[tptacek]

For what it's worth, I felt the same way about Carmax, last year. Bought online, they drove the car out to me, and when a better trim of the same car popped up on their site 2 weeks later, I just traded it sticker-for-sticker no questions asked.

I'm sure I didn't get close to the best price, but I got better than dealership sticker for the make/model/year, and I lost zero time to the transaction.

[hajile]

Just one car auction company (a subsidiary of Cox) controls 80-90% of the market. If a dealer avoids junk, ungraded cars, then the quality is very standardized. As a result of a completely centralized pseudo-monopoly, actual acquisition cost is set to an extreme degree (car auction price ranges are so tight that top and bottom bids are usually within a hundred dollars of each other from very cheap to very expensive vehicles). In turn, this means that local pricing is going to be based on other stuff like time on lot (more time = more payments and interest), lot space cost, sales cost, etc)

Places like Carmax buy a car, mark it up $2k, and sell it making most of their money on financing and warranty/service stuff. They mark vehicles down something like $500 each month for two months then put it right back on the auction if it doesn't sell (so you'll generally get better deals from vehicles that have been on-lot a while). This is why they refuse to negotiate price.

You may get a slightly better price than the dealership, but not by much when you consider every single factor.

If you want the best possible deal, know the car you're looking for and offer a fixed finder's fee to a mom and pop used dealership to buy it for you. A lot of these smaller dealers will give you a good, fixed rate because it's guaranteed money to them without that normal overhead. It may not be strictly allowed (due to NDAs and such), but some may even allow you to help pick out the vehicle to bid on.

[tptacek]

Like I said, I'm well aware that I'm not getting the absolute best price at Carmax; that's part of the premise. What I am getting is a month to drive the car and swap it for any other car, or a refund. That's hugely valuable.

[CobaltFire]

Coincidentally this arrange to bid is exactly the process most military moving to Japan use with local mom and pops. Works excellently.

[faddypaddy34]

I have bought almost all of my cars from CarMax in the last decade. Even going into their dealerships in person is not a typical experience. There is no negotiation on price and the only "upsell" was their extended warranty. They are also hemorrhaging money currently and hopefully don't go the way of carvana.

[theGnuMe]

I bought through carmax and I call it dealership lite. They tried to finance me even though I already had financing (and I said no) and pushed the extended warranty pretty hard. It is like $5k for 150k miles. I've heard you should buy it if you go for a BMW, jaguar or other higher maintenance car.