Looking At Demuro's Carmax Article

Kinja'd!!! "Satoshi "Zipang" Katsura" (sundowne36)
05/20/2014 at 16:21 • Filed to: Carmax, Doug Demuro

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Wasn't there, at some point horror stories related to Carfax or was it a long time ago before the warranty came in?

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DISCUSSION (7)


Kinja'd!!! Jacques L' Autre > Satoshi "Zipang" Katsura
05/20/2014 at 16:28

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I think most of the horror stories I've ever heard pertained to the sometimes way too high prices they charge for their cars. I was happy with my experience with them though, and think I got a fairly good deal on the car I bought, and I didn't even get a warranty.


Kinja'd!!! Satoshi "Zipang" Katsura > Jacques L' Autre
05/20/2014 at 16:35

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I see. What car was it - out of curiosity's sake.


Kinja'd!!! Textured Soy Protein > Satoshi "Zipang" Katsura
05/20/2014 at 17:02

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The Carmax warranty Doug talks about in his post isn't all that different from any other aftermarket extended warranty you can buy from any number of warranty companies out there.

It is very much an insurance policy against the cost of future repairs to the car. You pay a certain amount up front, and if you need the car to be fixed the warranty company covers the cost.

Regular car insurance companies make money because the total amount of money they pay out in claims is lower than the amount of money they collect in the form of premiums.

Warranty companies make money because for every one person who gets a bunch of repairs done on their car that cost more than what they paid for the warranty, there are way more people whose repair costs during the warranty period are lower than what they pay for the warranty.

Like Doug mentions in his post, for every Range Rover with malfunctioning air suspension Carmax sells an extended warranty on, there are way more suckers who buy the warranty for Civics, Corollas, Camrys and Accords and never recoup their costs.

The main difference with Carmax's extended warranty, is they offer it for pretty much a fixed cost on any car they sell. Whereas an extended warranty, like a regular car insurance policy, bases the cost of the warranty on the specific kind of car you're buying the warranty for.

If you look at the total purchase cost of an expensive-to-repair used car as the cost of the car plus the cost of the warranty, you can come out ahead by going to Carmax, compared to buying the used car from some other dealer or private party and then getting your own extended warranty to go along with it.


Kinja'd!!! Jacques L' Autre > Satoshi "Zipang" Katsura
05/20/2014 at 17:21

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'04 Honda Civic Si

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Kinja'd!!! Satoshi "Zipang" Katsura > Textured Soy Protein
05/20/2014 at 18:31

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So it's financially a bit safer to go with Carmax, then?

I'unno, I'm a little worried considering the hilarious scams anyone would see on TV (I can't remember what they were but they were not Carmax, that's for sure) and knowing how some automatics rely on DCT (they don't cover clutches in manuals)...

edit: I can't proofread


Kinja'd!!! Textured Soy Protein > Satoshi "Zipang" Katsura
05/20/2014 at 18:37

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Carfax and Carmax are two different things.

Carmax is the dealership chain, Carfax is the vehicle history reporting thing.

I'd say rather any one overall general rule with where to get your extended warranty, it makes sense to shop around and read the fine print.


Kinja'd!!! Satoshi "Zipang" Katsura > Textured Soy Protein
05/20/2014 at 18:45

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Whoops, messed that up. Thanks for the catch.