Selling a car to Carmax?

[kythuen]

There should be a limit to how many questions a N00b can get away with before getting face-punched.  I'm trying not to exceed mine.  :)

But many of you have advised me to sell my car, and I've been slowly adjusting to the idea.  It's got a pretty high BB value, enough to pay off what remains of the loan on it, which would jump start my repayment of my student loans.  The thing holding me back has been the difficulty of selling it privately while I still owe money on it - Toyota has the title, not a bank, so I can't just go to the bank with a buyer and sell it there. 

Last night, I saw a commercial for Carmax.  Apparently they want to buy my car!  :)  It sounds like a relatively quick and painless process, and from the reviews I've seen, they generally offer a fair price.  Thought I'd check here, though, and see if any of you have any experience selling a car to them. 

Corollary question:  Once I've sold the car, with its giant interest rate, my debt repayment plan changes.  I have no CC debt, just 65k(ish) of student loans, at 4.375% (bulk of loans) and 3.19% (about one-sixth of the total).  So, I would think my investment plans should change, right?  I can get a better rate of return from investments than either of those percentages, so from what I've gathered from my reading, I can start thinking about ramping up while paying down at the same time?

[Lagom]

I’ve never used Carmax but from what I’ve read, it appears that they’ll offer you a better price than most dealers, but still a fair bit less than you could get yourself via craigslist.

As for student loans, your rates are low enough that putting 100% of excess income towards other savings vehicles is almost certainly the mathematically superior approach. That said, I am personally in the camp of preferring to have as little debt as possible due to risk-aversion and emotional reasons. I give the spreadsheets their due as much as I can tolerate, but the way I see it, paying off low interest debt is a form of diversification and so not such a terrible thing. In the current market, 4.4% of guaranteed, low-risk (no-risk, really) return, is relatively decent. You combine that with the psychological benefits of early payoff, and I could see a 70/30 or 80/20 stocks/loan payment split as a reasonable investment allocation. Note that this 20-30% towards your loans would replace an equal amount you might otherwise assign to other low-risk options in your portfolio. So if you are the type of investor who likes an 80/20 stock/bond, split, I would go 80% stocks, 20% extra loan payments until the loans were paid off. Again, that's not the highest EV approach, but it's one I personally find to be productive and emotionally satisfying.

I wouldn't bother paying the 3.19% loan off early.

[Catbert]

My husband sold his car to Carmax about 6 months ago.  He went to Carmax and they gave him a price (I think it took about 1/2 an hour) which is good for 7 days.  He then tried to sell it on Craig's List for a higher price.  When he didn't get a better offer in a week he went back to Carmax and sold it.

I'm sure if he worked at it harder/longer he could have gotten more from a private party, but Carmax as quick and fairly painless.  We didn't have a lien holder, but I'm sure Carmax has that part of the process figured out. 

[RoseRelish]

Carmax usually makes respectable offers. They are at least in-line with a dealer, but with fewer strings attached. I would have sold to them if I hadn't worked out a better deal on a straight-up trade.

[Saving mom]

I have sold cars to Carmax twice and used it to price a car for trade-in (originally went there to look at a used car on their lot and they valued my car as part of that process). It is a quick process and they give a fair price.

[cbr shadow]

Whatever Carmax offers your for your car, I'll give you a few hundred more..
Check out my post here:
https://forum.mrmoneymustache.com/welcome-to-the-forum/sharing-another-way-to-make-some-side-cash/msg46804/#msg46804

You're MUCH better off selling it on craigslist (depending on your location).  I buy cars from friends/family that are trading them in all the time, because if you're willing to put a few hours into getting your car ready, putting up a good ad, and dealing with a couple people then you'll be paid well for your time.  I'd recommend selling it yourself.
Also I was half kidding above about me buying it, but if you actually do decide to sell it to Carmax, I WILL give you more than they're offering (and I dont even know what car you're selling!)

[kythuen]

cbr, you make a good case!  :)  The problem I have with selling it privately is that Toyota owns the note.  My understanding is that I'd have to find a buyer who is willing to give me money for the car without the title, so I can pay off the loan, and then send the title after.  I'm pretty skeptical about finding someone willing to do that on Craigslist.  And I'd want a bank draft, or to wait for their check to clear before handing over the car; then they'd be trusting me to hand over the car, and subsequently the title.  I don't have any aversion to vacuuming/washing the car and advertising it, but it seems like the process would require a lot more trust than I usually expect to find on Craigslist...?

