Companies Similar to CarMax. There is a good chance that even the average American automobile owner has heard of CarMax.
CarMax has become one of the most well-known car dealerships in the United States because to extensive advertising and positive word-of-mouth from satisfied customers.
While they do fill a specialized market need, they are not alone. At least twenty other businesses function in a manner analogous to CarMax.
About CarMax
The headquarters of CarMax, Inc. are located in the USA, where they operate as a used-car retailer. It operates in two distinct markets.
This includes CarMax Sales Operations and CarMax Auto Finance. CarMax’s corporate offices are located in Richmond, Virginia.
The automobile financing division, however, is headquartered in Kennesaw, Georgia.
It was while Richard L. Sharp was still CEO of Circuit City Stores, Inc. that the firm branched off to create CarMax.
For the 1991 skunkworks crew, Project X was also known as Honest Rick’s Used Cars. Ronald l. Moore, a Richmond-based consultant hired to research industries outside of electronics, came up with the idea for CarMax.
In September 1993, CarMax launched its first retail facility in Richmond, Virginia. Since then, it has grown to 225 outlets across the United States.
There were no upfront costs associated with the company plan. When it was discovered that buyers didn’t mind paying transaction fees, the policy was revised to reflect the reality.
Typically, the space requirements for a CarMax dealership are around 59,000 square feet, and the dealership itself will stock at least 300 vehicles.
CarMax backs every vehicle it sells with a thirty-day return policy and a ninety-day warranty. If the customer changes their mind about the financing during that time, they can do so without incurring any fees.
The Competition
Despite their dominance in the used-car market, CarMax isn’t the only game in town. Consumers’ ever-evolving purchasing habits have led to a proliferation of online-only businesses. There are at least twenty other companies that use the same business strategy as the one that started in 1993.
1. Asbury Automotive Group
Formed in 1995 by automotive industry veteran David W. Hult, Asbury Automotive Group is one of the longest continuously operating dealerships in the country.
Having over eighty dealerships and ninety-six franchise locations, this company, headquartered in Atlanta’s Duluth, Georgia, is the sixth largest automobile distributor in the United States.
2. Auto Trader (Companies Similar To Carmax)
Very few families haven’t at least heard of Auto Trader. Auto Trader immediately rose to prominence as the go-to marketplace for car buyers and sellers in 1997, with publications available to anyone interested in perusing the latest offerings.
The company, which goes by the name Autotrader, is a subsidiary of Cox Automotive, which is a division of Cox Enterprises. Their online operation is similar to that of CarMax. However, there is no fixed site for it. When compared to a traditional car dealership, Auto Trader acts more like a broker.
3. AutoNation
Founded in 1996, AutoNation is currently one of the largest retailers of both new and pre-owned automobiles in the United States. It’s similar to CarMax in that it’s an online marketplace where people may haggle over prices.
AutoNation, like CarMax, has access to a large number of people in the United States who are in the market to purchase, sell, or trade a vehicle.
4. Bridgecrest Acceptance Corporation (Companies Similar To Carmax)
DriveTime Automotive Group Inc. has a subsidiary company called Bridgecrest Acceptance Corporation. The business model is somewhat similar to that of CarMax in that it assists people in securing auto loans. Customers working with DriveTime, as well as their partners and affiliates, have the option of using this service as their primary method of financing.
5. Carfax
Carfax is a web-based service established in Centreville, Virginia, that gives details about a vehicle’s past owners and maintenance. This is now a go-to reference for car shoppers, sellers, and mechanics alike.
Is Carfax comparable to CarMax, then? Carfax not only tells you everything you need to know about a car, but it also shows you how to get your hands on the report. American and Canadian consumers alike have found this to be a useful service, as they both want to make sure they are getting a high-quality automobile.
6. Cars.com (Companies Similar To Carmax)
Cars.com, with headquarters in Chicago, Illinois, is an online automobile classifieds advertising service that has been online since 1998.
One of the most reputable auto listing advertising agencies. DR Media Holdings owns Cars.com as a wholly-owned subsidiary.
Cars.com’s primary mission is to facilitate transactions between buyers and sellers. Many car lots have taken use of the company’s services, which have helped them compete with industry giants like CarMax by providing customers with access to a wide variety of vehicles. Similar to CarMax, several different kinds of financing are made available to customers on the site.
There is more compatibility between Cars.com and Auto Trader. Even yet, they accomplish essentially the same goals and are otherwise comparable to one another in terms of the online car shopping services they provide for CarMax customers.
