The bottom line:
Best for used-car shoppers wanting to purchase from a large inventory and finance a car online. Vehicles can be delivered or picked up at a CarMax location.
Pros & Cons
Offers a three-day window to replace CarMax financing with a better loan offer.
Application process can be 100% online including document upload.
Minimum loan amount is lower than other lenders.
CarMax Auto Finance borrowers can select payment due date and manage their loan through the MyCarMax online platform.
Maximum APR is higher than many other lenders.
Only finances vehicles sold through CarMax.
Does not offer pre-qualification with a soft credit check.
Does not allow co-signers, only co-borrowers.
How does CarMax work?
CarMax is the largest retailer of used cars in the United States, with a typical inventory of more than 55,000 vehicles that can be viewed at carmax.com. Customers can pick up a vehicle at one of more than 220 CarMax stores or arrange home delivery within 60 miles of a store in select markets.
Car buyers can apply for preapproved financing on the CarMax website, even if they choose to shop at a CarMax store. Preapproval requires a hard credit inquiry, which can cause a temporary drop in your credit scores. Financing is available through CarMax Auto Finance or other lending partners. CarMax also allows customers to finance through their credit union or bank.
CarMax vehicles receive a 125-point inspection, and each online listing has an AutoCheck vehicle history report. In addition, vehicles come with a Love Your Car Guarantee, with 24-hour test drives and 30-day returns. Every vehicle also has a CarMax Limited Warranty for 90 days or 4,000 miles.
CarMax also buys cars and accepts trade-ins. (Trading in a car may save you money on sales taxes.) If you're trading or selling to CarMax, you must take your vehicle to a CarMax store.
This review looks first at CarMax financing options and then at buying or selling through CarMax.
CarMax makes auto loans directly to consumers through its own auto finance division — CarMax Auto Finance. It also arranges loans through other financing sources, such as Ally Auto, Chase Bank and Capital One.
CarMax customers can also use their own lender and should provide that lender's information when they begin the car-buying process. In addition, NerdWallet strongly recommends getting preapproved auto loan offers from other lenders so that you can compare the rate with CarMax's offer.
If you finance through CarMax Auto Finance or a CarMax lending partner and then find a better loan offer, you can take advantage of a three-day payoff option. Within three business days of closing on your CarMax loan, you can replace it with another lender's financing at no cost.
CarMax sales consultants do not receive a commission based on whether customers finance their car through a CarMax finance source or a third-party lender. Even so, approximately 80 percent of CarMax's customers finance with CarMax Auto Finance or one of CarMax's other financing sources.
CarMax has no minimum credit score or credit history requirements and says its range of financing sources enables it to serve customers across the credit spectrum. This includes car buyers with bad credit — typically FICO scores below 630 — who may have trouble getting car loans elsewhere.
CarMax does not allow loan co-signers, but it does allow co-buyers or co-borrowers, which can help with the loan approval. A co-borrower, unlike a co-signer, is a legal owner of the car along with the primary borrower.
CarMax says it approves approximately 95 percent of its applicants through CarMax Auto Finance or one of its lending partners and encourages car buyers to apply regardless of credit score or profile. Loans for car buyers with bad credit usually come with a much higher APR, so it's always a good idea to shop and compare loan rates.
CarMax may be a good fit for those who:
Prefer a streamlined process for buying and financing a car. CarMax customers can browse and select used cars, arrange financing and schedule pickup or delivery from carmax.com.
Want more choices when buying a used car. CarMax provides access to an inventory of more than 55,000 vehicles online, along with a 30-day return guarantee.
Want financing flexibility. Customers can finance through CarMax Auto Finance, CarMax financing partners or their own lender, enabling them to shop rates and find the best offer. CarMax also offers flexibility to help bad-credit borrowers and first-time car buyers qualify.
CarMax financing at a glance
Note that CarMax is a direct lender through CarMax Auto Finance, but it also finances cars through lending partners and third-party lenders. Therefore, the information below pertains to CarMax Auto Finance, with notes where information may vary for other lenders.
Buying a car from CarMax
Cars and trucks sold through CarMax are mostly low-mileage used vehicles that have passed safety, mechanical and cosmetic inspections.
Car prices are non-negotiable. Vehicles have passed a 125-point inspection and been reconditioned for sale. Vehicles come with a free AutoCheck vehicle history report, which can be viewed in the details of each car listing. Listings include 360-degree photos and detailed photos of imperfections. CarMax has more than 220 stores in 41 states. It does not have stores in Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia and Wyoming.
