The CarMax buying model

Jordan Walters
I spent a couple of years with CarMax and their concepts were incredibly solid. A lot has changed since that time, but my question for the board is this, Now that some dealers are trying to adopt a "We Buy Any Car Even If You Don't Buy Ours" what are the pitfalls to this? Do you think these groups will succeed, do you think they will fail? Curious to know everyone's thoughts. I've always felt maximizing purchase power was the way to go and to be as fair and transparent about the appraisal as I could. Thank you.
Ron Henson
@ Jordan, I don't know of any dealer that won't buy a car from an individual regardless of whether or not they buy a car. This isn't a new concept, it has existed for years and years. There really aren't any pitfalls because you are setting the purchase price, you are doing the appraisal, you aren't paying auction and transport fees, and you get to interview the prior owner. You can even have your technicians inspect it before making an offer!
Jordan Walters
@ Ron, will those dealerships pay full market value though? I would tell you that 9 times out of 10 that they won't, based off what I've seen. Will the buyers get graded on overall performance? Is that process being moved out of a UCM's or GSM's hands and into a group of people who do nothing but appraise and aren't paid on the retail deal associated?
Clint Jones
Jordan- We pay up for the vehicles we buy off the street. We will pay MORE for the same car from an individual than we will at auction. Ron has the reasoning on his post. I guess I don't know why a dealer would have anyone other than the UCM put a number on a car. I guess I don't understand your line of questioning on that.
Jordan Walters
Reason I ask the question was that I've seen some stores and groups have people that do nothing but appraise the car, similar to CarMax. The number is the number. I've had some experiences lately where I was shopping for cars and the appraisal was contingent on a purchase and the fluctuation was about $2K. I appreciate the response.

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