What Financing Does CarMax Use? All You Need to Know!

CarMax is a leading brand of used car trading. You can sell, buy, and finance a used car at this place.

It has dealer locations in most states across the US and with around 45,000 used cars available in its inventory.

Let us discuss what CarMax offers and how its financing program works.

What Does CarMax Offer?

CarMax is the largest retailer of used cars in the US. You can buy, sell, and finance used cars at this place.

It has around 220+ dealer locations in 41 states with more than 25,000 employees to assist you. The company claims to have sold more than 9 million cars so far and a similar number of purchased cars too.

The company has a wide range of used cars that come with different pricing tags, brands, and mileage to suit your needs.


CarMax offers only used cars to its customers. However, it has a large collection of cars with different models that come with very low mileage readings.

Although CarMax has a collection of used cars only, they do not negotiate prices. However, you can find the nearest dealer to visit and explore different cars with the same features but at a lower price tag.


Another feature you can use at CarMax is to sell your used car. You can schedule a car inspection by contacting them and getting a quote within a few minutes.

Even if your car is on a finance term, you can sell it on CarMax. You’ll get 7 days to accept the offer and compare it with other options.

Sellers can choose the trade-in option as well. In that case, the outcome of the trade-in will depend on the price difference between the car you want to sell and buy.


CarMax also arranges car auctions. It is a good way of buying a used car at discounted prices. You can explore a car auction and find a suitable car within your budget.

Financing Used Cars

CarMax has this flagship program to offer used car financing. Although it does not disclose the exact credit score requirement, you can get a financing deal with any credit score.

The annual percentage rate (APR) of your financing will depend on the down payment, credit score, and monthly income.

What Financing Does CarMax Use?

You have three financing options when buying a used car at CarMax. You can use one of these financing options or pay the full amount to purchase your desired car.

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CarMax Auto Financing

CarMax offers auto financing through its financing program. It evaluates your credit profile and decides the financing terms.

Your APR will largely depend on your credit score and credit history. Also, you must have a consistent income stream to support your monthly installment plan.

Once your application is reviewed, you’ll get the finance term offer from CarMax with details on the down payment, APR, monthly installments, and loan term.

Third-Party Lenders

CarMax also offers financing through its partner lenders. In this method, your application will be reviewed by a third-party lender.

Some leading lenders at CarMax include:

  • Ally Auto Financing
  • American Credit
  • Capital One Auto Financing
  • Chase
  • Exeter
  • Wells Fargo Auto

Your financing term, APR, and other conditions will be decided by the lender. CarMax will facilitate the process for you.

Direct Purchases

You can also use the direct purchase option at CarMax. It means either you can buy a car by paying in cash or bring your lender financing.

If your lender is not on the list, you can apply for car financing and bring the agreement to CarMax.

How Does Financing Work at CarMax?

Your auto financing process at CarMax can be completed within a few minutes if you have the required documents ready with you.

We can break down the financing process into these small steps.

Application Process

You can apply for auto financing online, in person, or using both methods. You’ll need to provide personal information, driver’s license, social security number, and employment information.

Once you have this information ready, you can fulfill the application and get an initial assessment within minutes.

CarMax does not impose a loan originating fee. So, you can apply for a car loan for free here.


CarMax offers preapprovals to loan applicants. It means you can avoid a hard inquiry on your credit history.

The prequalification process only incurs a soft credit check and does not cost you credit points.

Also, you can compare your APR and other loan terms after the prequalification process with other lenders to make the right decision before signing the contract.

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Once CarMax evaluates your application, it will offer you a loan term. You can compare these terms during the prequalification process.

After signing the agreement, you may get approved for the car loan immediately. However, the process may incur a hard credit check.

There is no official word from CarMax about the minimum credit score or income requirements. However, both of these factors along with your down payment amount will affect the loan terms.

Important Loan Details

Here are a few important loan details you should know:

  • The maximum age of used cars at CarMax is 11 years.
  • The loan amount is in the range of $500 – $ 100,000.
  • The loan term will vary from 24- to 72 months.
  • CarMax allows c0-buyers but not co-signers for a loan.
  • There is no penalty for loan prepayments.
  • You can pay online, through Western Union, or by sending a paper check.

Car delivery Options

Once your loan application is approved, you can visit your selected dealer location to pick up your purchased car.

The home delivery option is available in selective states and dealer locations.

Qualification Requirements

Exact qualification details for auto financing at CarMax are not disclosed officially. There is no listed credit score, credit history, or minimum income requirement by CarMax.

However, as with any other loan, you can expect a better loan deal if you have a higher credit score and better debt-to-income ratio.

Pros and Cons of CarMax Financing

Auto financing through CarMax comes with several benefits and some limitations for the borrowers.

Pros Explained

CarMax offers prequalification to borrowers. It saves time and credit score penalties for the borrowers by comparing different options for free.

You get a three-day window to accept the loan offer even after approval. It again gives you more power to make the right decision.

There are several financing programs offered by CarMax and its third-party lenders, and you can bring your own financing plan as well.

Another advantage is to manage the whole process online. From loan application to car delivery, you can complete the process online.

Cons Explained

CarMax does not disclose its minimum credit score and income requirements online. Also, some other details about its historic APRs are not available.

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In many cases, borrowers may have to visit a dealer location to finalize the deal. Also, third-party financing may be harder than expected.

CarMax auto financing option is only for cars purchased through them. They do not allow a loan co-signed which can be a great disadvantage to borrowers with a bad credit score.

Finally, you can finance only used cars and this option is not available for financing new cars.

Frequently Asked Questions about CarMax Financing

Let us answer a few FAQs on CarMax financing program.

What is the cost of financing at CarMax?

The exact cost of financing will depend on several factors including your monthly income, down payment, debt-to-income ratio, loan term, and your credit score.

There is no listed information about APRs currently.

What is the minimum credit score requirement?

You can get approved for car financing at CarMax with any credit score. However, the credit score plays a huge role in deciding the interest rate for your loan.

Can I use a Co-buyer?

Yes, a co-buyer is allowed at CarMax. However, please note that you cannot use a co-signer for a loan application.

Does Applying for financing at CarMax affect my credit score?

Yes. Applying for financing at CarMax incurs a hard check on your credit report. It means your credit score may reduce by 3-5 points with every application.

Even when you apply for a third-party lender, it will cost you a few credit score points.

Can I use a third-party lender when buying a car at CarMax?

Yes, CarMax has a few third-party auto financing partners. You can also bring your own approved auto financing plan if your preferred lender is not on the list.

What is the three-day payoff program at CarMax?

This option lets you accept and sign the approved loan term within three days. If you get a better deal from another lender with the same details and at the same time, you can replace the deal at no extra cost.

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