CarMax is the United States’ largest used-car retailer and a Fortune 500 company. The first CarMax location opened in September 1993. As of January 2014, the company had 128 locations. Prior to the first store being built, DeVito/Verdi was hired as the advertising agency and creative resource. The company executed the campaign and additional TV advertisements over the course of a number of years in support of the launch and the initial wave of stores.
The concept for CarMax was developed by Circuit City executives under then-CEO Richard L. Sharp. It was developed for nearly a year in 1991, using the code name “Project X”, and was also known as “Honest Rick’s Used Cars” to those intimately involved in the skunk works team. The concept was actually first proposed by a consultant hired by Circuit City to evaluate possible business opportunities beyond the scope of their consumer electronics locations. While used cars have always been the main business, CarMax purchased the rights to locations from car manufacturers such as Chrysler, Jeep, Mitsubishi, and Toyota. CarMax also purchased an auto row in Kenosha, Wisconsin that had additional manufacturer franchises, such as Ford, BMW, and Volvo. The first CarMax location opened in September 1993, 1.7 miles (2.7 km) from Circuit City’s corporate offices in Richmond, Virginia. As of February 26, 2009, CarMax operated 100 used car superstores and seven new car franchises, all of which are integrated or co-located with its used car superstores.
The business model began with no fees, however the model was subsequently abandoned for the current business model after it was determined that customers were not concerned about paying transaction fees for the purchase of a vehicle. A typical CarMax store is approximately 59,000 square feet (5,500 m2), carries an inventory of 300–400 vehicles, and turns its inventory over eight to ten times a year. On average, a CarMax location employs 40 sales associates.
On average, a purchased vehicle has 12 hours of work done to it before being put up for sale. Each car goes through a thorough 125-point inspection process, beyond any state-required inspections, and includes a 30-day warranty and a five-day money back guarantee. Circuit City issued the first CarMax stock in February 1997, when CarMax had seven locations. Initially, the stock was a tracking stock still under the umbrella of the Circuit City. CarMax officially split from Circuit City as of October 1, 2002, when it was spun off as a stock dividend for Circuit City shareholders, with shares also issued to those holding CarMax tracking stock. During the 12-month period ending February 28, 2009, the company sold 345,465 used cars. CarMax trails Fort Lauderdale, Florida-based competitor AutoNation Inc. in total car retail sales, but CarMax holds a larger used-car operation.
According to the CarMax fiscal year 2009 report released on April 2, 2009, the company opened 11 used car superstores, including superstores in 5 new markets. The CarMax Foundation (the “Foundation”) encourages CarMax Associates to support nonprofit organizations and to become personally involved in the communities where they live and work. The Foundation supports this involvement by offering easy gifting methods and cash matches to community organizations to which Associates voluntarily make personal cash contributions and/or donate volunteer time.
The Foundation offers the Easy Gift Program, through which CarMax Associates may donate to their favorite charities via an automatic deduction from their paychecks, and the Matching Gifts Program, which matches Associate contributions of money or time. The Easy Gift and Matching Gifts Programs are services offered by The Foundation, and The Foundation may terminate either or both of the programs at any time.
General Eligibility Guidelines for Easy Gift and Matching Gifts Programs–All Associates are eligible to participate in the Easy Gift Program and the Matching Gifts Program after 30 days of employment with CarMax. Contributions under the Easy Gift Program and the Matching Gifts Program must be made to eligible organizations that are public charities located within the United States and recognized by the IRS under Section 501(c)(3) of the U.S. Internal Revenue Code (“Eligible Organizations”). Examples of Eligible Organizations include, but are not limited to, colleges and universities, civic organizations, arts and culture organizations, health and human service agencies, and environmental organizations.
The following organizations are NOT eligible: religious organizations, unless the activities sponsored are non-sectarian, such as soup kitchens and shelters; private foundations, donor advised funds, community foundations, charitable gift funds, United Way, or family funds; service clubs, social groups, fraternal and labor organizations, political organizations and lobbying groups, and business and industry associations; and government agencies.
For the Easy Gift program, donations will not be deducted from an Associate’s paycheck until the nonprofit organization they have selected has been verified as meeting our guidelines.
