The company began as a side business of Circuit City, opening its first location in September 1993 in Richmond, Virginia.

[3] While CarMax stores focus on marketing used vehicles, the company acquired its first new car franchise with Chrysler Corporation in 1996.

[7] The concept was first proposed by Ronald L. Moore of Richmond, Virginia, a consultant hired by Circuit City to evaluate possible business opportunities beyond the scope of their consumer electronics locations.

The company executed the campaign and additional TV advertisements throughout several years in support of the launch and the initial wave of stores.

With a significant shift in customer shopping habits, more online-only companies have worked to capture Carmax's share in the used vehicle market.

These offerings directly compete with other home delivery-based options such as Carvana, CarGurus, Vroom, Shift Technologies, and others.