CarMax Dealer Fees
CarMax, the largest used car retailer in America, and on Fortune’s “100 Best Companies to Work For 2005 through 2018”, has introduced “no-haggle” pricing to the majority of the used car market in the US. But, when the sticker price is coming in a few thousand over KBB listed price, is your car buying experience really so hassle-free?
CarMax sells one to six model years old vehicles on the used car lots and at CarMax.com, and they offer a limited 4,000 mile or 90-day (whichever comes first) warranty on every used car that they sell. This warranty covers the engine, transmission, and drive train during your first few months enjoying your new ride.
Take note of the fact that the CarMax used vehicle you are purchasing is not Certified Pre-Owned. The dealer will almost certainly be adding in a charge for a 125 point inspection being performed prior to you purchasing the vehicle, but that in no way means that your vehicle is Certified Pre=Owned.
CarMax also offers an extended warranty that you may purchase at the time of the purchase of the vehicle only. This extended warranty is also called the MaxCare Service Plan. Interestingly, the warranty isn’t actually sold or serviced by CarMax, but by a 3rd party. Another interesting point to take note of is that 27% of the used vehicles sold by CarMax have open safety recalls on them at the time that the sale closes.
The open safety recalls are due in part to the fact that the manufacturer has not authorized CarMax to perform the recall repairs. Yet, in the haste to transfer ownership of the vehicle to a used car buyer, the vehicle is both purchased and sold with a potentially lethal safety defect instead of scheduling and seeing to the completely free safety recall replacement or repair service.
Although it is illegal to sell new vehicles while they are under a safety recall, the same is not true of used vehicles. You need to run the VIN on the vehicle yourself to check for such a recall, do not simply trust the word of the dealership to inform you that your vehicle is under recall.
As far as vehicle sticker price is concerned, CarMax will typically slap a price tag onto the vehicle that may appear to be a good deal. However, get ready, because when you buy your used vehicle at CarMax, you’ll soon encounter the CarMax dealer fees, such as:
The Transfer Fee
And, the clincher, if you purchase that vehicle or not, you are responsible for paying that transfer fee, and it is due at the price that CarMax determines it will be at the time of transfer. Although CarMax states that you may return the car hassle-free within 7 days, the transfer fee is not refundable.
You will also see a Processing Or Dealer Fee. This will be added somewhere to the financial documents. These fees are to “cover the cost of the sales paperwork”, and are another $100 to $400 on top of the sticker price of the vehicle.
In addition, the MaxCare Extended Vehicle Warranty noted earlier? The standard 6-year, 125,000-mile warranty is anywhere from $1,000 to $3,800, on top of the sticker price of the vehicle. You will also need to factor in the deductible for every warranty repair, ranging from $50 to $500, depending on the type of repair necessary.
In the long run, it is advisable to sit and do the math before you sign on the dotted line and drive that vehicle off of the lot. Although it may seem just a few thousand dollars off of the KBB price guidelines when you see the sticker price, once you factor in the CarMax dealer fees, the equation is likely to appear much less attractive. Take your calculator, and take your time reviewing the financial agreements before you sign on the dotted line.