CarMax
A major U.S. used-vehicle retailer built around no-haggle pricing, vehicle inspection, consumer financing, and omnichannel purchasing.
Last updated October 23, 2026
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Overview
CarMax, Inc. is a United States automotive retail company specializing in the sale of used vehicles. The company is widely associated with a no-haggle pricing model, broad vehicle selection, standardized inspection procedures, consumer-oriented return policies, and integrated financing. It operates through two principal business segments: CarMax Sales Operations, which acquires, reconditions, markets, and sells used vehicles, and CarMax Auto Finance, which provides financing to qualifying vehicle buyers and supports the retail business. The concept originated inside Circuit City during the early 1990s. Company executives explored a large-format used-car business intended to make the traditionally fragmented and negotiation-heavy used-car market more transparent and consistent. The internal development project was known as Project X, and the first CarMax store opened in Richmond, Virginia, in September 1993. The launch was supported by advertising developed with the DeVito/Verdi agency, helping establish the brand’s emphasis on straightforward pricing and a less adversarial dealership experience. CarMax initially concentrated on used vehicles but also experimented with franchised new-car dealerships. It added a Chrysler franchise in 1996 and later expanded its franchise portfolio to include Mitsubishi, Toyota, and Nissan. By late 2021, however, the company had exited new-vehicle retail after selling its final new-car dealership in Kenosha, Wisconsin. This marked a clearer strategic focus on used vehicles, vehicle appraisal and purchasing, financing, auctions, service-related activities, and digital retailing. CarMax became a publicly traded business through a tracking stock issued by Circuit City in February 1997, when it had seven locations. It became independent from Circuit City on October 1, 2002, when CarMax was spun off to Circuit City shareholders. The company subsequently expanded its physical retail network and developed a large-scale acquisition and reconditioning system. Its stores generally use a superstore format with substantial vehicle inventories, while its appraisal operations allow the company to purchase vehicles from consumers and other channels even when the sellers do not buy a replacement vehicle. The customer proposition combines physical stores with digital tools. CarMax has developed an omnichannel platform through which customers can search, finance, purchase, arrange delivery, or collect vehicles using online and in-store interactions in different combinations. Its offerings have included home delivery and contactless pickup options. The company also operates customer-service centers and CarMax Auto Finance facilities, including operations in Kennesaw, Georgia. As of January 2025, CarMax operated 253 retail locations across 41 U.S. states. Vehicles marketed through the brand are subject to a company inspection process described as a 125-point inspection. CarMax has historically offered a limited warranty and a vehicle return policy intended to reduce purchase risk. The stated return period was reduced from 30 days to 10 days in 2024. The company also offers vehicle financing, extended protection products, vehicle appraisals, and wholesale or auction channels. In 2021, CarMax acquired the remaining shares of Edmunds.com, making Edmunds a wholly owned subsidiary and strengthening its position in automotive information and digital shopping services. CarMax competes with traditional franchised and independent used-car dealers, national used-vehicle retailers, online automotive marketplaces, and digitally focused vehicle sellers. Its brand differentiation rests on national scale, inventory breadth, standardized processes, fixed pricing, financing capabilities, and a comparatively consistent retail experience. The company has also received workplace recognition, including inclusion in Fortune’s 100 Best Companies to Work For list from 2005 through 2025.
