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Comment by xivzgrev | Hacker News Reader

There's value in removing negotiations to end consumer. The expectation to negotiate can introduce stress and uncertainty into an already-stressful large purchase. CarMax removes that, and captures the value in higher prices.

But it is interesting that more people don't do a quick check of Kelly Blue Book. For example BMW 328i in article at Carmax is $27k. On KBB selling to private party value is $21k-$23k. Maybe there are some special features on one in Carmax inventory but doubtless there is a markup there.

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A lot of people are probably happy to pay the premium to avoid the relative uncertainty, risk and awkwardness of a private sale.

exactly this

Not only that, CarMax will support you if the car turns out to have problems. Try getting that when you are curbstoning

The value of buying from CarMax is a level of assurance that I won't be buying a lemon and that I'm doing business with a company with a positive reputation.

I'm in my early 40s and I've only had five cars. The first two were from a car dealer who was the father of my best friend, one new one and two from CarMax for myself and my wife. My experiences at CarMax were much better than my one time buying a new car from a dealer that I didn't know personally.

I've never used CarMax but I'd definitely consider them if I wanted a used vehicle. I'm in a similar situation when it comes to keeping cars a long time. If anything, I tend to keep them for an expensive repair job too long.

It does make the car buying experience easier. I know the trade-in isn't worth much and I can always just donate as a fall-back. I also haven't needed to finance for a while. When you can just basically ignore the dealer number BS and go in with a take it or leave it price based on the invoice, the experience may still be annoying but it's not particularly stressful.

I've never done a trade in. My first car I gave back to my parents, my 2nd one was totaled, and my third one I gave to my son. I've gone to CarMax both times with a preapproved car loan but they have always had a lower interest rate.

Car max has a long comprehensive waranty. It may be worth it to someone for ther peace of mind.

The warranty can be a really good value on some used cars https://youtu.be/MzQCj-dbgN0

TLDR: Over $16,000 paid out on a $3,900 six year CarMax warranty.

Whats weird is he never says exactly what he paid for the Range Rover in the first place. I found a post where he said it was in the 30s. but why not tell that info?

Then could compare Car cost + warranty vs private party purchase.

why would he? The point of the video is to highlight the value Doug derived from the carmax warranty. He has one for the Aston, which goes into detail on cost of the car etc. https://www.youtube.com/watch?v=hrrFAjxKtj0

You pay that warranty on top. And it is good deal for a car that you know will require service. You can find good deals at CarMax. I found a car at CarMax $2k under the dealer. Now maybe I could’ve gotten it cheaper otherwise but I doubt much more.. also you have to realize that used cars are in demand vs new. Today it is often cheaper to buy new.

If you see a used car at the dealer, definitely negotiate it there too. Look the car up on CarFax and see if they acquired it at auction, then look up the average auction price for that year/model/trim and you'll have a good idea how much room they have to work with. Most dealerships make more money selling a used car than a new car so there's usually a healthy margin for you to take a piece of.

Source: my dad runs a dealership and I have negotiated used car prices at other dealerships.

Where is a good source of average auction prices?

I've never bought a car at Carmax but when I was selling my car they offered me a better price than the dealer.

Of course there is a markup, but it's better to look at buying, not selling KBB prices. Buying from a private party is usually the cheapest option, but the hardest to get right. Buying used from a regular dealer can be cheaper than Carmax, but you need to do a lot of negotiating and even then, it's typically not that much cheaper.

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