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