The car is a 2012 Toyota Yaris Hatchback in excellent condition with ~7000 miles on it, no accidents, no liens, etc.  Worst damage is a couple tiny scratches around the driver's side keyhole where I fumbled my keys once.  If you're near Boston, we should talk! =D

[new2this]

cbr, you make a good case!  :)  The problem I have with selling it privately is that Toyota owns the note.  My understanding is that I'd have to find a buyer who is willing to give me money for the car without the title, so I can pay off the loan, and then send the title after.  I'm pretty skeptical about finding someone willing to do that on Craigslist.  And I'd want a bank draft, or to wait for their check to clear before handing over the car; then they'd be trusting me to hand over the car, and subsequently the title.  I don't have any aversion to vacuuming/washing the car and advertising it, but it seems like the process would require a lot more trust than I usually expect to find on Craigslist...?

The car is a 2012 Toyota Yaris Hatchback in excellent condition with ~7000 miles on it, no accidents, no liens, etc.  Worst damage is a couple tiny scratches around the driver's side keyhole where I fumbled my keys once.  If you're near Boston, we should talk! =D

Most people sell cars without having them paid off. All you need is a bill of sale that includes the VIN number and (at least in my state) the buyer can get temporary registration. The buyer will also most likely be financing the purchase and their bank or credit union will be working closely with Toyota to secure the title.

[cbr shadow]

Ah it looks like I missed that in your post - whoops!  Without having the "title in hand" many people would be turned off by this unless it was unbelievably low priced or they really wanted that particular car and you were in an area that these dont come up often.

[bogart]

Without having the "title in hand" many people would be turned off by this unless it was unbelievably low priced or they really wanted that particular car and you were in an area that these dont come up often.

Would they?  There's an easy procedure in place in my state, I forget exact details, but it's handled at the DMV when the license changes hands and is easy and legit -- paperwork is filed transferring the title.  I haven't sold anything I owed on but have bought from people who did, no big deal (it was a good deal, but not a GREAT deal).

I sold a car (pretty used up) as a trade-in when I bought one from Carmax and referred a friend to it when he was considering donating a car rather than dealing with selling it (hmmm ... he still owes me a promised drink for that one!).  Both were easy and in my general experience selling something worth less than $1k (my situation, not the OP's, obviously) isn't worth the time/hassle as it leads to questions like, "Do you need all the money at once?"  Um, only if you want all the car at once.  But I digress!  Anyway, as others note, it's easy to do even if just for an estimate, no reason not to get one if you are interested in finding out and you can always still sell privately.

[Will]

Just thought I'd relay my story:

I was selling a car I still owed on (I know, but it was pre-Mustachian).   Crapital One held the note.  My buyer had the financing all locked up; all her credit union needed was to see the title.  They didn't want it; they just wanted to see it, and they didn't even need to see the actual title itself, just an image of it.  So I call CO and tell them this, and they tell me if I want the title I have to pay the car off.  I try explaining the situation to them again, where I tell them (again) that I don't want them to send me the title, my buyer's CU just wants to see an image of it.  "Can't be done!  Pay it off and you can have it!"  Umm, hello, if I could pay it off on my own already I would have.  I even went to the buyer's CU with her and had their loan officer call Crapital One.  "If he wants the title he has to pay off the car."  "He doesn't want it, we just need to see it."  "Well then he needs to pay off the car."  They proceeded to tell me that nobody in California that has a car financed with them sells said car until it is paid off.  Needless to say, I lost that sale and had to bring that car up with me from San Diego to the Portland Metro area, as we were moving.  So I still had the car I was trying to sell, and now it had an extra 1000+ miles on it.  Is it any wonder I still hate Crapital One to this day?

[onehappypanda]

So I may *cough* know someone who used to work at Carmax ;)

The process really is stupidly easy for selling your car there. Show up and they'll check the car out for 20-30 minutes, give you an offer, and that's exactly how much they'll pay for your car. They won't pay more or less, so don't bother trying to negotiate. The offer is good for 7 days. If you decide to sell to them, just bring all the keys you have (preferably 2 sets), your registration, and enough loan information so that they can contact your lender and arrange a payoff. You'll sign some paperwork, turn in your keys and car, and be on your way. That's it. They'll probably ask you if you're in the market for a new car since you're there (token salesmanship), but whether you're buying a car doesn't make a difference in the amount they offer to buy yours for, unlike a traditional dealer.