7. Carvana
Carvana, headquartered in Tempe, Arizona, is an online marketplace for pre-owned automobiles and was named the fastest-growing company of its kind by Fortune 500 in 2021.
In 2012 its current incarnation was established by Ernest Garcia III, Ben Huston, and Ryan Keeton. Another used car dealer and finance provider, DriveTime, provided the funding for this venture.
In November 2013, Carvana introduced the world’s first automobile vending machine. In Nashville, Tennessee, they converted it to a fully automated coin-operated commemorative version two years later.
Shortly after Calypso went public and began trading on the New York Stock Exchange in 2017, Carvana bought out its competitor. Through this purchase, Carvana was able to expand its access to vehicle data and improve its analytic capabilities.
It expanded into the Car360 industry in 2018. Car360 provides smartphone-based technology that combines 3D computer vision, machine learning, and augmented reality with the ability to take photographs of vehicles.
Carvana saw a chance to differentiate itself from the competition by providing touchless delivery and pick-up beginning in March 2020 when the COVID-19 outbreak swept across the United States.
The closure of physical car showrooms accelerated this trend, increasing sales by 25%. This allowed Carvana to increase their business to the point where they currently have 32 vending machines spread out over the United States.
8. Copart (Companies Similar To Carmax)
Copart, which has been around since 1982, is both an online and offline vehicle auction and dealership. It, like CarMax, is mostly focused on selling used cars. Dallas, Texas serves as the organization’s home base. If you need a payment plan to buy a car from Copart, you can get one just as you would at CarMax.
Copart has put greater effort on being an online retailer since COVID-19. Having a vehicle delivered to the customer is part of this service.
9. Cox Enterprises
Cox Enterprises is the parent company of both Auto Trader and Kelley Blue Book. This automobile research and appraisal firm also invested in Go Financial.
Cox was established in 2011, and after separating into its own corporation in 2013, it has expanded to cover all 46 states in the United States.
Cox Enterprises’ starting point is analogous to CarMax in that both provide customers with several alternatives when it comes to purchasing and financing automobiles.
The corporation was established in 1898 by James M. Cox and had its beginnings in Dayton, Ohio. Cox Enterprises has a significant commercial and political impact.
Cox Automotive is a division of Cox Enterprises that offers dealers and customers digital marketing and vehicle remarketing services.
10. DriveTime Automotive Group Inc. (Companies Similar To Carmax)
The headquarters of DriveTime Automotive Group, Inc. is located in Tempe, AZ. Carvana was spun off in 2012, and it is a key shareholder in that company as well. The company was established in 1977 under the name Ugly Duckling, but rebranded as DriveTime in 2002.
Mr. Ernest Garcia II bought the business in 1991. It used to be an automobile rental service, but it pivoted to a business strategy similar to CarMax and has since become a competitor.
DriveTime, like CarMax, is a nationwide auto retailer and financier. DriveTime, which has around 145 facilities across the country, specializes on selling used cars to customers. Customers can get financing for vehicles at in-house dealership rates using the dealership’s unique credit scoring methodology.
DriveTime gets their cars from a number of different auctions. The next step is a comprehensive fourteen-day inspection of every car. When a car is ready for sale, it is delivered to a DriveTime partner dealership.
A slew of new businesses have sprung from the DriveTime community. Carvana’s success has generated similar companies such as Bridgecrest Acceptance Corporation, Go Financial, and SilverRock Group. These businesses are independent but cooperate. Together, they are one of CarMax’s most formidable rivals for the business of automobile buyers.
11. Enterprise Car Sales
Enterprise Car Sales, originally established by Jack Taylor in 1962 as Enterprise Rent-A-Car, has subsequently become a leading pre-owned vehicle dealer in the United States.
This subsidiary of Enterprise Holdings has over 120 sites and offers over 250 unique makes and models of pre-owned automobiles.
12. Inchcape (Companies Similar To Carmax)
Inchcape, another multi-brand buyer distribution business, is in direct competition with CarMax. This company was founded in 1847 and is headquartered in London.
Inchcape is notable because it provides international customers with the same services as CarMax does in the United States.
13. KAR Auction Services, Inc.
Kar Global is the parent company of KAR Auction Services, Inc. Since its inception in 1989, the company has called Carmel, Indiana home.
As an auctioneer of automobiles, it currently caters to customers in North America, Europe, and the United Kingdom.
