Carmax MaxCare warranty?

Question

I’m so confused. How does it work? How is it worth it?

In: Other

Answer 1

Not specific to Carmax, but here is a basic overview of how warranty sales work. Numbers are estimated. 

Customers buy a car for say $30,000. They sell a warranty for say $5,000. Carmax likely pays out $0 in claims  for approx. 90% of warranties sold.