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5 User Reviews

Founded in 1993, CarMax is one of the biggest used-car retailers in the country. The company, formerly owned by Circuit City started with one store in Richmond, Virginia, and has grown to include more than 200 locations nationwide. The chain focuses on an easy, hassle-free shopping experience for customers with an emphasis on no-haggle, upfront pricing.

Is CarMax a direct lender?

Yes, and no. The actual money is offered through several finance sources, including:

  • CarMax Auto Finance
  • Ally Auto
  • American Credit Acceptance
  • Capital One Auto Finance
  • Exeter
  • Santander Consumer USA
  • Wells Fargo Dealer Services
  • Westlake Financial Services

Every year, more than 200,000 people finance a car through CarMax. Shoppers can get pre-qualified online in less than ten minutes. The site includes a financing calculator to help estimate the rates and terms of your car loan based on your car, your availability to make a downpayment, and your credit score.

Loan terms last 6–72 months and excellent rates are based on 4.5 percent APR and less than 580 FICO at 20 percent APR, though this is an estimate to help people budget. Your rate offers may be different, depending on different factors. CarMax even lets borrowers apply with a co-applicant for financing, which isn't always an option at used car superstore type of retailers.

Keep reading for pros and cons of financing with CarMax.

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The Good

  • Inclusive Credit Options
  • Cosigner Option
  • Pre-qualify Online
  • 3-Day Payoff Plan

Inclusive Credit Options

At CarMax, financing is open to people with all types of credit. Rates are available from several different credit profiles, from subprime to excellent, but not everyone gets approved, and your individual rates will depend on your personal credit profile, and the car/amount you need to fund.

Finance applications (and approval) at CarMax are based on the following criteria:

  • application information
  • credit history
  • down payment amount
  • the exact car that you choose to apply for

Due to the company's no-haggle, straightforward goals, there is no haggling over financing and APR. Additionally, workers are sales consultants and they get paid the same, no matter which financing option you choose.

Down payments aren't required, but they are encouraged to help lower your monthly payments.

Cosigner Option

With CarMax, you can apply for financing with a co-applicant to help improve your loan offer. Not all used car superstore-type of dealers offer this. 

Pre-Qualify Online

Consumers can fill outa quick prequalification form online to get an idea of their borrowing options with CarMax. It's fast and easy and doesn't affect your credit score. Once you actually decide on a car and fill out a full application for credit, you will be provided with loan offers from CarMax and its lending partners within a few minutes. On top of online pre-qualification, borrowers also have access to make payments through the CarMax website.

3-Day Payoff Plan

If you find a better financing deal, or simply change your mind, CarMax offers a three-day payoff program. You can get an outside loan to replace your CarMax loan with no payment penalties.

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The Bad

  • Restrictions
  • Refinancing
  • Final Payment

Restrictions

When you finance with CarMax, it's clearly just for cars at CarMax. The company's financing program is solely for vehicles bought and sold at CarMax.

Refinancing

If you end up going with CarMax Auto Finance as your lender, just know that you will not have the option to refinance your purchase directly through this lender. However, you can always look to refinance the loan through an outside provider.

Final Payment

Shoppers selecting CarMax's in-house financing through Carmax Auto Finance should note that your final payment may be larger than previous monthly payments. For example, it may include late fees and other unpaid fees. Additionally, CAF uses simple interest retail installment contracts. If you made late payments, there is more unpaid interest than you would have had if you had made payments on-time.

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The Bottom Line

CarMax focuses on used cars and offers financing to people with all types of credit, depending on approval of course. It offers no-hassle shopping and minimizes any negotiation work that car buyers have to do.

You can even replace your financing within three days at no additional cost. However, it's important to note that CarMax financing is only for cars bought at this retailer.

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Drea Ferrari Albuquerque, NM

CARMAX DENY AND WONT HELP ANY COVID RELATED ACCOUNTS. EXTENSION IF ASKED ONLY GIVE US TWO TIMES WHICH REMIND U ITS NOT THAT THEY PAYING MY BILL !!!!! I I PAY MY CAR PAYMENTS AND REGARDLESS I HAVE NOT WORKED IN A YEAR AND WHEN I ASKED FOR EXTENSION CARMAX REFUSED .....THIS IS HOW WE IN THIS TOGETHER!!!!???? The BANKS AND BILLION DOLLAR COMPANIES ALWAYS WILL GET THEIR MONEY EVEN IF IS OVER OUR DEAD BODY...AND THE CITIZENS WILL ALWAYS WILL SUFFER. EVEN THOUGH THE ONLY REASON COMPANIES BECOME BILLIONAIRES ....IS THE PEOPLE!! Yes WE NAKE THEM RICH AND THEY LOOK US IN OUR EYES AND FLIP US OFF!!! If I could give ZERO STARS OR BELOW ZERO I WOULD. BE AWARE OF THE SHADY FINANCE !!!! IF IT IS NOT A KNOWN FINANCING COMPANY U GO WITH (ANY MAJOR BANKS) WHAT CARMAX OFFER IS CARMAX FINANCE AND NO ONE CAN TELL ME WHAT THAT IS. CARMAX SAY IS NOT A BANK!! WHAT???? SO WHAT IS IT???? AND THEY WONT GIVE ME AN ANSWER SO WHO KNOWS WHAT SHADY LOWLIFES IM DEALING WITH CALLED CARMAX FINANCE!!! I WAS LAID OFF IN MARCH 2020 DUE TO COVID 19 OUT OF WORK ALMOST A YEAR. STILL PAID ALL MY BILLS AND WHEN I ASKED FOR HELP CARMAX SAID THEY ONLY HELP TWO TIMES AND NOT MORE. I TOLD THEM TO TELL THIS TO THE GOVERNOR'S WHO CLOSE DOWN THE CITY ITS NOT OUR FAULT ..SHAME ON CARMAX !!

7 months ago

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