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[Table] IAmA: We sell cars at CarMax, ask us anything

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Date: 2014-05-21
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What would you suggest to a mid-20's person who still has their little student car (like a honda civic that'll never die) that wants to upgrade just a bit? Lots of factors for this question, starting with budget. If you want to trade in your car and have a few grand to put down, that would be an awesome downpayment on a ~$20k car. If you're wanting to use that amount to just straight up buy a car... Keep yours til it dies.
Personally, my car still runs just fine and there's no real issues, it's just a 1996 model and the paint's coming off the hood. I have a few thousand I could potentially spend plus whatever I get from my car trade in (I believe the Kelly Bluebook value is around $2800). What kind of cars should I be looking at to make a slight upgrade? But, in the ~20ish range, as previously mentioned I really like the Nissan Maxima. If you like American made the new Ford Fusion is very nice, especially in the titanium trim package. Hell, the higher trim package Honda Accords are very nice too. Lots of options in that range, but I'd have to know a lot more about you, your financial situation, and what you want to give you a good, customer focused recommendation
Do your salesmen smell like they have been marinating their forearms at the perfume counter at Bloomingdales for a month? Personally, all of us contributing don't usually wear cologne to work. We do have one consultant that will about make you pass out every time they walk past with the overpowering smell.
Are they wearing suits like someone's Aunt just died? No suits at Carmax, thank god. Polo and khakis/shorts for most of us. It would suck working summer in a suit.
On average, is the average salesman's hair oiled more or less than the average block-piston of one of your cars? Again, for the most part no products for us answering. But again, there are culprits, and it's not a good look.
When your salesmen make your customers grab their socks on a purchase, is it just a little bump, or do they bang the customers heads against the showroom ceiling until there are head-prints? As much as I sometimes wish that was the case, we actually try are absolute hardest NOT to screw people. CarMax, as pertaining to both consultants and as a company, makes very little off each car sale. We just make up for it in volume. Also, commission isn't based on a % of the vehicle, so I don't care if you buy a $7k or $70k car - I'm making the same amount. Tl;dr light tap at worst, usually just a longing gaze.
Regarding the no-haggle pricing. If there is a car I want to buy from my local Carmax for almost $12,000, and KBB says a fair value of the car is only $9500, does that mean I can just offer you guys $9500 and you'll accept it or does it mean that you'll only accept the $12,000 listed price? It will be $12,000. KBB is a great place to start, but is by no means accurate all the time on car values. Same with when people say their trade in is worth X amount according to KBB. Honestly, probably 75% of the time people don't enter their info into KBB accurately, which exacerbates the problem. Don't even get me started on NADA.
I would venture that KBB is much more 'accurate' in terms of the actual value of the car than the dealer mark up price. I would venture that KBB data can be months out of date, doesnt take into account conditions like season/location that can have a large impact on value, can be affected by things like a dealer offering more for a car because it was traded in (they get their data from dealers), and when it comes down to it, KBB is an estimation of what you might get for your car. We are giving you a written offer saying we'll hand you a bank draft for that amount, today.
The most reliable, sporty car that your money is worth? Reliable and still being sporty in what price range? I'm gonna say probably something like a Nissan Maxima for the average person. The SV trim package had a ton of options (leather, heated seats, back up camera, Bluetooth, satellite radio, sunroof, navigation, Bose speakers), and the v6 puts out 290hp. Pretty quick, and the paddle shifters are fun.
I have to disagree. After having worked on 05-06 Maximas that had a transmission made by, what I assume, was the lowest bidding glass manufacturing company in North Korea I just can never recommend a Maxima to anybody. And they make them in my home town too :( Let me rephrase: newer Maximas. Also they do have CVTs (continuously variable transmission), which requires trans fluid changes about every 30k miles as opposed to the 80-90k recommended for most vehicles.
"Regular" Dealerships that are near CarMax generally will say, "We have already lowered our prices to compete with CarMax, we cannot lower them anymore." What is your take on that? My take is that we sold 522,950 cars last year, and regular dealers can't compete with us. We have the market cornered on well maintained, newer, low mileage used cars.
