Inside Value: Carmax
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By HSCGrad
September 20, 2007

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And to commemorate my now full position into Carmax, I will now describe my most recent experience with this wonderful company. This [is] my 3rd purchase from Carmax.

My Jeep Grand Cherokee was totaled in an accident in June of this year. I am a big proponent of used cars (and paid-for cars!), and I would have driven this car (may she rest in peace) until the wheels fell off. Again, the car was totaled in a rollover accident - so when the question of what-car-to-get-next surfaced, it was easy: The Jeep Grand Cherokee had to have had something to do with saving my life - I figure its a good idea to get another Jeep Grand Cherokee. (Otherwise, wouldn't that be like shooting even par and subsequently buying a new set of irons afterwards?)

Again, being a repeat customer at Carmax - I knew that finding another car wasn't going to be difficult. I log on to, I enter the price range (<20k), color (black or silver), year (post 2005/5 star rating year upgrade) - whatever parameters I want - and they email me updates to their nationwide inventory based on these parameters every day. No rush. No hustle. They aren't going to run out of Jeep Grand Cherokees. I've got to work out compensation with the insurance folks involved in this accident. Will just ride this rental in the mean time.

Well, a few weeks later, I've got a few Jeeps earmarked at (Their inventory updates daily - so every now and then one I had my eye on would get sold. No panic. Again, they aren't going to run out) I am approaching an appropriate time to take one of these beauties off the lot. I forward my two favorites to the wife - she approves.

About this time the "buy local" thought pops into my head. Having been in small business all of my life - I will always have a soft spot for supporting my smallish town's economy. Heck, we've got a nice sized Jeep dealership here. Maybe I'll find that they have an even better deal. So, I break down and pull right into the dealership on the way home from work. I am immediately spotted, and become the prey of a very nice young lady, but one who was clearly a greenhorn in the car selling business. I proceed to tell her that I am looking for a 2005 Jeep Grand Cherokee. She responds that they don't have any on this particular lot, but a short ride down the road in their 2nd lot, there appears to be a few 2005's. This involves a ride in a brand spanking new $37k GMC Acadia, which she - of course - tries to sell to me on the way. I am beginning to feel uneasy.

Long story short, they have a Burgundy V8 and an Aqua colored 2WD. Neither of them beat the deal I am getting at Carmax, and neither of them are colors or engines that I am looking for. After telling these folks (a seasoned vet joined us in the lot to help this poor girl) that I had to be home in 45 minutes to relieve my wife of our 2 kids, they insist that I take a test drive and the "buy local" me knuckles under. First thing that happens is they start opening doors and tailgates to 'show' the car to me. (Whereby it is actually revealed that the back windshield wiper is sitting in the trunk)

This leads to an excruciatingly uncomfortable ride with this girl who is issuing canned car salesman line, after canned car salesman line - and who ultimately goes for the kill by asking the timeframe that I was considering for making a purchase. We get back to the dealership, I follow her in to get a business card, whereby she asks if she could just have 5 more minutes of my time while she introduced me to her manager ("The manager likes to meet all prospective customers"). At this point I want to jab myself with the pencil on the desk to put me out of my misery. She scurries off to find her manager, to no avail. I fill out whatever information she wants - I'm willing to do anything at this point to just get out of this place. I know that I am never returning to this car dealership, as much as I tried to give the "local buy" a chance.

The next day I call Carmax. I say I want stock#34565. I've had my eye on her and am crossing my fingers and hoping that it is not somehow sold. Gentleman informs me that it is at a regional Carmax, and they can have it there in 2 days. I say I'll see you in 2 days.

With the full knowledge that I get 5 days of an unconditional refund, and 30 days of an extensive warranty - on top of the still active Jeep Warranty - I literally do not want to waste my time with a test drive. What is the point? I am about to give it a long test drive back home (1.5 hours away) I know the price of the vehicle - we wont be haggling -so how quickly can I just drive this baby off the lot?

That said - I walk right into the show room, ask for the salesman by name - he knows exactly who I am - he knows exactly the car I am there for - and he takes me out to it. Freshly washed. Let's take it for a spin. Can my buddy come with us? Yes. We take her for a whirl. We come back. Box her up, I'll take it.

While the finance department is alerted - we go back to the car and go over everything on the car from the horn to the power windows to the turn signals. All checks out.

We go into an office. We start the process of finalizing this entire deal - until we realize that I forgot my license plate from my old car. At this point, the buddy I have brought along turns as white as a ghost. He's thinking we're going to the DMV at 5 PM on a Wednesday at rush hour. Alas - no problem - CarMax has an in house license plate maker and registrar - this little blip won't cost us any significant delay. We'll be drinking a Blue Moon at BW3's in no time. They bring in the finance person for 5 minutes, we sign and finalize - they give me the keys - we walk to the garage where they are topping off everything one more time and washing it AGAIN, and I am driving off in my new - er, next car. No undercoating, no dealer-prep, no special fees, no Scotchgard fees, no additional costs for the keys.

4 months later - I remain a very satisfied, three-peat customer with no buyer's remorse whatsoever. I didn't spend too much and she drives like a dream. Did I mention she was 5 star safety-rated?

The stock is off 13% today after lowering guidance for 2008. Fortunately, my time horizon is not '2008', but more like 2018. Being well aware that being a mere satisfied customer is no reason to blindly buy a stock - it warmed my little investing heart to see Phil Durrell endorse KMX with an extensive look at its financials and prospects.

Borrowing a quote used by TMFAdmiral in his 6 month review - don't look this gift horse in the mouth.