CarMax Review 2024: Financing, Buying, Selling

Full Review of CarMax Auto Finance

CarMax specializes in buying and selling used cars and allows customers to purchase a vehicle at more than 240 CarMax locations or arrange home delivery within 60 miles of select stores.

The company also offers auto loans directly to consumers through its own auto finance division — CarMax Auto Finance — and works with other lenders, such as Ally Auto, Chase Bank and Capital One.

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 financing your purchase with CarMax, 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 — unlike traditional dealerships, which usually offer a commission to the sales consultant. Even so, approximately 70 percent of CarMax's customers finance with CarMax Auto Finance or one of CarMax's other financing sources.

The company 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.

Note: 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.

Table of contents

CarMax Auto Finance at a glance

CarMax Auto Finance may be a good fit for those who ...

Do you qualify for a CarMax Auto Finance loan?

How to apply for a CarMax Auto Finance loan

Buying a car from CarMax

Selling or trading a car to CarMax

How we gather rates and review auto loan direct lenders

CarMax Auto Finance at a glance

• Restrictions

  • Maximum vehicle age: 11 years.

  • Maximum vehicle mileage: CarMax doesn’t have a mileage restriction; however, higher-mileage vehicles are less likely to be available for purchase.

  • Other vehicle restrictions: Financing is available only for vehicles purchased through CarMax.

  • Loan amount minimum: $500.

  • Loan amount maximum: $100,000.

  • Maximum loan-to-value ratio: Did not disclose.

  • Bankruptcy restrictions: No active bankruptcies.

• Other loan details

  • Approval speed: Within five minutes for most applicants. Approved loan offer is good for 30 days.

  • Initial deferred payments: Does not offer.

  • Selected payment due date: Yes. Borrowers can select a first payment date up to 45 days from the date of purchase.

  • Maximum debt-to-income ratio: None.

  • Late payment grace period and fee: Yes, amount depends on state law and CarMax finance source.

  • Hardship plans: Yes. Available with CarMax Auto Finance on a case-by-case basis.

• More lender details

  • Contact options: Borrowers can apply online, by phone or in-person at a CarMax store. CarMax has a dedicated Spanish-speaking servicing team.

  • Availability: Mon.-Fri. 8 a.m.-10 p.m., Sat. 9 a.m.-6 p.m. ET.

  • Mobile app to manage account: Yes.

  • Online resources: Offers an online content center with articles covering cars. CarMax also offers an online car payment calculator to help consumers estimate their monthly loan payments.

  • Related services: In addition to CarMax Auto Finance, the company also finances cars through lending partners and third-party lenders. CarMax also specializes in buying and selling used cars online or at physical CarMax stores.

CarMax Auto Finance 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 40,000 vehicles online, along with a 10-day money-back 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.

Do you qualify for a CarMax Auto Finance loan?

Basic eligibility requirements to apply for a CarMax auto loan include the following:

• You must have a valid Social Security number.

Here are minimum borrower requirements to qualify for a CarMax auto loan. Note that meeting these requirements doesn’t guarantee approval. Also, many lenders are flexible with minimum requirements when considering an applicant's total financial picture.

• Minimum credit score: None.

• Minimum credit history: None.

• Maximum payment-to-income ratio: None.

• Minimum annual gross income: Depends on finance source and application details.

Before you apply

Check your credit. You can get your free credit report on NerdWallet or at AnnualCreditReport.com. If you find errors, file a credit dispute to correct them before you apply for an auto loan.

Figure what monthly payment you can afford. Use an auto loan calculator to determine what APR and repayment term you need to get monthly car payments that fit your budget. When you know your maximum car payment, a car affordability calculator can help you determine a realistic car price.

Gather your information and documents. CarMax requires the following to submit an initial application: Social Security number, valid driver's license, phone number, vehicle information, loan amount, down payment amount (if making one), employment information, income and co-buyer information (if purchasing with a co-buyer).

How to apply for a CarMax Auto Finance loan

• Pre-qualify on CarMax’s website. Applicants can apply for a used car loan through CarMax Auto Financing online, in-person at a CarMax store and by phone at 800-925-3612. Applicants must have a CarMax account to pre-qualify. During the pre-qualification process, you'll be asked what your preferred down payment is as well as personal, income and housing information. When you pre-qualify for a loan, you’ll receive loan payment, rate and term estimates. There's no hard credit pull at this stage.

• Submit a formal application. If you decide to purchase a vehicle through CarMax, you can complete an application for final offer terms. The application requires a hard credit inquiry, which can impact your credit score. Borrowers can apply for a CarMax Auto Finance auto loan 100% online, including document upload. Final loan approval offers are valid for 30 days.

• Stay on top of your loan payments. CarMax financing reports car payments to all three major credit bureaus, so on-time payments will help build your credit score, but missed payments will hurt it. If you can, set up automatic payments to make sure your payments arrive by the due date.

» MORE: Compare auto loans, rates and lenders

Buying a car from CarMax

CarMax mostly sells low-mileage and late-model used cars and trucks. All vehicles sold through the retailer must pass a 125-point inspection and must be reconditioned for sale. The company’s vehicles come with a free AutoCheck vehicle history report, which can be viewed in the details of each car listing and listings also include 360-degree photos as well as detailed photos of imperfections.

CarMax trade-ins

Additionally, CarMax accepts trade-ins. The offer you receive for your used car from the retailer is the same if you wish to sell it to them or use the equity as a down payment on a CarMax vehicle. Note that the company does not negotiate pricing.