If you want top dollar for your car, then you'll want to sell it private party. No dealer will be able to match what an individual will pay you, naturally. But from what I've been told at least, whether that's even possible when you still owe money on the car depends on your state's laws and procedures (and your lender's willingness to play nice). It might be worth looking into your state laws at least. Otherwise, I think Carmax's offers were usually similar or a bit higher than what a dealer will offer you for an outright buy, and they make it pretty fast and hassle-free.

[dahlink]

As others said and as you know selling yourself is best.  However, when I was selling my last car I also made a classified listing on ebay and at the end they let me fill out a form to receive an offer from autonationdirect.com and theirs was better than what carmax offered me by 1500.  I was kind of in a rush and took the offer.  Anyways, that is another option in addition to carmax.com for you to consider if you do not sell yourself.

Good luck!

[Khan]

As others have said, selling it yourself is a better financial deal, but the benefit to Carmax is that that offer is final. It's as much as they're willing to pay, based on their models/auction data in order to profit off of it. The finality of that, no haggling involved is what I love most about them. Same thing with the cars on their lot should you not want to look in craigslist if you do need wheels in the future. Whatever price is on the car is the price.

I've sold two cars to Carmax, and though I know I could have gotten a slightly better deal if I had worked at it, the ease of the transaction and the lack of a haggling option is what makes me love the place.

[N]

You may be able to find out how other people in your state do it by googling.
Your lender may agree to accept the payoff somewhere (like a bank office, or if they have an office) from the buyer and do the transfer right there.

I got a quote from carmax for my 2009 kia rondo that I still had a loan for. I got 1K more than that from a buyer- a friend on fb. She happened to post that she was looking for my exact type of car. I messaged her privately and within a week we had an agreement. I printed up a bill of sale, we filled in our info, and they gave me a check. Once it cleared, I paid my lender, and once I got the title, I gave it to them with the car. Now, granted we knew each other (not well, though)

If I had it to do over, Id have insisted on a money order. My bank made us wait ten business days to clear their check since it was over 5k. Very annoying.

In my opinion, if you know what you want, and act confidant, and have a plan, the buyer is more likely to go along. If they give you a money order, you could have them meet you at your bank and watch you deposit it, give them the bill of sale for the car, and you can get the money order to pay off your car or do the payment online right away. the title should only take a few days to get to you. then you can sign it over to them. you could meet them at a currency exchange that does registration/titles or dmv.

Id say its worth a little trouble to get more money. If you try, you will undoubtedly learn a lot from the experience and know more for next time you buy a car (on craigslist! from somebody else! )

N

[adam]

Personally, I have had a number of cars appraised at Carmax and was always a little disappointed with the offers they made.  Case in point: 2008 Chevy Trailblazer SS.  They offered me I think 16-17k.  I traded it for $21k at a dealer.  That was probably a special case though, I don't imagine the dealer made any money on my Trailblazer after that.

I would go to Carmax first, get the offer on paper, then 'shop around'.  See if any other dealers in the area might be willing to offer you more.  Although this is more the case if you are buying another car.  Or are you going carless?  Anyways, give it a week, if you don't get anything better, go back to Carmax and be done.  That is one nice thing about their offer, being good for 7 days.

[Freedom2016]

I'll offer my experience as a cautionary tale. Make what you will of it.

We bought a new family vehicle on 1/1/2013 and decided to sell my car (Mini Cooper) on our own (Craigslist) rather than trade it in. Two weeks later, an interested buyer wanted to take it to his mechanic for a condition report. I couldn't go with him that day so we swapped car keys - he left his car at our house, and took the Mini to his mechanic.

It was looking to be a straightforward sale...until he had an accident on the way. Claims it wasn't his fault. But not only did he decide not to buy the car (allegedly not for that reason), the car's value is lowered because we can't say it's an accident-free vehicle anymore, the insurance situation is a mess because the other driver disputes what happened, our guy is acting like he won't pay us back the other half of the damages estimate that insurance won't cover, and time is ticking away and we still have this stupid car on our hands. Insurance renews in 5 days and the inspection sticker expires on the 31st. Basically a cluster**** if ever there was one.

