Probably not worth the paper it is written on.

 

This is not true, in my experience. Carmax, again, gives you a discount versus KBB value. Dealers are supposed to give such a discount as KBB reflects the "starting point of negotiations." Additionally KBB doesn't give you the market value of the car (determined by, gasp, the market) but calculates that value based on expected depreciation. This is not an accurate calculation of what something is worth, any economist or business person worth anything will tell you that. This is why any car dealer will tell you, if you get to know them personally, that KBB doesn't mean a thing.

If you consider Edmunds to reflect the Fair Market Value of the car -- based, by the way on comparable sales in your geographic market, just as it should be -- then Carmax appears to be overcharging sometimes in the thousands of dollars. The no-haggle pricing makes it easier to buy, but you're paying a premium. The question is whether it is worth it to you.

Dealerships, by comparison, take an average of 4-5% profit on all vehicles. Oftentimes, this is much lower than Carmax's profit (the example above of an over $3,000 difference between trade in and sale price reflects this). So, in general, you can talk a reasonable dealer into selling you the car within the 4-5% range and not much more. A dealer once told me he was entitled to a 10% profit and I walked off the lot immediately (redline 2004 enthusiast).

Private parties are cheaper, but don't give you the same assurance of buying from a dealership (or Carmax) for that matter. If it turns out, down the line, that they lied to you, good luck getting anything out of them. The price discount reflects this risk. If a large dealer lies to you, like I said in a previous post, you have a good amount of leverage. They will give you sh*t exactly up until the point where you convince them that you'll actually pursue it legally. Ask anyone in the car business, they will tell you the same thing.

 

I went to Carfax to buy a 2002 Maxima because at the time they were hard to find, black 6-speed. The price they had it listed for was the KBB price. I went it and drove it and got a trade in value for my truck and the guy brought the papers to me and asked if we had a deal. I had seen some similars at the Nissan dealership for a few thousand less. I threw out an offer that was fair based on the market and they told me that they didn't haggle prices. I told them it was too much and the guy tried to explain how Carmax is such a great buy. I told him that I understood but my offer was firm. He said no lowering of the price and I got up to leave and he didn't even try to get me to have another look.

 

They will not lower the price. "F*cking Shiva handed this guy a million dollars, told him 'sign the deal!' he wouldn't sign."

Sad part is, a lot of dealers are doing the same thing, at least in LA, they'll let you walk out on a deal for a couple hundred bucks.

 

I know people who have had good experiences, but I've had nothing but bad.

they've tried to lowball me hardcore on two different cars I've had appraised there. like 4000+ under what other dealers have offerd me and below what I sold the same car for.

plus when I was lookin at a z at the carmax in fayetteville, there was a 4 inch by 2 inch area where it was oviouse that some one had tried to do a home touch up job, but messed it up horribly, paint texture, color and lack of clear coat made it glaringly obvious, and the sales person was like "ohh yeah that, ohh that will buff out easily", no wonder that same car was still on the lot a month later with the same Fu@ked up touch up paint.

they are no better than any other car dealership except they aren't as willing to negotiate price with you, they just haggle over how much they want to offer for trade in on your vehicle instead.