Seven years ago, I conducted an experiment to see whether shoppers were really saving money by purchasing used vehicles from no-haggle retailers such as CarMax and Carvana. What I found in 2019 was startling. One Carvana 2018 Ford F-150 XLT was priced at $49,400, while a comparable factory-certified truck at a traditional new-car dealership was advertised for $36,000. I also found Nissan Rogues at traditional dealerships that were newer and less expensive than comparable vehicles at Carvana and CarMax.
As I wrote then, it is not difficult to create a pleasant transaction when the customer simply agrees to pay the seller's stated price. Paying sticker is quicker and when you pay the asking price, there is nothing to argue about. The important question is what that convenience costs. Seven years is a long time in the automobile business, so I decided to repeat the exercise using current inventory.
CarMax and Carvana have built much of their appeal around convenience and fixed pricing. Some people genuinely dislike negotiating for a vehicle and will gladly pay something to avoid it. There is nothing wrong with that, provided they understand what the convenience may be costing them. That is why I did all this research.
CarMax describes its pricing as no-haggle, and Carvana states that it does not negotiate vehicle prices. In other words, the price is set. You can ask nicely, smile broadly or bring homemade cookies, but the number on the vehicle is not changing.
At a traditional dealership, the advertised used-car price is generally an asking price. It may not always be negotiable because some vehicles are already priced as aggressively as the dealer can stand, but buyers can usually make an offer and attempt to improve the vehicle price, the trade allowance or the overall transaction. That distinction matters because every traditional-dealership price in the comparisons below is the full posted figure. I did not assume even one dollar of additional discount.
I searched current used inventories at Sam Pack's Five Star Ford, Classic Chevrolet, the Sewell dealerships and the Park Place dealerships. All four have been Car Pro Certified dealers for between 15 and 20 years. I then looked for comparable vehicles at CarMax and Carvana. I matched model year, trim, engine and drivetrain as closely as possible and considered mileage, equipment and manufacturer certification. Prices and inventory were checked on Aug. 2, 2026, and can change quickly.
The CarMax Escape had 660 fewer miles, but it was priced $2,998 higher. These were the same model year, trim, engine and drivetrain, with fewer than 700 miles separating them.
The Sam Pack Escape was also Ford Gold Certified. Ford says Gold Certified vehicles undergo a 172-point inspection and include a 12-month/12,000-mile comprehensive limited warranty plus seven-year/100,000-mile powertrain limited-warranty coverage measured from the vehicle's original warranty start date. The no-haggle CarMax price was nearly $3,000 higher before considering any possible shipping charge and before the customer attempted to negotiate with Five Star Ford.
I also found a Carvana 2024 Escape ST-Line with the same engine and front-wheel drive. It had 52,365 miles and was advertised for $20,990. That made the Carvana Escape $3,990 more expensive than the Ford Gold Certified vehicle at Sam Pack despite having 2,280 additional miles.
The CarMax Trax was $2,960 more expensive and had 5,664 additional miles. The CarMax vehicle did have a sunroof, which the Classic listing did not show, so the equipment was not identical. Both vehicles included desirable comfort and driver-assistance features. Even allowing value for the sunroof, a shopper would have to decide whether it justified paying nearly $3,000 more for a Trax with more than 5,600 additional miles.
Then I checked Carvana. It advertised a 2024 Trax LT with 35,455 miles for $20,590. At first glance, Carvana appeared to win because its price was $448 lower than Classic's final advertised figure. Now look at the mileage. The Carvana Trax had 25,622 more miles. For $448 more, the Classic buyer would get a comparable vehicle with fewer than 10,000 miles instead of more than 35,000 miles. The Trax at Classic would also have a lot of factory warranty left and the Carvana Trax would be out of warranty in roughly 550 miles.
The Carvana Trax included $1,390 in listed factory packages, which should be acknowledged. Carvana also displayed a shipping charge for the location selected by its website, but shipping varies by the buyer's location, so I excluded it from the comparison. Even without shipping, the traditional dealership offered 25,622 fewer miles for an additional $448, and its asking price still might have been negotiable.
This is about as close to an apples-to-apples comparison as used vehicles allow. Both were 2024 XT5 Premium Luxury models with front-wheel drive, the 3.6-liter V6 and the Technology Package.
