. Try lookin' at it that way.

After realizing the true value of his high mileage Chrysler Sebring, Lew decided to sell this car to Carmax for the original offer of $3,300. Enough said.

Provided it does not have over 110,000 miles on this sled they would retail it as a valuemax. Rules have changed...even with 4 painted panels they will retail it. Don't get me started. I could have a lot of fun tearing these guys down.

Your car had over 103,000 miles on it. Did you honestly expect to get much for your high depreciable American-made high-mileage vehicle? I did a search on the Carmax website for the same model vehicle, and the ones they are selling for >$8,000 have about one-quarter the miles that your's has!

Believe it or not, people are not going to want to buy YOUR car over one with fewer miles. Buying a high-mileage vehicle is considered a risk. Carmax does not even sell such vehicles on their lot, as they do not want to create unhappy customers by selling them your piece o' junk. They simply allow you to trade it in, and then ship it off to a used car lot somewhere, where the vehicle belongs.

If you really want more money for the car, why not sell it yourself????? It is not rocket science that selling one's car privately usually results in a better value.