That being said you can get good deals on used cars that are outside of what Carmax sells (older than 2003 or over 130k miles). I bought mine from a small mom and pop type place and got a great deal, just have to know what you're looking fohow to bargain. The larger dealers that sell used cars though don't stand a chance.
I was told that you guys make zero bonus on selling cars. You just have to meet some monthly quota. How true is that? Does the quota ever go up or down? Seriously, no bonuses? Nope, no quota. We all work on 100% commission, we don't get hourly or a salary. We make a flat commission per vehicle, doesn't matter what we sell. I really like that as a sales person, so that when I make a recommendation it's something I feel is beneficial to the customer, not just trying to up sell for the paycheck. We can make a higher (flat) commission if we maintain high selling numbers for several months at a time, but you have to maintain that. Pretty much the harder you work the more you make.
Isn't the carmax model to not be like regular dealers? We aren't like other dealers! I wouldn't say that's our entire business model, although we definitely do put the customer first and try and make the car buying experience as simple as possible so.. maybe it is haha.
What would you say is the ratio of people who look online and pick what they want and buy that vs people that come to the lot? I would say about 70% of my customers have at least done some kind of research online before they step foot in the store. And then of course we've got people that come in and just want to walk the lot/kick tires, since we don't force you to be accompanied by a sales consultant at all times like most dealers. Also all of our vehicles are unlocked so you can get in them and check em out without us there, which most people seem to love.
Do all the cars have a sticker price? Yes, all vehicles have the year, make, model, mileage, features, and price clearly printed on the sticker.
Is there any way to get below sticker? No way to get below sticker unless you work here ;)
Are you familiar with Doug DeMuro's reviews of CarMax's warranty program on Jalopnik? Is so, what are your thoughts on his reviews? Do you find the warranty to be a good value? Great question. I hadn't heard of his reviews until just now actually and went and read them.
In my opinion, maxcare is the best extended service plan in the business, period. It covers more, costs less, and is extremely up front about what is and is not covered. Personally I sell maxcare at about an 80% clip, but even company average is over 60%. You'd be hard pressed to find people buying another extended service plan at that frequency. When my next vehicle comes from Carmax, I will definitely be purchasing it.
My concern is the constant fight with the dealer about what is a "wearable part". That makes me never want to buy into a warranty. What's the point if you aren't going to fix it? Maxcare is very clear cut on what it does and does not cover. As in, lists exactly what it doesn't cover, and anything not listed will be covered, period. It's extremely easy to understand
True that when you buy a car to be re-sold, one of the first things you do is put new tires on it and sell the old on the used-tire market, even if they're almost new? Good question, definitely not true. The state requirement for tread depth varies; in our state it is 2/32nds of an inch. CarMax doubles that to 4, and it is RARE to see tires that worn on cars we plan to retail. We will only replace tires if it doesn't meet standards; I've sold a car that's tread was right at 6/32nds before.
Do all CarMax's have ridiculous quantities of Porsche Panameras or is it just my local one? Just the local one. We have a lot of... Fiestas? :/
Sounds like a festive work environment. But seriously, at least 15 Panameras on site. I'm gonna guess you either live in California or Florida
Any idea why there isn't a carmax store in New Jersey? No idea. But Carmax expands every year, maybe soon! Us worker bees aren't usually privy to that type of info until it's imminent.
Also would it be difficult to buy a car from you guys out of state and then register it here? (New Jersey) Not hard at all! You will simply pay your state sales tax at time of purchase, which may differ from the one you purchase it in.
Lastly, how is the extended warranty price determined? Our extended service plan, maxcare, is priced entirely by the vehicle it is covering. Simply put, a newer, lower mileage vehicle will be less expensive to cover than a comparable older one. Further the cost of fixing the vehicle is taken into account (BMW is more expensive to fix than a Honda), and what kind of reputation the vehicle has for needing repairs. The best deal is usually on Honda, Toyota, Nissan, Mazda, Kia, Hyundai. The absolute worst? SmartCar. We sell them for around 10k and the service plan is something like 5-6k, because they do not have a great rep and they're expensive to fix a lot of the time.
That what I was hoping for. You guys sell warranties for some silly silly cars. I'm going to take advantage of that when my lease is up. [edit: and by silly cars I mean things along the lines of BMW //M5 and Audi RS anything. ] Honestly, even on those cars I would take maxcare if I was the one buying it. I have owned an m3, and I have paid to fix it. Literally use the plan once or twice and it's already paid for itself. Good luck finding a car after the lease is up!