The following gifts are NOT eligible: Contributions that result in you or a family member receiving a benefit (e.g. auction items, dinners, raffles, sporting event tickets, sponsorships, golf tournaments, booster clubs, memberships, etc.); pledges, tuition, or tithes to houses of worship (e.g. churches, synagogues, etc.); contributions to religious programs or organizations whose principal purpose is propagating a particular religious faith, creed, or doctrine (e.g. missions, religious orders); dues and subscription fees; grouped and pooled donations (including contributions made by groups of Associates or other persons and claimed as one gift from a single eligible donor); deferred gifts (annuities, charitable remainder trusts, etc.), bequests, and insurance premiums that name the organization as a beneficiary; tuition fees, loan repayments, and payments in lieu of tuition; travel or other gifts in kind.
The minimum to be deducted per paycheck to an organization is $5.00. The deduction is taken on a post-tax basis. A list of suggested Eligible Organizations is available to choose from. However, Associates can donate to any Eligible Organization through the Easy Gift Program. Easy Gift Program donations are deducted from each paycheck and then distributed to the designated Eligible Organization on a quarterly basis. Easy Gift Program donations are automatically matched quarterly through the Matching Gifts Program unless the Associate elects not to do so. Easy Gift donations AND their accompanying Matching Gifts will not be distributed until both have met the $25 Matching Gifts minimum. Easy Gift Program donations will be deducted from the Associate’s paycheck each pay period until the Associate elects to terminate participation through the East Gift Program website, goes on leave or terminates employment with CarMax. Deductions can be terminated at any time, but the termination might not be effective until the next pay cycle. Associates will be asked to confirm their elections annually. If the Associate does not respond, deductions will continue until the Associate terminates his or her participation in the Easy Gift Program.
The Foundation will match contributions by Associates and their eligible dependents of money or time to Eligible Organizations, up to a per-Associate maximum of $10,000 per calendar year, in any combination of money or time at CarMax Nonprofit Service. Eligible dependent is defined as: Spouse / domestic partner, Children under age 26 and be one of the following– Your biological child, Your adopted child (or a child placed for adoption), Your stepchild, Your foster child, Any other child for whom you have legal guardianship or who, by court order, are dependents for purposes of providing health care coverage and who are the tax dependent of the Associate for federal income tax purposes, The biological or adopted child(ren) of your Domestic Partner, provided you enroll your Domestic Partner for coverage and the child(ren) are the tax dependent of the Associate for federal income tax purposes, To enter a match for an eligible dependent, please use the Associate’s log in information and enter the dependent’s name and relationship to the Associate in the “Purpose” field., The minimum cash gift amount per match request is $25, The minimum number of volunteer hours is 10 hours per Eligible Organization per Associate / dependent before submitting a match request (resulting in a $100 minimum match), Maximums are calculated on a calendar year basis – contributions made in a calendar year will apply toward the matching gift maximum for that same year, Match requests must be submitted and received within twelve months of the date of the financial contribution or volunteer time, Separate requests for each financial donation are required, Separate requests for each Eligible Organization with which you volunteer are required, but you can bundle volunteer hours for the calendar year or you can submit a match request more frequently (if you have a minimum of 10 hours), Financial contributions must be a personal, tax-deductible donation that has been paid and not simply pledged,
Process for Easy Gift Program is as– Determine how much you want to contribute. Minimum donation is $5.00 per paycheck, Enter your User ID (Employee ID) and password (Employee ID), Follow the instructions on the web site, Select the Eligible Organization you will be donating to from the list by clicking on the “Submit” next to the name, The Eligible Organization you select will now appear in the “organization” field, If the Eligible Organization you want to donate to is not on the list, you will be asked to enter information regarding the organization such as name, address and tax identification number, Enter the amount you are giving to the Eligible Organization per paycheck, Indicate the amount you want The Foundation to match, Acknowledgment Option: you can choose to have your name included with your donation or remain anonymous, Click the “Submit” button to enter your request, Your donation will be displayed at the top of the page, Confirm your request by selecting “Confirm,” Follow these steps for each organization you would like to support through the Easy Gift Program.
