Investopedia’s Rating 3.8 Our Take CarMax offers a streamlined, easy way to buy a car entirely online if you choose—complete with an auto loan financing package and everything. It’s a good choice if you’re not too picky about the car or the customer service, but for most people, we’d recommend keeping your options open because some customers indicate warning flags about how the company operates. Pros and Cons Pros Works with partner lenders No payments for up to first 45 days Flexible online car-buying experience Limited purchase and financing warranties Cons Not available in all states Negative company reputation Can only be used to buy CarMax cars No co-signers allowed; only co-borrowers Key Takeaways Company Overview CarMax was founded in 1993 by Rick Sharp, who at the time was concurrently serving as CEO of Circuit City. Circuit City may have closed, but CarMax persisted and grew. Today, it’s the largest online retailer of used cars, operating 241 stores in 41 U.S. states, mostly sprinkled in a U shape around the country with a noticeable gap across the Dakotas, Wyoming, and Montana. As a dealership, CarMax sells its own used vehicles and works with a network of partner lenders to finance them, although you can opt to use your own financing. That means you won’t be able to use CarMax financing to purchase a non-CarMax car, of course. In recent years the company has come under fire for its poor quality control and service practices, with several class-action lawsuits filed against the company. overall rating 3.8 Table of Contents CarMax Auto Loan Review 2024 Pros Explained Cons Explained Loan Types Time to Receive Funds Borrower Requirements Vehicle Requirements Loan Features Customer Service Customer Satisfaction How to Apply Alternatives Final Verdict Methodology See our picks for the best auto loans in a variety of categories: A three-day loan refund sounds nice, but in reality, lining up another auto loan may take longer than that unless you already have one in the works as you’re purchasing the car. Since CarMax sells used cars, it only offers one type of auto loan. It only takes five minutes or less to get pre-qualified for a CarMax loan, but the company doesn’t disclose how long it takes for a full application after that. If you are approved, your loan may be funded on the same day. CarMax doesn’t provide very many details about the qualifications you’ll need to meet in order to qualify. However, credit is a barrier to many would-be car buyers, and CarMax is relatively forgiving of low credit scores. CarMax loans can only be used to purchase CarMax cars, so you’ll be limited to whatever you can find in its online catalog. CarMax offers a few nice touches for its loans, including: If you need help in qualifying for a car loan or if you want someone else to be listed as a co-owner of the car, CarMax allows you to apply with a co-borrower. It does not, however, allow you to apply with a co-signer. A co-signer and a co-borrower are not the same thing; a co-borrower will be listed on the title as a co-owner of your car, while a co-signer will not share ownership rights to your ride. CarMax offers a useful suite of customer support channels. You can get help through regular routes like a phone call or email, but you can also reach the company via live online chat or even social media. However, many customers on publicly available review websites, like Trustpilot, have complained that reaching specific team members during their car purchase can be difficult. CarMax does not have the best reputation for customer satisfaction, at least according to reviews from customers on some websites. Customers frequently complain that CarMax representatives are often hard to get ahold of and the vehicles they purchased don’t show up as advertised, although there are many happy customers as well. The company has also been the target of multiple class-action lawsuits. In one case regarding CarMax’s 125+ Point Inspection, claimants alleged that CarMax didn’t disclose certain important vehicle problems before purchase. In another lawsuit, CarMax is alleged to have knowingly sold cars that failed to meet emissions standards to unlicensed dealers, who then sold them to CarMax customers. CarMax makes buying a car super simple—a little too simple, in fact. In order to get the most out of your car-buying experience, we recommend taking a few extra steps during CarMax’s application process. CarMax isn’t one of our top-rated auto loan lenders, and given its recent history of legal problems and customer complaints, we’d recommend considering other dealerships and auto loan lenders first. But if you don’t care too much about that and just want a car—any car—quickly and easily, CarMax may be your best bet. Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs. We also conducted a survey of 1,016 auto loan borrowers for attitudes and opinions about lenders and the loan approval and disbursem*nt process. See our full auto loan review methodology for more information. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. CarMax. "Get Financing Results Without Impacting Your Credit." CarMax. "Annual Report Fiscal Year 2023." Office of the Attorney General, State of Florida. "Multistate Action Against CarMax." ClassAction.org. "CarMax Knowingly Sold Cars That Failed Inspection to Unlicensed Dealers, Class Action Claims." Truth in Advertising. "Class Action: CarMax’s 125+ Point Inspection." CarMax. "Manage Your CarMax Auto Finance Account." CarMax. "Find the One, Buy It Online." CarMax. "Why CarMax." Trustpilot. "CarMax Reviews." Better Business Bureau. "CarMax, Inc." CarMax. "The Ultimate App for the Used Car Shopper." Upsolve. "Co-signer Rights, Responsibilities, and Considerations." CarMax. "FAQ & Support." Pros Explained
Cons Explained
Types of Auto Loans Offered by CarMax
Used Auto Loans
Time to Receive Funds
Borrower Requirements
Vehicle Requirements
CarMax Auto Loan Features
Co-Signers and Co-Applicants
Customer Service
Customer Satisfaction
How to Apply for a CarMax Auto Loan
Alternatives to CarMax
CarMax Carvana AUTOPAY Loan Types Offered Used Used New, used, refinance, cash-out refinance, lease buyout, motorcycle States Available All states and D.C. except AK, AR, HI, MT, SD, ND, WV, WY, VT All states and D.C. except AK, HI All states and D.C. Used APR Range Not disclosed Not disclosed 2.99% and up Used Loan Amounts $5,000–$100,000 Not disclosed $2,500–$100,000 Used Loan Terms 36–72 months 36–72 months 24–96 months Minimum Time to Receive Loan Same day 1 day Not disclosed Recommended Minimum Credit Score 500 500 500 Maximum Accepted Mileage Not disclosed 140,000 miles 150,000 Maximum Accepted Age Not disclosed Varies 10 years Maximum Accepted Loan-to-Value Ratio Not disclosed Not disclosed Not disclosed Final Verdict
Methodology
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