CarMax has more than 240 stores in 41 states, however, it does not have stores in Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia and Wyoming.

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 10 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.

Note: CarMax previously offered a 30-day Money-Back Guarantee policy. The retailer says it will honor their 30-day (up to 1500 miles) Money Back Guarantee for all vehicles purchased on or before 5/11/24.

Other car-buying details:

• Is extended warranty coverage available? Yes. CarMax offers MaxCare extended service plans on every car it sells. MaxCare plans include emergency roadside assistance and rental reimbursement. Coverage options and prices vary.

• Can I buy a car online? Buy online and pick up your car at the nearest CarMax store. When available, delivery is free within 60 miles of some stores.

• What if the online car I want is not at my nearby CarMax store? CarMax will ship almost any car in its inventory to another CarMax store. Shipping can take up to 21 days. You will not be obligated to buy the car before seeing it in person. However, you may be charged a non-refundable shipping fee. Shipping fees can be paid with a credit card.

• Is buying online the only way to buy a car at CarMax? You can purchase a car in a CarMax store or online.

• Can I take a test drive? Customers can take a free 24-hour test drive of most cars for up to 150 miles. You must provide a driver's license and proof that you carry comprehensive and collision insurance. The 24-hour test drive is not available for express pickup or delivery orders.

• Does CarMax resell damaged cars it has bought from customers? CarMax does not sell retail cars with flood or fire damage or salvage history. CarMax is unable to repair safety recalls. Your CarMax representative can help you determine if the car has a pending recall.

Selling or trading in a car with CarMax

CarMax buys cars directly from customers except in the following states: Alaska, Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, West Virginia and Wyoming. To sell your vehicle to CarMax, you'll need to get an appraisal online or at a CarMax store. For an online appraisal, enter your car's 17-digit VIN or license plate number along with the registration information, mileage, vehicle options and any loan information. You must also provide your ZIP code, email address and fill out a brief vehicle condition questionnaire.

CarMax will email you an appraisal offer within seconds, however, the retailer does not finalize sales remotely: You will have to bring your car to any CarMax store within seven days for a vehicle inspection. Note that some stores may require that you make an appointment. If the inspection does not find any significant undisclosed damage, you will receive a bank draft on the spot for the quoted amount.

CarMax buys vehicles of any age and reconditions the cars it buys to sell to retail customers or sells them at auction to wholesalers.

Vehicle restrictions

CarMax buys vehicles that are not paid off. To sell a car you still owe money on to the retailer, you must 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 stores accept cashier's checks, certified checks, certified funds, cash, and debit cards. You can also pay via a personal check for amounts under $250.

The company also buys leased vehicles, 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.

Other car-selling details:

• Do you have to buy a car from CarMax to sell your car to them? No. Whether you buy a car from CarMax or not, your offer is the same.

• Does CarMax have restrictions on the vehicles it will buy? CarMax will purchase damaged vehicles, including those with flood damage. If a car is undrivable, you can have it towed to CarMax for an appraisal. However, some states restrict CarMax's ability to purchase salvage vehicles.

• What is needed to complete a sale? Requirements can vary by state, but in every state, you will need your car's title or loan information, a valid registration, and all keys and remotes. In addition, anyone named on the title should be present and provide a valid state-issued photo ID.

• Will CarMax pick up my car? CarMax will pick up your vehicle only if you are also buying a car and having that car delivered.

• When am I paid? As soon as you sign over your car, CarMax will hand you a bank draft. A bank draft must be deposited and can take a few days to clear before a withdrawal.

• Will I be charged any fees? There are no fees to sell a car to CarMax.

• Can the price change after I've handed over the car? The price can change if there is undisclosed damage.

• If someone else's name is on the title? CarMax will walk you through selling a vehicle that has a lost title, has someone else's name on the title, or belongs to someone deceased.

How auto loan rates work and how we collect them

The auto loan APR range NerdWallet displays is provided by the lender. We make every attempt to keep rates updated, by sending out bimonthly rate surveys and encouraging lenders to send us updates when rates change. We also compare these rates to APRs on the lender's website, if available. The accuracy of our rates depends on the information lenders provide to us. It’s always a good idea to check average auto loan interest rates, and compare to similar lenders, to determine if a lender’s provided rate seems realistic.

We ask lenders to provide their lowest rate that at least 10% of applicants applying for the lowest rate have qualified for in the previous three months, without including any potential rate discounts. The lowest rates shown are typically available only to borrowers with good or excellent credit (a FICO score of 690 and above).

We also ask lenders for their highest rates, which typically reflect rates available to borrowers with fair or bad credit (a FICO score in the mid-600s or below). The highest interest rates result in higher monthly payments and more total interest paid.

Actual rates received by Carvana auto loan borrowers may be different than the rates shown in this review.

How do we review direct lenders for auto loans?

NerdWallet's review process surveys companies that offer any combination of new car purchase loans, used car purchase loans, auto refinance loans (traditional and/or cash-out) and lease buyout loans. These companies include direct lenders and aggregators; the latter group doesn't have in-house loan products but matches borrowers to third-party lenders within a network. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

Our survey for direct lenders has different questions than the survey for aggregators, but each includes more than 60 data points. NerdWallet independently confirms product details and, when necessary, follows up with company representatives. At least two writers and an editor verify the facts for every lender review to ensure data are accurate.

To receive a star rating, a lender must respond to NerdWallet’s annual auto loans survey. Star ratings are then assessed from poor (one star) to excellent (five stars).