History
CarMax was developed as an internal venture of Circuit City in the early 1990s, when the electronics retailer explored opportunities beyond its core business. Under the leadership of Circuit City chief executive Richard L. Sharp, a team worked for roughly a year on a new used-car retail concept. The project used the codename Project X and was informally nicknamed Honest Rick’s Used Cars by people involved in the development effort. The objective was to create a more organized and transparent alternative to the fragmented used-car dealership market, where vehicle prices and sales practices often varied considerably from store to store. The first CarMax store opened in Richmond, Virginia, in September 1993. The format used a large retail site, substantial vehicle inventory, fixed pricing, and advertising designed to make the car-buying process appear more straightforward and less confrontational. DeVito/Verdi served as the initial advertising agency and creative resource, producing the launch campaign and later television advertising for the early store network. The company’s early retail model emphasized selection and process consistency rather than conventional negotiation. CarMax expanded during the 1990s and initially pursued both used-vehicle sales and new-car franchise opportunities. It obtained a Chrysler franchise in 1996 and later added Mitsubishi, Toyota, and Nissan franchises by 1999. The company’s public-market development began in February 1997, when Circuit City issued CarMax tracking stock. This structure allowed the market to follow the automotive business while it remained within the Circuit City corporate framework. On October 1, 2002, CarMax was separated from Circuit City in a formal spin-off. CarMax shares were distributed to eligible Circuit City shareholders, alongside shares associated with the earlier tracking-stock structure. As an independent public company, CarMax continued developing a national used-vehicle network, centralized purchasing and reconditioning capabilities, vehicle appraisal services, financing operations, and wholesale channels. Its superstore model typically involved a large site with several hundred vehicles and a sizable sales and service workforce. CarMax’s business is organized around two principal operating segments. CarMax Sales Operations handles retail vehicle acquisition, merchandising, reconditioning, and sales. CarMax Auto Finance provides financing to customers and has operated from Kennesaw, Georgia. The retailer also obtains vehicles directly from consumers through appraisal operations, giving it a source of inventory beyond trade-ins connected to retail purchases. Vehicles sold through the network are subjected to a company inspection process described as a 125-point inspection, and the brand has used limited warranties and return policies to reinforce its consumer-risk-reduction proposition. Although the company maintained new-car franchises for a period, its strategic identity increasingly centered on used vehicles. In late 2021, CarMax sold its final new-vehicle dealership in Kenosha, Wisconsin, to the Rydell Company. During the same year, it acquired the remaining shares of Edmunds.com, converting Edmunds into a wholly owned subsidiary. The transaction connected CarMax’s retail and financing capabilities with a recognized automotive information and shopping platform. The growth of online vehicle marketplaces and digital-first used-car sellers changed the competitive environment. CarMax responded by developing an omnichannel platform that allows customers to move between online research, financing, store visits, home delivery, and pickup. The company has also supported contactless curbside collection and other remote transaction options. This approach preserves the physical scale of the superstore network while adapting the buying journey to customers who prefer to complete more of the process digitally. As of January 2025, CarMax operated 253 locations in 41 U.S. states, supported by customer-service centers and finance operations. The company remains a U.S.-focused used-vehicle retailer and a public company listed on the New York Stock Exchange under the ticker KMX. Its current brand proposition rests on national scale, vehicle choice, fixed pricing, inspection standards, consumer financing, appraisal services, and a combination of online and physical retail.
- 2026
Keith Barr becomes CEO and president
[1]Keith Barr assumes the roles of CEO and president in March 2026.
- 2025
Retail network reaches 253 locations
[1]As of January 2025, CarMax operates 253 locations across 41 U.S. states.
- 2025
Interim leadership transition
[1]David McCreight becomes interim president and CEO effective December 1, while Tom Folliard becomes interim executive chair.
- 2024
Money-back return period is shortened
[1]CarMax changes its used-vehicle return policy from 30 days to 10 days.
- 2021
Edmunds becomes a wholly owned subsidiary
[1]CarMax acquires the remaining shares of Edmunds.com.
- 2021
CarMax sells its final new-car dealership
[1]The company exits new-vehicle dealership operations by selling its Kenosha, Wisconsin, dealership to the Rydell Company.
- 2018
Used-car superstore expansion continues
[1]CarMax reports opening 15 used-car superstores during fiscal 2018 and plans another 15 for fiscal 2019.
- 2002
CarMax becomes independent from Circuit City
[1]The company is spun off from Circuit City on October 1 and operates thereafter as an independent public company.
- 1999
New-car franchise portfolio expands
[1]CarMax adds Mitsubishi, Toyota, and Nissan franchises to its new-vehicle operations.
- 1997
CarMax tracking stock is issued
[1]Circuit City issues the first CarMax tracking stock while CarMax has seven stores.
Products and positioning
A large-scale, consumer-oriented used-vehicle retailer positioned around transparent fixed pricing, broad inventory, standardized inspection, financing convenience, and an integrated online-to-store buying experience.
Automotive retail · 1993
Used vehicles
CarMax’s core offering is the retail sale of used cars, trucks, SUVs, and vans. Vehicles are sourced through consumer appraisals, trade-ins, auctions, and other acquisition channels, then prepared for sale through company processes. The assortment and fixed-price model are central to the brand’s national retail proposition.
Automotive finance
CarMax Auto Finance
CarMax Auto Finance is the company’s financing segment. It provides vehicle financing to eligible retail customers and integrates credit and payment options into the CarMax purchase journey. The operation supports the company’s ability to offer a combined vehicle-shopping and financing experience.
Automotive services
Vehicle appraisal and purchase
CarMax evaluates and purchases vehicles from consumers, including situations in which the seller does not buy another vehicle from CarMax. This appraisal activity supplies retail and wholesale inventory while giving consumers an alternative to private-party selling or conventional trade-in processes.
