CarMax 2000 Annual Report Download - page 21

CARMAX
Making it easier for consumers at every step of
the car-buying process is the core of the CarMax
offer. Using what consumers have told us they
want
— in pricing,selection and service —
CarMax has set new industry standards for the
car-buying experience.
P A YING THE RIGHT PRICE
Independent auto industry experts continue to
find that consumers believe negotiating the right
price is the most difficult and unpleasant part
of buying a car. At CarMax,we have solved that
problem with low,no-haggle prices at every
stage of the transaction. On most cars,CarMax
used-car prices average $1,300 below Kelley Blue
Book prices; more than 80 percent of our new
cars are priced below manufacturer’s invoice.
For both new and used cars,all CarMax cus-
tomers receive these competitively low prices
without having to negotiate. Best of all,with
low,no-haggle pricing,CarMax sales consultants
can focus solely on helping customers find the
vehicles that meet their individual needs.
As part of the no-haggle philosophy, trade-ins
are handled as a separate transaction. In fact,
consumers may sell their car to CarMax whether
they are buying a car from us or not. On virtually
every car we appraise,CarMax provides a writ-
ten purchase offer that is good for seven days or
300 miles. Customers may apply their appraisal
voucher to a purchase or simply receive a check.
This process increases the trust between CarMax
and the consumer,provides our most important
source of used cars and allows us to match our
inventory with the tastes of local purchasers.
The same sales consultant who facilitates the car
purchase also explains our no-haggle,competitively
priced financing and warranty programs. For
financing,the sales consultant simply enters basic
credit information directly into the CarMax system.
First North American Credit,CarMax’s finance
operation,and Bank of America provide primary
credit. Customers approved by both sources can
see and select from the terms and rates offered.
Sub-prime financing is available from a variety of
third-party lenders. Warranty terms and rates also
are provided online,and the customer sees and
selects from the available choices.
FINDING THE RIGHT CAR
CarMax superstores offer consumers the broadest
selection in the used-car industry. Consumers
may select from as many as 600 used cars on a
single CarMax lot,choosing from a wide variety
of subcompact, mid-size or luxury cars,sport
utility vehicles,trucks and minivans. To assure
that the selection reflects the preferences of
consumers in the market, the majority of our
vehicles are purchased locally, either from con-
sumers in the market or at regional auctions.
As a result,we are able to offer the brand names
and vehicle models that are in high demand.
CarMax used cars are less than six years old and
have fewer than 60,000 miles. They generally
range in price from $6,500 to $30,000. We also
offer a selection of top-quality older cars for
the most cost-conscious consumer. Called
ValuMax®,these vehicles are either older than
six years or have more than 60,000 miles.
Their prices range from $4,000 to $19,000.
In addition to selling used cars,CarMax operates
20 new-car franchises. Fifteen are integrated or
co-located with CarMax used-car superstores.
Five franchises operate as stand-alone new-car
locations. As with used cars,CarMax employs its
low-price,no-haggle selling process with new
cars. At all new-car locations,the full selection of
the manufacturer’s models is available. CarMax
new-car franchises include Chrysler,Plymouth,
CIRCUIT CITY STORES, INC. 2000 ANNUAL REPORT 19
CarMax has set new standards in automobile retailing. In
pricing, in selection, in quality and in service, more and
more consumers are finding their way is The CarMax Way.