CarMax employs Saturnlike preset prices, so customers who regard the usual wheeling and dealing as slightly more unpleasant than a vacation in Kabul can avoid that hassle. Some would-be CarMax customers are put off by the notion that the company's prices are fixed. And CarMax may not be the place to shop for bargain-basement transportation because, like manufacturer-certified used cars, CarMax cars are inspected and warrantied, so tend to be above-average examples. Prices still average $1000 below "Kelley Blue Book," asserts Kunkel.
CarMax buys vehicles only within certain age and mileage limits and claims it won't sell a car that's been involved in a major accident. It's also important that the sales staff's commissions are based on units, not price or the house profit. So a salesperson has no personal incentive to sell you the priciest piece on the lot, as opposed to the cheapest. These approaches appear to resonate with buyers, as the company sold $3.5 billion worth of pre-owned hardware last year.
While surfing the Net, shoppers might paddle over to the eBay wave. Buying a car sight-unseen is counter to everything we've all been taught, but as online shoppers have gained confidence in eBay's process and business practices, they've bought more cars, and more mainstream cars, via the online auction: Last year, eBay moved nearly one million vehicles, most offered for sale by dealers.
eBay puts a one-year limited warranty on cars sold on its site and will buy back any car that's misrepresented. Extended warranties are also available for a fee, and professional inspectors can examine potential purchases for buyers before they commit.
At first, eBay handled mostly collector cars and exotics, but now the service's top-selling models mirror the top-selling new cars, says Simon Rothman, vice president and senior general manager of U.S. operations. Late-model cars trade readily. "Our average selling price is right at the industry average for used cars--just a little under $10,000," he says. Shopping on eBay can turn up cars listed by local dealers, which is convenient. But even when the cars are on the other coast, shipping charges can be as low as $500 to $1000, which is less than the auction's price advantage over other avenues for buying used cars, claims Rothman.
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