Automotive protection
Extended protection products
CarMax offers extended vehicle protection products alongside its used-vehicle sales. These products supplement the company’s inspection process and limited warranty by providing additional coverage options for customers who want protection beyond the standard purchase terms.
Automotive information and digital commerce · 2021
Edmunds
Edmunds is an automotive information and shopping business owned by CarMax. Its services provide vehicle research and digital shopping content that complement CarMax’s broader omnichannel strategy and help connect consumers with vehicle information before purchase.
Wholesale automotive
CarMax Auction
CarMax also operates wholesale auction activities through which vehicles that are not selected for retail sale can enter wholesale channels. This supports inventory management and provides a secondary disposition route for acquired vehicles.
Controversies
2020
CarMax reaches $1.6 million environmental lawsuit settlement
CarMax reached a $1.6 million settlement in an environmental lawsuit alleging illegal disposal of hazardous materials at its stores in California. The settlement includes civil penalties, investigative costs, and funding for supplemental environmental projects, and mandates training, reporting, and regulatory compliance.
Marketing campaigns
- 1993CarMax launch advertising
United States
DeVito/Verdi was hired as the initial advertising agency and creative resource for the CarMax launch. The campaign and subsequent television advertising presented the new retailer as a more straightforward alternative to conventional used-car dealerships.
Outcome. Supported the introduction of the brand and its early store expansion.
- No-haggle pricing positioning
United States
CarMax has consistently marketed fixed, no-haggle pricing as a central part of its customer proposition. The positioning seeks to reduce negotiation and make vehicle prices more comparable across the company’s network.
Outcome. Became one of the brand’s defining differentiators.
- Omnichannel vehicle shopping
United States
CarMax developed an omnichannel platform allowing customers to combine online research and purchasing with store visits, home delivery, and contactless pickup. The initiative responded to changing shopping habits and increased competition from online automotive businesses.
Outcome. Expanded the ways customers can complete a CarMax transaction.
Brand decisions
2025
Implement interim executive leadershipOtherBackground
CarMax arranged a temporary leadership structure during a chief executive transition.
Action taken
David McCreight became interim president and CEO, and former CEO Tom Folliard became interim executive chair effective December 1, 2025.
Aftermath
Keith Barr subsequently assumed the CEO and president roles in March 2026.
2024
Shorten the money-back return periodOtherBackground
CarMax had historically offered a 30-day money-back guarantee on qualifying vehicle purchases.
Action taken
The company reduced the return period to 10 days.
Aftermath
The change modified a prominent part of the customer purchase policy while retaining a post-sale return option.
2021
Acquire the remaining ownership of EdmundsM&ABackground
CarMax sought to strengthen its automotive information and digital shopping capabilities.
Action taken
CarMax purchased the remaining shares of Edmunds.com, making Edmunds a wholly owned subsidiary.
Aftermath
The transaction added an automotive research and shopping platform to CarMax’s broader digital and retail ecosystem.
2021
Exit new-car dealership operationsStrategyBackground
CarMax’s core identity and operating scale were increasingly concentrated in used vehicles.
Action taken
The company sold its final new-vehicle dealership in Kenosha, Wisconsin, to the Rydell Company.
Aftermath
CarMax completed its withdrawal from new-vehicle franchising and focused on used-vehicle retail, financing, appraisal, and related services.
2002
Separate CarMax from Circuit CityStrategyBackground
CarMax had developed into a substantial automotive operation within Circuit City and had previously used a tracking-stock structure.
Action taken
Circuit City spun CarMax off as an independent public company on October 1, 2002.
Aftermath
CarMax continued as a standalone listed used-vehicle retailer.
1996
Enter new-vehicle franchisingStrategyBackground
CarMax initially sought to broaden its automotive retail footprint beyond used vehicles.
Action taken
The company acquired a Chrysler franchise and later added Mitsubishi, Toyota, and Nissan franchises.
Aftermath
CarMax maintained new-car dealerships for a number of years before ultimately exiting that business.
Recent events
CarMax reports better-than-expected second-quarter results[4]
Reported:
CarMax reported better-than-expected second-quarter results, earning $1.16 per share on revenue of $7.88 billion, while analysts polled by FactSet expected a profit of 73 cents per share on revenue of $7.09 billion. The used vehicle retailer's shares gained more than 6% in premarket trading.
CarMax reaches $1.6 million environmental lawsuit settlement[3]
Reported:
CarMax reached a $1.6 million settlement in an environmental lawsuit alleging illegal disposal of hazardous materials at its stores in California. The settlement includes civil penalties, investigative costs, and funding for supplemental environmental projects, and mandates training, reporting, and regulatory compliance.
Sources4 sources
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