Originally Posted by pizzaguy
My experience is that CarMax offers auction value, where most dealers offer trade-in value, which is considerably less.
Sell it privately or take it to CarMax.
FYI - these are the same things. Auction value (aka MMR) is usually way less than NADA trade or CBB. Most dealers buy the vehicles at the auction for about RBB (rough black book) knowing that the banks will base the finance advance on CBB (clean black book). The difference minus recon fees minus sales tax on the veh when sold is their profit. That money is obviously eaten up with advertising costs, floor plan, sales commissions, rent, etc.
All of these are the reason that a lot of the time it is better for you to sell private party, but there can be issues with that as well. I know of several people who sold cars private party and were paid for them, but the buyer had an at fault accident before transferring the title & the old owner was on the hook for liability. After all the seller was still the registered owner. Plus when you sell private party you don't get trade tax credit, but that isn't available in every state.
As far as not taking into consideration recon costs that the dealer will have to spend - that is a little naive. Most dealers are required by law & their insurance company to do a safety check on the vehicles they sell. The average recon cost is about $700 per veh at an average franchise dealership. Would you want to buy a car at a franchise dealership that didn't have the oil changed, didn't have the brakes checked and had the previous owner's fruit loops in the seat??? Of course not. All those things cost money. Detail guys have to get paid, mechanics have to get paid.
Carmax is a unique situation because they own their subprime company. There isn't a bank to reel in the overadvances so they can overcharge for their vehicles in subprime and they play the percentages in prime. That fact does allow them to offer a little more money for the street purchase vehicles that they buy. How much they pay for a certain vehicle also depends on their need for the vehicle. Obviously if they have 100 Dodge Caravans in the area they aren't really needing another one so the money won't be quite as strong. If they have been selling a lot of sports cars, they might give you top dollar for your XF.
Maybe the "why's" will help you decide what direction you would like to go.