What car would you recommand as a pussy magnet? C63 AMG. Big fan. Link to www.carmax.com
I need something with AWD though. Currently I have a g35x. It fairs well. I got you. Porsche 911 turbo: Link to www.carmax.com
Or Audi S5: Link to www.carmax.com
It's kind of offensive that they had to stick the CarMax logo on the rear decklid. It's on every one of our vehicles. It's really easy to remove though!
What's your worst type of customer? From a fellow consultant: Typically, when that shiny, clean, 2011 Ford F250 Superduty pulls onto the lot we all cringe. Truck clients have gained a stigma for being the most unrealistic customer that steps foot into our dealerships. "I want a 2013 Silverado 1500 with no more than 20k miles for under $15000"... Yeah, so do we all. Take a hike champ.
Couple answers. First, people that come in having done (bad) research on what their car is worth, and blast me when they don't like the realistic value of what their car is worth. Again, NADA is the worst.
Next, people that come in really wanting to bargain and get offended when I tell them we have no haggle pricing - we advertise the heck out of it, you'd think they'd already know.
Finally, people that are extremely unrealistic about pricing. They want a car under 10,000 miles, newer than 2013, with leather and a sunroof, and it needs to be under $10,000. Sorry dude, we sell used cars not unicorns. Those are also the ones that will call back after the fact to tell me they found that at billy bobs used cars, only to later find out it has frame damage.
How would you recommend people keep from rolling debt from one car into the next? Would you say that the best option is too buy a car with cash in hand and drive it for as long as possible before trading it in? Pay it off before you sell it. Or at the very least, pay enough such that your car is worth more than the payoff. Rolling negative equity isn't the worst ever, but make sure whatever you roll it into will be something you want to keep long enough to pay off. And get GAP insurance for sure if you are rolling negative.
Okay. Just want to make sure that I am on the right track now. I rolled negative equity through multiple cars and ended up with a 35K brand new GTI (10K over sticker, dumb i know). Well I have paid off the car and the extra debt and now I have a 2012 GTI with a lil work into it. I assume the best thing to do at this point (financially) is drive it until the wheels fall off? Financially, yep. Definitely.
What demo are you currently driving? Demos are only for managers and sales consultants that are selling at the highest level/have been with the company a pretty long time. I'm not a new hire, but I definitely haven't been here long enough to qualify for a demo :/ My manager was rocking a Cadillac CTS4 earlier.
Sad...I was disappointed by the choice in demo of my recent CarMax sales guy...a Buick Enclave. Not that it's bad, but so many better choices. Yeah, enclaves are nice enough on the inside I guess, but definitely not what id pick. They do have price constraints on what they can demo though, so you won't see anyone working at Carmax demoing something insanely expensive haha.
Is there anything you can suggest doing last minute to a car before bringing it in to sell? Sure. I'm not an appraiser, we actually have a separate department for that, but I entepresent appraisals to customers so I'll give you what tips I can.
We tell customers that as long as there's no damage/nothing wrong that the appearance of the vehicle doesn't matter, and maybe sometimes it doesn't. But in my experience if you get all your crap out of the car and give it a wash, you might get a little extra (think hundreds, not thousands). You wouldn't belief the disgusting vehicles people bring in - it's always nice appraising something that doesn't look like a family of hoarders uses as their trash bin. Also, our appraisers will drive the vehicle a short distance to make sure the tranny/engine are ok, and putting them in a grossed out or bad mood from all your crap will not help your cause.
Tips on bargaining on a car? Absolutely! The best tip I have: don't bargain. Come to CarMax, we do no haggle pricing on vehicles so you always know what the lowest price is up front ;)
Edit: just to be clear, we just don't bargain. Most customers hate that part of car buying and never know if they could've gotten a better deal. Since we eliminate that and are extremely transparent in all of our associated car buying costs, customers can know exactly what they're getting for exactly how much up front
I never knew carmax had the no haggle policy. Next time I am looking for a car I will definitely check them out. I hate the negotiating part and if I can get the same deal or pay even a little bit more not to deal with it at carmax I would buy from you. Yep that's how it works! We have a gigantic sign inside that says "the way car buying should be," and it's true!
