CarMax Auto Finance Review

CarMax Auto Finance: At a Glance
Best for: Those purchasing a used vehicle through CarMax.

lender	APR	Amounts	Term	CTA
	Possible APR 4.00% - 20.00%	Loan Amounts $5,000 - $150,000	Loan Terms 36 - 72 months	Compare Offers

CarMax is the largest dealer of used cars in the country, offering a wide range of financing options. Now that it has expanded to offer fully remote car purchases, it could be convenient to buy and finance a car in one place, online, without leaving your living room.

It’s a significant investment, so you want an auto loan — and financing company — that can meet your needs without blowing your budget or charging you an exorbitant interest rate. If you’re looking for CarMax financing reviews, we’ll break down the details and give you some CarMax finance alternatives.

CarMax Auto Finance pros and cons

If you’re looking for a no-haggle used car that you can buy online or at one of 220 brick-and-mortar stores, CarMax could be a good fit. It offers competitive starting rates through its own lending arm, CarMax Auto Finance, or one of its eight lending partners. But it’s not the only way to find a used car — you might be able to find better prices and lower rates elsewhere.

CarMax financing pros

Low credit scores accepted: If you have poor credit, you’re often shut out of auto financing options, but CarMax makes an attempt to work with all types of credit profiles.

Competitive APRs: For the most qualified borrowers, CarMax’s starting rate matches or is lower than other large lenders, including chief rival Carvana. Compare CarMax rates against auto loan offers you get for yourself — CarMax accepts external auto loans, cash, checks and debit cards.

Convenience: You can shop and complete the transaction online, then either have the car delivered to you or schedule an express pickup.

CarMax financing cons

CarMax cars only: CarMax financing is only available to those who are buying a car from CarMax.

High APRs: CarMax financing for bad credit is possible but can be expensive. This may be true no matter where you borrow, but maximum APRs vary from lender to lender. That’s why it’s important to shop around for your best rate.

No negotiation: No haggling doesn’t always mean you’re getting the best deal. In general, CarMax vehicle prices are competitive, depending on where you live. But you never want to pay more than a car is worth. Research car values and compare offers with those from other dealers or private sellers before making your purchase.

CarMax financing: how it works

If you are interested in buying a car from CarMax, and using a loan from CarMax Auto Finance or its partners to pay for it, you’ll first need to pick out a vehicle.

Step 1: Pick out a car

You can easily browse cars by location or vehicle type on the CarMax website. Before you fall in love with any specific vehicle, it’s wise to figure out how much you can afford. You can do this by using the CarMax preapproval tool, which will initiate a hard pull on your credit. This can have a small negative impact on your credit report, and is a routine step in securing financing from almost any lender, though it may come later in the process with other lenders. If you would prefer to get a ballpark number without going through the CarMax preapproval process, you can estimate payments and APRs using the CarMax payment calculator.

Step 2: Decide how you want to receive the car

You’ve figured out your budget and picked out a car. From here, you have four options:

• Hold. When you put a hold on a car, you’re reserving a test drive. You must schedule your test drive for a date within seven days.
• Express Pickup. This service allows you to complete most of your paperwork online and schedule a pickup appointment that fits in your schedule. When you visit, you’ll park in a designated express pickup parking space, turn in your trade-in if you have one and take off in your new car.
• Ship. If the car you want is not at your local CarMax location, you can choose to have it sent there. If the car is close by, you may pay nothing. For longer distances, there may be a fee. CarMax says this fee is usually between $99 and $999, though there are a few occasions where it can be as high as $1,999. This is in addition to a possible processing fee up to $399, depending on the state where you live.
• Delivery. Don’t want to go to a CarMax location at all? You may also have the option to get the vehicle delivered to your home or place of work for $0. Delivery is available within 60 miles of most CarMax locations, but not all. CarMax has stores in 41 states.

Whichever option you pick, you’ll be able to keep a test drive vehicle for up to 24 hours without any obligation to purchase the vehicle.

Step 3: Get an estimate for your trade-in

If you’re trading in a car at the same time you’re buying a new one, you could sell it to CarMax. It will even accept your old car even if you don’t buy from CarMax. Appraisals can be completed online or you can make an appointment to bring your car in to CarMax. Once you receive an offer, you have seven days to accept or reject it.

Step 4: Choose a financing option

CarMax offers loans through CarMax Auto Finance as its captive lender, a lender that is owned and operated by CarMax. It also has relationships with third-party lenders, including:

• Ally Bank
• American Credit Acceptance
• Capital One
• Chase Bank
• Exeter Finance
• Santander Bank, N.A
• Wells Fargo Bank
• Westlake Financial Services

CarMax Auto Finance vs. outside lenders

As we mentioned earlier, you don’t have to use CarMax or one of its partners to finance one of its cars — you can finance through an outside lender, too. Your sales rep does not make more or less of a commission based on your lender. In fact, even if you sign with CarMax Auto Finance, you have three days to find a better deal. If you do, CarMax will release you from the loan agreement without charging you any fees for backing out. You also have up to 30 days to return the vehicle for a full refund if you decide you don’t like it for any reason, as long as you haven’t driven more than 1,500 miles.

Step 5: Select an optional service plan

All CarMax vehicles come with a 30-day money-back guarantee and a 90-day, 4,000-mile limited warranty. However, some vehicles may come with manufacturer’s warranties that may extend for a longer period of time.

If you want even more assurance, you can purchase or finance a MaxCare extended service plan. This optional service plan covers the engine, transmission, electrical systems and more. The cost of the service plan will vary depending on your vehicle and the plan you choose. That’s in addition to a deductible you’ll need to meet if and when you use your MaxCare plan — deductibles are between $50 and $300. The lower the deductible, the higher the cost of the plan. You can cancel the service plan at any time.

How to apply

If you decide to apply for financing through CarMax, you’ll be asked for basic information, including your:

• Name
• Address
• Social Security number
• Phone number
• Income information
• Employer information
• Co-applicant information (if you have one)

CarMax vs. competitors

There are very few places that allow you to complete the entire car-buying process online. CarMax is one, joined by competitors Carvana and Vroom. Vroom does not publicly share its auto loan rates, making it difficult to compare, but it does offer terms as short as 12 months. And though it’s convenient to get your car and financing in the same place, online, lenders like LightStream offer online applications, too, for rates starting at 3.99%, if you enroll in autopay.