Ultimately we'll take him to small claims court if we have to. In the meantime this has become a huge pain in our ass. My big regret is not taking our car to AutoMax (same as CarMax, I think) to get an offer to buy. Now I'll never know what we might have gotten from them.

[N]

two things to add:

the carmax offer is good for 7 days, but of course, you can still take the car back there for another appraisal after that. I believe what they offer is based on some formula and so your new appraisal may be less or more than the other one, but its not like they refuse your car after 7 days.

at the stealership, or dealership, if you are trading in a car towards the purchase of another car, they are going to offer you more credit for it than if they were just buying it straight up, like carmax. could be several thousands more credit as a trade in, but are mustachians going to the stealership and buying brand new cars?

[Spork]

This is a bit of an old thread... but just curious:  How does a CarMax offer compare to nadaguides/edmunds/kbb trade-in figures?  The nearest CarMax is 2 hours away.  I'd consider driving over there if I had some baseline I could compare to.

[Runner77]

My experience: Edmunds - $41.5K; KBB - $48K; Carmax gave me $45K.

[Kriegsspiel]

Mine was pretty much in line with KBB.

[kendallf]

I just sold them my wife's 2004 Lexus IS300 a few weeks ago; they gave us slightly less than NADA retail, and about midway in the range I figured it'd go for on Craigslist after looking through other listings. 

For anyone who wanted to know the procedure if you have a lien on the vehicle, we had one on the Lexus through our credit union.  I got an offer from Carmax, accepted it, and the Carmax business office called the credit union and verified title and payoff info over the phone.  They cut me a check for the difference, I signed power of attorney papers to allow them to pick up the title from my credit union, and that was it.  I just got a notice from the credit union in the mail today that they'd released the title.

[the fixer]

In 2007 I sold a 1997 Subaru Legacy GT to Carmax. KBB said it was worth about $3000 (I don't have an exact record); Carmax gave me $1200 even though they said their assessment showed it to be in a condition consistent with its age.

[Spork]

In 2007 I sold a 1997 Subaru Legacy GT to Carmax. KBB said it was worth about $3000 (I don't have an exact record); Carmax gave me $1200 even though they said their assessment showed it to be in a condition consistent with its age.

Yikes. 

This is the situation I'd be in.  It's a 14 year old  fuel sucking truck.  KBB/Edmunds/NADA have mine in a wide range from 1500-2500.  This makes me think it's not worth the 2 hour drive.

[rtrnow]

In 2007 I sold a 1997 Subaru Legacy GT to Carmax. KBB said it was worth about $3000 (I don't have an exact record); Carmax gave me $1200 even though they said their assessment showed it to be in a condition consistent with its age.

Yikes. 

This is the situation I'd be in.  It's a 14 year old  fuel sucking truck.  KBB/Edmunds/NADA have mine in a wide range from 1500-2500.  This makes me think it's not worth the 2 hour drive.

It's not. I'm really surprised at the number of people on this forum that sell to carmax. You will ALWAYS be able to get significantly (as a %) more money doing it yourself. If you don't won't the hassle then that's a different story, but isn't that the whole point of MMM. Do things yourself, save money, retire, take over the world or maybe just retire.

[DanBrewMan]

I took my 2-month old car to carmax expecting to take some losses, but they were really much less than I anticipated and I received a reasonable offer.  See my other post for details:

https://forum.mrmoneymustache.com/ask-a-mustachian/should-i-sell-my-2-month-old-subaru-wrx/

[the fixer]

I should add that, as I understand Carmax's business model, they only sell cars to consumers which meet a certain quality standard. You don't find beaters on their lot, and that's part of their brand image: you know you can buy a Carmax car and get a used car that's still "nice." So if you try to sell them a car they could sell themselves, that's good for them and you're likely to get a better price.

If you try to sell an old car that they can't sell themselves through their main channel, they won't give you much because they have to auction it to some other middle man to get rid of it.

[rdy4er]

Caution, I sold my truck to carmax last week. They gave me a fair price for it. I deposited the check that day, now five days later the $10,000 check is returned by my bank. I called the carmax office and they said they will overnight me another check. We'll see if it shows up and if it is good. I said I would like a cashier's check from them but she said they don't do that.
I did a quick internet search and I am not the only one it's happened to. Next step will be through my attorney. A lot of needless aggravation.