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CarMax Auto Finance Review

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When you’re in the market for a car, the process is more than picking a vehicle, signing some paperwork and walking out with the keys.

It’s a significant investment, and it takes time and research to find the right deal. Part of that process is choosing the best auto loan — and financing company — that can meet your financial needs without blowing your budget or charging you an exorbitant interest rate.

We had trouble getting definitive answers from CarMax Auto Finance to properly break down its financing, but we’ll share what we learned.

About CarMax Auto Finance and its auto loans

CarMax Auto Finance, the lending arm of used car dealer CarMax, is headquartered in Atlanta.

CarMax was created in 1993 by Circuit City. It is the largest dealer of used cars in the country, selling more than 8 million vehicles since its inception. The company has 218 brick-and-mortar locations in 41 states.

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, Capital One, Santander and Wells Fargo, among others.

CarMax Auto Finance: At a glance

CarMax does not have many specifics on its website regarding APRs, credit score minimums and loan amounts. Here are a few things we learned mostly from its online calculator, which we’ll touch on after:

  • Possible APR ranges: 2.95% to 20.00%
  • Possible terms: 36 to 72 months
  • Possible loan amounts: $5,000 to $150,000
  • Those with credit scores below 580 can find financing through CarMax, but at a very high APR

For those with excellent credit scores — 800 and above — CarMax’s website shows an offering with a 2.95% APR (though it states it’s an estimate based on your credit rating). If you have a credit score below 580, the calculator shows an APR of 20.00%.

CarMax’s email response to LendingTree, though, said customers can receive APRs higher or lower than what is published on the website, so don’t take these as absolute maximums or minimums. The possible APRs are high compared to other lenders.

The calculator shows four term ranges:

  • 36 months
  • 48 months
  • 60 months
  • 72 months

And it shows financing is offered between $5,000 and $150,000, though CarMax did disclose to LendingTree that the ranges in the calculator aren’t reflective of its partners’ credit policies, so you’ll have to contact the company for any specifics.

It does not require a down payment, though putting money down will help reduce the cost of your loan in the long run. CarMax does offer financing to first-time buyers and will allow co-buyers and co-applicants.

Once you choose the car you want from CarMax’s inventory, you can apply for financing through CarMax Auto Financing or through its third-party partner lenders. Those lenders are:

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

You can also come with your own financing from outside credit unions or banks. CarMax Auto Finance does not offer refinancing, and it only finances vehicles that are purchased at CarMax.

When you apply for a loan at CarMax, most financing offers come back in 20 minutes or less. You get offers from both the outside lenders (listed above) and CarMax Auto Finance at the same time and can decide which (if any) offer is right for you. CarMax said it doesn’t negotiate the financing, and that both you and the associate get the financing offers at the same time. CarMax’s PR team told LendingTree that the company doesn’t pay its associates based on the financing that you choose. They instead get a flat commission based on the sale of the vehicle.

Meanwhile, the company is starting to roll out a personalized car-buying experience where customers can handle everything — from financing to the trade-in to paperwork — from home and have their vehicle delivered to their home or workplace. Customers can also opt for expedited pickup at the store after completing some of the car-buying process from home, including financing. It is available in select cities in Mississippi and Virginia as well as:

  • Boston
  • Hartford, Conn.
  • Manchester, N.H.
  • Portland, Maine
  • Providence, R.I.
  • Alabama
  • Florida
  • Georgia
  • Iowa
  • Louisiana
  • Nebraska
  • New York
  • North Carolina

CarMax also offers a Three-Day Payoff Program. If you find a better loan offer outside of the financing offered at CarMax, you have three business days to replace it, penalty-free.

Remember that when shopping for any vehicle, it’s crucial to know what you can afford and to shop around for the right car loan for you.

How to apply for financing

When you apply for financing at CarMax, you should come to the dealer with the following:

  • A valid driver’s license
  • The details of the car you want to purchase off the CarMax lot, though the associate you are working should already have these details, including the make, model, price, age and mileage of the vehicle
  • Your Social Security number
  • Your down payment if you’re making one
  • Employment and income details

If you are applying with a cosigner or co-buyer, the person applying with you will need to go with you and provide their personal details.

You can prequalify online through CarMax and shop online for vehicles that meet your needs and budget.

Once you choose a loan from CarMax, you can make payments online, by mail, by Western Union, MoneyGram or via the CarMax mobile app. The app offers you the ability to manage your maintenance schedule, make payments on your CarMax Auto Finance account and keep track of important car-related documents.

The fine print

CarMax doesn’t readily offer certain information on its website regarding rates, terms or loan amounts. There are how-to articles and links for used car options, but its website is severely lacking.

To qualify for CarMax financing, you have to purchase a car at CarMax. There are no fees for applying or prepayment penalties for paying off your car loan early, according to a spokesperson.

CarMax offers a few add-ons when purchasing a car, such as a seven-day return policy on any vehicle you purchase. It also offers a 90-day or 4,000-mile limited warranty (whichever comes first) on a vehicle you purchase at CarMax, regardless of the financing you choose. It also offers an optional extended warranty that covers a variety of repairs.

Pros and cons of financing through CarMax Auto Finance

While CarMax’s marketing says it is all about making buying a used car easy and transparent, we had a difficult time getting detailed information from its team. Here are some of the highs and lows of CarMax Auto Finance.

Highlights of CarMax Auto Finance

  • Ease of use: You can shop online for the right vehicle for you and prequalify for financing.
  • Multiple offers: You get financing offers almost immediately from both CarMax Auto Finance and its partner lenders. If you have less-than-stellar credit, you may still have a chance at getting an offer.
  • Variety of repayment methods: If you decide to get a loan from CarMax Auto Finance, you have plenty of options to pay, including the website, mail, Western Union and MoneyGram.
  • Three-day grace period to switch lenders: You get three business days to switch lenders. CarMax’s Three-Day Payoff Program allows you to shop for better financing within three days of purchasing a CarMax vehicle.
  • Co-buyers and cosigners are OK: You can have a cosigner or co-buyer. If you’re a first-time buyer or purchasing a car with a co-buyer, CarMax Auto Finance allows for that.

Lowlights of CarMaxAuto Finance

  • Lack of clear information on terms and APRs: That information isn’t readily available to consumers on the CarMax site. You’ll have to use the calculator and even then, APRs may be higher or lower.
  • No-haggle doesn’t always mean the best deal: Like any financial transaction, it pays to do your own legwork. Though you won’t have to negotiate with CarMax Auto Finance, you might be able to find a better financing deal elsewhere.
  • CarMax does not do refinancing: If you want to refinance your used car, you’ll need to go to another lender.
  • CarMax does not finance vehicles bought elsewhere: If you want CarMax financing, you have to buy a CarMax vehicle.

The bottom line: Who is CarMax Auto Finance best for?

You might be the right fit for CarMax Auto Finance if you want a no-haggle used car loan and are looking to buy from CarMax. If you want the ease of dealing with one location and company from end to end, CarMax Auto Finance could be right for you. Be prepared to make phone calls or ask for more details at the lender, though.

You might not be a good fit for CarMax Auto Finance if you like to haggle and want to be sure you are getting your best financing deal possible. CarMax does allow you to bring in your own lender and purchase a vehicle at its stores. CarMax Auto Finance might not be for you if you want a transparent process with upfront APRs and terms. To know what the APRs and terms might be from CarMax Auto Finance, you’ll need to apply for its loans and wait for a response.


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