Another used-car superstore chain has arrived in South Florida.
The newest rival, CarMax Group, will open its Boynton Beach store on Monday. It is the 13th that the Richmond, Va.-based chain has built across the country and the first of three planned for South Florida.
The giant electronics retailer Circuit City, which owns a 77.5 percent stake in CarMax, started the used-car superstore chain four years ago. That connection is one the auto chain will try to wave as much as possible.
“South Florida is one of the Top 10 markets. You can sell cars there year-round, and it’s growing,” CarMax President W. Austin Ligon said. “And it’s a market where Circuit City has had phenomenal success, and that familiarity builds a lot of confidence in us in comparison with the other automotive options.”
Its used-car rivals include Republic Industries’ AutoNation USA chain, franchised car dealerships and independent used-car stores.
Come Thanksgiving, a third superstore, Driver’s Mart, will open in Broward County.
A competitor says the presence of CarMax will not change its operations.
“Look, they do more or less the same things we do,” said Eddie Perez, used car manager at Plantation Auto Plaza. “But I feel that we are superior for a lot of reasons, including the expertise in the cars and products that our staff has.”
Because they have been in the area for 30 years, Perez said the auto plaza has an established client and employee base.
He said his sales staff has taken certification courses taught by the manufacturers so that they are more knowledgeable with each make and model’s features, including safety-related equipment.
Ligon said CarMax will stand out among competitors by stocking many more cars, a wider selection than the average used car center at an auto dealership.
And because most of its cars are purchased from consumers, Ligon said CarMax stores carry the market’s most popular cars.
The chain’s no-haggle approach, Ligon said, gives buying a car the same simplicity that consumers have found in buying stereos and appliances at Circuit City.
One industry analyst says that, for the moment, superstores may help traditional dealers more than they threaten them. “What they are doing right now is churning the market,” said Dennis Fisher, editor of Car Dealer Insider. “People are thinking more about used cars, and they are shopping around more. If they don’t find what they want at one place, they’ll go to another.”
Jack Rubinger, marketing director at Chrome Data, an Oregon firm that does price surveys for dealers, said many of the features that superstores offer are not new or are being emulated by dealers now.
“It’s not that new of a concept,” he said. “It’s just that [the superstores) are packaging it better.”
Others say the used-car superstores still have challenges to overcome _ especially on prices and profits.
Independent studies by groups such as Consumers Union point out that, on average, the superstores charge more than traditional dealers.
Some dealers, such as the Ed Morse auto group, have used comparative advertisements in newspapers to point this out to consumers.
CarMax’s Ligon said that is simplifying the issue. He said CarMax is cheaper because it does not “tack on the bogus fees and charges [over the sticker price) that dealerships do.”
AutoNation did not comment for this story. But in the past, Republic co-CEO Steven R. Berrard has said the chain remains in a developmental stage and is doing a lot of experimenting.
Those areas, he said, include spending more to stock cars that are in better condition and refurbishing vehicles to “raise the bar on what consumers should expect” in a used car.