A few months ago I was looking to buy a car from Car Max "No haggle" the obviously let me walk because i wanted to talk it for lower. I ended up going to an official dealer and getting the same type of car 2 years newer and less miles for about 3k cheaper. Do you really think the "no haggle" thing is worth it? Unequivocally yes. We get a lot more customers than we lose off of no haggle pricing. And yeah, we won't ever haggle with you. If we haggle with one person, we're just lying to everyone else, and then what else would we lie about?
Thoughts on the 2013/2014 Kia Optimas? I'm thinking they're my best "next car" after having my '98 Toyota Tacoma for the past 12 years. (2nd owner). What are some best alternatives? I think the Optimas are AWESOME. Kia and Hyundai give you a lot of car for what you pay vs a lot of other brands. Satellite radio, bluetooth, and heated seats are very common options even on base models. Especially at carmax - hell, we had a 2013 with 9k miles, hybrid, good options, for 19k. Hell of a price. Equivalent to the Optima, check out the Hyundai Sonata (Kia and Hyundai are the same company). Other than that, you're probably looking at paying a little bit more for an Accord, Camry, or Maxima.
On a different tangent, maybe look at the Ford Fusion or Chevy Malibu. The newer American made cars are much nicer than people are giving them credit for, and because of the American auto industry's poor rep the past few years they are also selling cars at less than they probably could be. I would feel comfortable buying either vehicle.
How can your company sell a used 2010 Ford Ranger for $19,000 with say, 30k on the odometer, all the while knowing that the consumer can walk across the street and get a brand new Toyota Tacoma for $18,000. Do car companies realize this is frustrating for the consumer? Kind of hard to reply appropriately without actually seeing the comparison, but a quick search on the Toyota website and Carmax.com shows me that if you're getting a Tacoma for 18k, it is absolutely base model, 2 door, 2 wheel drive, and that Rangers in that price range tend to be crew cab 4wd. So that's an apples to oranges comparison.
But also, like I said, you can get good deals at other places sometimes, we aren't always the best. You also have to live with the fact that when buying new, you lose about 15% of what you just paid as soon as you drive off the lot.
How often are you the best? I don't know if I could give a really accurate percentage, but I would very confidently say more often than not. Personally I'm just not an advocate of buying new, and will always buy used (I thought this way before working with cars/at Carmax). As mentioned before you just lose too much after driving off the lot, and it's a lesser amount buying used. Plus you can get more car for the same amount of money. It's just a win-win.
What do you know about what they do when they buy a car? If something happens to a car that you sell does it come back? How often does that happen? So actually, one of the really awesome things CarMax does that I'm not aware of anyone else doing - you have 5 days to bring back the car for any reason whatsoever. Hell, you don't have to have a reason, bring it back within 5 days and you get all your moneydollars back. After that, we also give you a 30 day limited warranty which will cover anything wrong with it in that time period, and obviously if there's factory warranty or you purchased maxcare that goes into effect after. I've only probably had 3 returns in the past 3 years, and 2 of them were old people that their children forced them to stop driving haha.
Say I'm looking for a decently specific truck and having a hard time finding one. What options do I have in regards to finding one from you guys? Talk to your local sales consultant and tell them exactly what you want. Chances are we can find it for you; we have 42,000 vehicles in our inventory. If we don't have it currently we get new vehicles in daily, we can build a vehicle search and continually look until it's found. I just spent 2 months finding a guy an almost new SRT8 Challenger in Plum Crazy Purple. Was the only one in the country we had when it popped up, and we had it shipped up here. Depending where the one they find is, you may not even have to pay to transfer it!
What's your pick for a good entry-level luxury sedan, both used and new? Entry level? Probably something like a BMW 328 or Acura TSX. Next step up just go to the 335, or Mercedes C300. For even more affordable, the VW CC Lux is pretty nice
I have not had a great experience with TSX. I think Acura sacrifices a lot of quality for that particular model. Plus frequent brakes issues are apparently a known problem in recent years. The MDX and TL are different stories. Actually I'm glad you said this. I was thinking TL and typed TSX. Yeah, I'd also go with the TL.