The Cadillac at Sewell was $60 less and had roughly 6,000 fewer miles. It was also Cadillac Certified Pre-Owned. A $60 price difference alone is not dramatic, but that misses the larger point: Sewell's vehicle already cost slightly less, had substantially fewer miles and carried manufacturer-backed certification before the buyer ever made an offer. CarMax's price was set. At the traditional dealership, the listed price could still be the beginning of a conversation.
The Park Place Mercedes was $782 less and had 3,140 fewer miles. It was also Mercedes-Benz Certified Pre-Owned. The equipment was not identical down to every option, as is almost always the case with used vehicles, but the traditional dealership offered the same model year, model, engine and drivetrain for less money, with fewer miles and factory certification. Once again, that was before any possible negotiation.
In every comparison with CarMax, the traditional dealership's full advertised price was lower. In three of the four CarMax comparisons, the traditional dealership vehicle also had fewer miles, and three of the four traditional dealership vehicles were manufacturer-certified. None of these calculations assumes that the traditional dealership would reduce its price by even one dollar.
Price and mileage are not the only considerations. Three of the traditional dealership vehicles in this comparison were manufacturer-certified, and that certification can have substantial financial value. The typical cost to a dealership to certify a car, do all the things required to extend the warranty runs the dealership $1500 to $2500 or more in my experience.
A factory-certified pre-owned vehicle generally has passed an inspection process established by the automaker and comes with manufacturer-backed warranty coverage. For many buyers, that included protection can eliminate the immediate need to purchase an extended service contract, at least during the certified warranty period. The coverage is not identical to a blanket warranty on every component, and every program has exclusions and starting dates, but it is real value that should be included in the comparison.
Ford says its Gold Certified vehicles include a 12-month/12,000-mile comprehensive limited warranty and seven-year/100,000-mile powertrain limited-warranty coverage. Cadillac says its certified program carries forward any remaining portion of the original four-year/50,000-mile bumper-to-bumper warranty and then adds a one-year, unlimited-mile certified limited warranty. Mercedes-Benz says its certified vehicles receive the remainder of the original four-year/50,000-mile new-vehicle warranty followed by a one-year certified limited warranty with unlimited mileage.
CarMax and Carvana are not selling vehicles with no protection at all. CarMax says every vehicle includes a 30-day limited warranty, with longer periods in a few states, and it sells optional MaxCare coverage. Carvana includes a 100-day/4,189-mile limited warranty and offers optional vehicle-service-contract coverage. Those standard warranties have value, but they are brief compared with the longer manufacturer-backed coverage included with many CPO vehicles.
That creates the possibility of paying more than once. A shopper can pay a higher fixed price for the vehicle and then pay again for an extended service contract to obtain longer protection. By comparison, the buyer of a factory-certified vehicle may receive meaningful warranty coverage as part of the advertised price. Certification can therefore save the buyer once through a competitive purchase price and potentially save the buyer again by reducing or eliminating the need to buy additional coverage right away.
There is another reason shoppers should not assume that no-haggle pricing means low-profit pricing. CarMax and Carvana are publicly traded companies, which means their financial reports reveal the gross profit they generate per retail used vehicle.
The correct term is gross profit per retail unit, not net profit per car. Gross profit does not account for all corporate expenses, including salaries, advertising, facilities, technology, interest and taxes. Even with that important qualification, the comparison is revealing.
For the quarter ending May 31, 2026, CarMax reported retail used-vehicle gross profit of $2,177 per unit. It also reported an Extended Protection Plan margin of $580 per retail vehicle sold. That $580 is an average across all retail units, not the price or profit on every individual MaxCare plan, but it shows that optional protection products are a meaningful part of the business.
Carvana reported retail gross profit of $3,547 per retail unit in the second quarter of 2026. You may also see Carvana's much larger total gross-profit-per-unit figure of $7,014. It would be misleading to describe all $7,014 as vehicle markup. Carvana's total includes wholesale gross profit and what it classifies as other gross profit, including financing, vehicle-service contracts, GAP coverage, insurance and other products. Carvana reported other gross profit of $2,666 per retail unit for the quarter. It is fair to conclude that the big box operations sell their used vehicles at a higher profit per vehicle than franchised dealerships, by quite a margin.
For comparison, the Presidio-NCM Average Dealership Performance Benchmark found that more than 4,000 new car franchised dealerships averaged $1,409 in used-vehicle gross profit per vehicle retailed during the second quarter of 2026. That data set represents nearly one-quarter of the nation's franchised dealership outlets and provides a broad industry benchmark.