While KAR is known primarily as an auction house, Kar Global has also made significant strides in the fields of marketing and remarketing. Many different types of financial institutions, leasing businesses, and retail outlets collaborate on product development.
This implies that potential purchasers don’t always have to “bid” against other potential buyers in the same way that they would at an auction.
The e-commerce site also provides access to resources that claim to carry the exact automobile the shopper is seeking for, at a price that is within their means.
14. Lithia Motors, Inc. (Companies Similar To Carmax)
The business that bears the name “Lithia Motors, Inc.” is a dealership. The company is headquartered in Medford, Oregon.
Since its founding in 1946 by Walt DeBoer, it has expanded to 180 stores throughout 18 states, making it the third largest automobile reseller in the United States.
Lithia Motors, like CarMax, provides an online marketplace wherever clients can research, purchase, sell, and exchange automobiles.
In addition, it provides potential customers with a number of different finance plans to choose from during the vehicle buying process.
15. Manheim
Cox Enterprises has a wholly owned subsidiary called Manheim. As a leading provider of connectivity to the largest automobile exchange network in the United States, it ranks among the best remarketing firms in the country.
More than 115 of Manheim’s brick-and-mortar and online facilities serve auto dealers, mobile auctions, and other specialized businesses.
16. Penske Automotive Group, Inc. (Companies Similar To Carmax)
Penske Automotive Group, Inc. has been operating as a global transportation services provider since 1990.
You can get some of the best deals on cars and trucks at this store. Thanks to its extensive international operations, Penske is now among the largest retail companies in the Americas.
According to Fortune Magazine, Penske is one of the most admired companies in the world, and it is included in the Fortune 500, the Russell 1000, and the Russell 3000.
Penske has earned a superb reputation among its roster of clients and workers.
17. Shift Technologies
Shift Technologies is an online marketplace for buying and selling pre-owned automobiles. HQ duties are handled out of sunny San Francisco. Customers in California, Oregon, Texas, and Washington can reach this business right now.
It was established in 2013 by George Arison and a few other investors, and in 2014 it was formally incorporated. In 2015, it opened its first market in San Francisco, where it initially worked as a middleman that facilitated the consignment sale and purchase of previously used automobiles.
The company’s former peer-to-peer consignment model was discontinued once Shift Technologies began buying cars outright and reselling them on its own platform directly to the buyers.
It merged with Insurance Acquisition Corp. in 2020. Since then, rumors have circulated about a possible merger between Shift Technologies and CarLotz, a consignment service for previously owned vehicles.
Shift Technologies operates similarly to CarMax in terms of their business model. It provides a marketplace where users may purchase and sell motor vehicles online.
There is a seven-day return policy and a thirty-day guarantee on the powertrain with every transaction.
18. Sonic Automotive (Companies Similar To Carmax)
The Charlotte, North Carolina-based auto dealer Sonic Automotive has been serving local and national customers since 1997.
Presently, there are over a hundred of them around the world. Although Sonic is significantly less large than CarMax, it provides the similar platform for businesses.
Consistent with its history, Sonic’s expansion shows no signs of slowing down. There are a lot of people who prefer the friendly atmosphere at Sonic to the impersonal service at CarMax.
19. TrueCar
Many car lots use TrueCar.com as a lead generation and client acquisition tool because of its web presence. Inquiring customers have also used it as a resource for learning more about available autos. It also tells them where they can find the vehicles they’re looking for.
TrueCar, headquartered in Santa Monica, California, acts as a go-between for buyers and sellers using a business model not dissimilar to that of CarMax.
20. Vroom (Companies Similar To Carmax)
Vroom, headquartered in New York City, sells used automobiles to customers via their website. It serves as a buyer, seller, and financier to customers all throughout the country through its online platform.
Vroom was created in 2013 as AutoAmerica by Kevin Westfall and Marshall Chesrown, but changed its name the following year to reflect the involvement of Ellie Wurtman and Allon Bloch. A technical platform and a refurbishment center in Stafford, Texas were introduced as part of these alterations.
Vroom was named by Forbes as one of the most promising new online retailers in 2015. Vroom also bought Texas Direct Auto in the same year. Texas Direct Auto, however, continues to function independently as its own brand.
In contrast to traditional marketplaces, Vroom’s e-commerce platform handles the entire transaction for its users.
The money-back guarantee period lasts for seven days, and the warranty covers all parts and labor for ninety days. Vroom’s concept of buying, selling, and financing clients that use their retail platform is comparable to that of CarMax.
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