We have the 04 TL. I hate the way the newer gen TLs look. What's your opinion on the 04-08 TL vs new gen TL looks? I like all of em :/ the newer ones are different but still really nice, and fun to drive.
Is there any interest in selling things that are not cars? Tanks, helicopters, warthogs, etc. Any interest personally? Sure why not. Sales is sales, doesn't really matter what it is. Now that you mention it.. I'll sell the hell out of airplanes or yachts, that sounds awesome! Tanks too.
Did you guys go out? Nooope. She was... how to put it delicately... Larger. And had a kid that was like 8. Easily one of the most awkward conversations I've ever had.
Can you guys leave us the f*ck alone when we go in there? You have the store designed to make it impossible for someone to just go in and browse. I ended up buying my car somewhere else because your salesman wouldn't let me just take 10 mins to look around. That's pretty weird. I mean yeah, we have the store set up such that you need to walk through it to get to the lot, but we let people browse all the time. The only reason we do that is so that everyone gets talked to so we can at least ask if they do want help. I can't tell you how many people will go hop the gate, and then come inside angry because nobody came outside to chase them down. But personally, and I can speak for all of us contributing - if a customer wants to browse, we'll definitely let them. We'll just check in every 10-15 mins to see if we can help out. Sorry you had that experience, but congrats on the new ride!
Glad you guys are here. Great ad pitch for you, and I learned about a possible way to get my next car. Looking for a fun SUV in the 35-45k range with low miles. I am currently looking at GC or 4Runner. Thoughts? Well... you're talking to a guy that drives a 4Runner, and I am hugely biased. So go buy a 4Runner.
Seriously though, 4Runners are AWESOME vehicles. They're pretty much indestructible, get fantastic MPG for a vehicle that size, are extremely off road capable even bare bones stock (you are getting 4wd, ARENT YOU?), and they have a party mode button. Whats that you ask? A "party mode" button you say? Yes dear friend, I said party mode button. The newer 4Runners have a button, clearly labled with PARTY MODE that turns on the amp/sub and makes your speakers sounds better. Total gimmick, and I love it.
In actual mechanical sense, Toyota knows how to make a truck/suv. They make great cars too, but especially trucks and SUVs. Anecdotal evidence: we appraised a 2007 Toyota Tacoma with 950,000 miles. ON THE ORIGINAL ENGINE. Yeah, apparently all this person did was drive, but seriously - almost a MILLION miles on one engine. If that isn't a testament to quality, I'm not sure what is.
If you have any other specific questions about 4Runners/Tacomas I'll be happy to answer!
950,000 miles on an 07?! WTF did he get for it? $0.99? We told them to take to it Toyota because that had to be some kind of record haha.
I think Toyota might use that person's story and car as a marketing ploy and perhaps give him a new Toyota for free. That's what we said, and I sincerely hope so!
What do you all like to do for your free time? In the state I live, I go hiking in the mountains and take pretty frequent beach trips. But I mean other than that, normal stuff I guess? Haha I play league of legends with buddies, and we go out together pretty frequently to toss a few back. Some days it's a necessity after certain interactions haha. After a good pay period we will go hard.
But the reality is that CarMax still needs to make a profit/commission for every car sale so with the "no haggle" the cars aren't really priced at the lowest possibility because CarMax still needs to make money which is fine but without the haggle how can a buyer really be getting the "BEST" deal? Best deal as compared to the competition. You aren't buying a car from a dealer at cost, no matter how good you are at haggling. Also, Carmax makes a smaller profit margin than most dealers, but we make up for it by selling a LOT of vehicles. Both as a company and as individual consultants, we make our money in volume of sales, not big margins on each sale.
Can I buy a car from you using Bitcoin? Oh man I hope so. Never heard that question. I'm not at work but I'll find out
I'm test driving what my become my first car purchase on Saturday. No CarMax near me, I'm afraid. The Carfax report indicates that this vehicle was involved in a minor accident some time ago, and (apparently) as a result, the dealer is offering it for $17k instead of the KBB value of ~$25k for the same car in pristine order. This dealer has a good reputation, but even so, what can I do to make sure that the damage has been properly repaired? If you have a mechanic friend I would take them along to look at the vehicle, or ask the dealer if you could take the vehicle to an independent mechanic for inspection. That sounds a little fishy to me.