CarMax's reported retail used-vehicle gross profit was $924 higher than the franchised-dealership benchmark, or approximately 74% more. Carvana's reported retail vehicle gross profit was $2,294 higher, or approximately 183% more.
These are company and industry averages, not the profit earned on any particular vehicle. Accounting methods, inventory mix, transportation expenses and reconditioning practices can differ, so this is not a perfect apples-to-apples comparison. Nor does it mean the entire gross-profit figure is available for negotiation. A dealership still must pay commissions, salaries, advertising, utilities and all the other costs of operating the business.
The numbers do, however, destroy the assumption that a fixed price must carry a smaller markup. The two no-haggle retailers reported substantially more front-end used-vehicle gross profit per unit than the current franchised-dealership benchmark. No haggle does not mean no profit. Wall Street and stockholders would be terribly disappointed if it did.
The strongest argument for CarMax and Carvana is convenience. Their inventories are large, their websites are easy to use and their fixed-price systems remove the anxiety some people feel about negotiating. Convenience has value. The question is how much you are willing to pay for it.
There is a misconception that no-haggle pricing protects consumers from paying too much. It does not. It means the seller has predetermined the price and does not intend to change it. That price may be competitive and occasionally may be the best price in a particular comparison, but the words no haggle provide no independent evidence that it is below market like they want you to believe
Consumers can become so relieved that they do not have to negotiate that they stop comparison-shopping. That is exactly when convenience becomes costly. A traditional dealership may be able to reduce the advertised price, increase the trade allowance, improve the financing or find another way to make the overall transaction work. At CarMax and Carvana, the vehicle price is off the table from the beginning.
Remember that every traditional dealership price in this article was the full posted figure. The traditional dealerships were already competitive, and often substantially less expensive, before the customer made an offer. Then add the potential value of manufacturer-backed certification. A shopper could pay more for a fixed-price vehicle, accept more miles on the odometer and then pay again for additional warranty coverage.
Begin with the exact model year, model and trim level, but do not stop there. Compare the engine, drivetrain, mileage, factory packages, accident history, number of owners, tire condition, remaining original warranty and whether the vehicle is manufacturer-certified.
Ask every seller for a written out-the-door figure. Shipping charges, documentation fees, dealer-installed accessories and protection products can quickly erase what appeared to be a price advantage. Shipping is especially important with online retailers because the amount can vary dramatically depending on the vehicle's location and the buyer's ZIP code.
Finally, compare the warranty coverage line by line. Do not assume that every vehicle described as certified carries factory backing. A true manufacturer CPO vehicle is different from a retailer's internal inspection designation. Read the actual warranty, note when it begins, understand the deductible and exclusions, and decide whether additional coverage is truly necessary. Franchised dealers must perform and sign off on everything done on the checklist that is required for FACTORY certification. CarMax, Carvana, and other used car only dealerships cannot sell Factory Certified vehicles. I will note that Carvana has a handful of new car franchised dealerships which can sell factory certified, but they cannot at their “vending machines.”
Seven years after my first no-haggle pricing experiment, the conclusion has not changed. CarMax and Carvana provide a convenient way to shop for a used vehicle, and I am not suggesting that no one should ever purchase from either company. I am saying that no-haggle pricing should never be mistaken for bargain pricing.
The current listings show that traditional dealerships can offer comparable vehicles for less money, with fewer miles and, in some cases, valuable manufacturer-backed certified warranty coverage. The financial reports show that CarMax and Carvana generate considerably more retail vehicle gross profit per unit than the current franchised-dealership benchmark.
Before accepting a fixed price, find comparable vehicles at traditional franchised dealerships. Match the year, trim, engine, drivetrain, mileage, equipment, history and warranty coverage. Ask for a complete out-the-door figure, then make an offer.
At CarMax or Carvana, the number on the screen is where the price conversation ends. At a traditional dealership, it may be where the conversation begins.
Vehicle prices, mileage and availability were verified from online listings on Aug. 2, 2026. Listings can change or disappear at any time. Financial figures are from CarMax fiscal first-quarter 2027 results, Carvana second-quarter 2026 supplemental financial tables and the Q1 2026 Presidio-NCM Average Dealership Performance Benchmark. Warranty descriptions are based on the manufacturers’ published CPO program information.
Photo: ChatGPT Plus/CarPro.