Does CarMax sell new cars?
CarMax sells used cars; its inventory is mostly low-mileage and late-model used vehicles.
Can buyers negotiate with CarMax?
No. The company does not negotiate pricing.
Does CarMax take trade-ins?
Yes. The CarMax offer for your used car is the same if you wish to sell it to CarMax or use the equity as a down payment on a CarMax vehicle.
Costs and fees
CarMax charges a non-refundable shipping fee if the car needs to be transported between CarMax stores. The fee ranges from zero to $1,999, depending on location. Shipping fees to your store of choice are posted online. You can avoid the fee by selecting a car from a nearby CarMax store.
Guarantees and warranties
Vehicles sold by CarMax can be returned within 30 days (or 1,500 miles, whichever comes first) for a full refund minus any shipping fee. NerdWallet strongly recommends you pay for a vehicle inspection during this period. All CarMax cars come with a limited warranty for 90 days or 4,000 miles, whichever comes first.
Selling or trading in a car with CarMax
To sell your vehicle to CarMax, you'll need to get an appraisal online or at a CarMax store. To get an appraisal online, enter your car's 17-digit VIN or license plate number along with the registration information, mileage, vehicle options and any loan information. You'll also provide your ZIP code, email address and fill out a brief vehicle condition questionnaire.
CarMax will email you an appraisal offer within seconds. CarMax does not finalize sales remotely, however. You will have to bring your car to any CarMax store within seven days for a vehicle inspection. Some stores may require that you make an appointment. You can also have the appraisal done at the store if you don't want to enter your information online. If the inspection does not find any significant undisclosed damage, you will receive a bank draft on the spot for the quoted amount.
CarMax will buy vehicles of any age. CarMax reconditions the cars it buys to sell to retail customers or sells them at auction to wholesalers. CarMax opened its first store in 1993 in Richmond, Virginia. In the third quarter of 2021, it bought about 383,000 vehicles from consumers. Of those, 194,000 were bought using an online instant appraisal.
Where does CarMax buy cars?
CarMax buys cars directly from customers except in the following states: Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia and Wyoming.
Is my offer from CarMax negotiable?
No. All offers are firm and are good for seven days.
Will CarMax buy my car if I owe on it?
Yes. You'll need to provide loan information so CarMax can pay off the lender. If you owe more than your offer, you will need to cover the difference. In some cases, the amount can be included in your financing or paid directly to CarMax. CarMax will accept a personal check for amounts under $250. For larger amounts, CarMax stores accept cashier's checks, certified checks, certified funds, cash, and debit cards.
Does CarMax buy leased vehicles?
Yes, as long as the leasing company allows sales to independent dealers at the time. If not, you can buy out your lease at its residual price, obtain a new title in your name, and get a new offer.
To review CarMax, NerdWallet sent a survey to CarMax requesting more than 60 data points and followed up with company representatives. The information was compared with other companies that seek the same customer or offer a similar product.
Frequently asked questions
CarMax opened its first used car store in Richmond, Virginia, in 1993. CarMax now has more than 220 stores nationwide, and a typical inventory of more than 55,000 used vehicles can be viewed at carmax.com. In 2021, CarMax sold more than 750,000 used vehicles. CarMax has more than 25,000 employees and has been recognized as one of the Fortune “100 Best Companies to Work For” for 16 consecutive years. The CarMax Foundation has donated more than $75 million to various community causes.
CarMax offers customers a variety of financing options from CarMax Auto Finance and from CarMax’s financing sources. CarMax Auto Finance, CarMax's auto finance division, has been in operation since 1993 and provides financing solely to customers buying vehicles from CarMax.
CarMax also works with financing sources to accommodate customers across the full range of the credit spectrum. CarMax third-party lending partners include:
American Credit Acceptance.
Santander Bank, N.A.
Wells Fargo Bank.
Westlake Financial Services.
CarMax advertises “no-haggle” pricing, and it does not offer price matching or negotiation on any car purchases, sales or trade-ins.
A down payment isn't required for financing at CarMax, but making a down payment when buying a car is a good idea. It reduces the amount you will have to borrow, which can result in a lower APR and less interest paid over the life of the loan. CarMax also accepts trade-ins, which can reduce the amount you need to borrow.