Usually a price drop that drastic would indicate frame damage to me, aka damage to the skeleton of the vehicle, which will greatly impact the value of the car. Unfortunately, carfax doesnt report everything, and while autocheck (what we use, very similar) reports twice the incidents carfax does, its not foolproof either. Definitely take along someone that knows what they're looking at. If you don't know anyone, try and get under the car and look for spots along the frame lines that appear to have been welded. Don't forget to open up the hood and trunk and check those frame rails too.
Let's say I'm looking to sell/trade-in a 2001 Lexus IS 300 at the end of the year to get a new car. It looks great and runs fine, but the catalytic converter needs to be replaced. How much lower would the value of it drop? Or would you not even consider purchasing it? Would I be better off trying to sell it myself, selling it to Carmax, or trading it in with the dealer I'm buying the car from? Go get a quote from the dealer you want to buy a car from, then go to carmax and see what you get. If it's better, take it, if not, then go back to the dealer.
This is the first I've heard of CarMax. Is there a different process for selling to Canadians? Or are you even allowed to sell to your brothers north of the border? I am 100% sure you could come to the US and purchase a vehicle, although I'm not sure how sales tax/registering the vehicle would work. I was fairly certain we had some CarMax stores north of the border, but I may be mistaken on that one.
Plans for carmax Canada? Please? I thought we had CarMax in Ontario = maybe I'm wrong, I'm a pretty long ways from Canada so I may be ill informed
Is it true you get paid on fixed commission? Does this also mean you have a fixed gross margin? Yes we do get paid on a fixed commission. Lots of positives in that, for both the salesperson and the customer.
As far as I can tell, there isn't. Just dealerships using the Car Max as their name. Doh. Sorry guys. Hopefully soon!
Why buy an used car when i can lease new car + get a new one for free every few years? Because when you lease a car it's never really yours. You don't own that vehicle. That's like asking why buy a house when you can just rent the rest of your life? As someone with a paid off vehicle that doesn't have monthly car payments to deal with, it's a really nice feeling! And even better knowing that when I want something new, I have a few thousand of positive equity to work with.
People tell me that selling a car to Carmax is the easiest thing in the world since you guys literally buy anything and give pretty good money for it. What's the policy on cars with mechanical problems (in my case, coolant issues that I don't want to drop any more $$$ on getting it fixed)? We will buy literally any car. If it has mechanical problems, if you come in and we can identify it or you have documentation showing whats wrong, our buyers will look at the vehicle, assess what the price would be fully operational, and then subtract our cost of fixing it, pretty straightforward.
I recently had a 2003 Honda Odyssey appraised and apparently the drivers side door was not the original and we never had an accident. How do you guys find that out? For a door its pretty simple, they will have a VIN number matching the vehicle's VIN, and apparently your door didnt match. also, the appraiser will check for rough paint (evidence of recently painted, overspray) and things like that to tip them off
Just wondering, do you mind taking someone for a test drive, even if they no intent on buying the vehicle anytime soon? I am very curious about a certain car, but cannot afford it anytime soon... thanks... Nope not usually, unless the person is particularly strange or wastes a ton of time. Even if you're not planning to buy for awhile I'm usually very happy to help in any way I can.
Strangest customer interaction, GO. From a fellow consultant: we constantly deal with oddball situations. However, one that is fresh in my mind is a gentleman who claimed we had driven his car "too hard" on a test drive. In full biker gear he stormed back in the next day and made random threats at our staff... Fairly intense day.
For mine, I've worked at a couple different stores. The worst was definitely being on a test drive with someone that was currently on meth. Yep, that happened. Also, there was a time a (much older) woman waited an hour while i was with another customer so that she could ask me out.
Billy Bob's has terrible cars. Jimmy John's is where it's at. I heard their cars are freaky fast... Imsosorry.
I had a great experience when I sold my vehicle at CarMax, but it would've been even greater if my representative was an informed citizen of the internet. Glad to hear it! You might be surprised how many of us are. After all, when it's a slow day we spend lots of time sitting around if we aren't doing follow up haha. A lot of us spend that time on reddit.
Last updated: 2014-05-25 23:05 UTC
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