You'd be surprised how much "old boy network" stuff is involved in used cars. Calculating taxes is a giant pain (and no one except CarMax has even solved this problem as far as I can tell). Some states have extremely draconian laws, especially those relating to the environment (which are arguably in the public's interest) and those relating to state inspection (which are arguably just a glorified protection racket). Not to mention, having a full lot with reliable used cars is quite capital intensive. And a used car company needs pretty solid knowledge about which cars to actually turn around and which to dump, so they don't actually sell a lemon to retail consumers.
Depends on the state. In Georgia, you can go to the Department of Revenue's site, punch in a VIN or year/model of a car, and get the exact ad valorem that would be due when buying a car. It makes it pretty trivial to figure out what your ballpark out the door price should be before you even start negotiating and avoids letting the the dealership make negotiations revolve around monthly payments.
I have my issues with how Georgia does AVT -- it's paid on any car when first registered in the state, including a car you already own when moving in -- but it's kind of ridiculous that at least being able to easily know what the state is going to charge you isn't standard across the board.
Yes, of course it depends on the state. CarMax operates in 41 states.[1] Given that some customers are known to cross state lines in order to purchase vehicles, CarMax likely calculates taxes for every state except Alaska and Hawaii. In some states, the tax rules are arcane enough that they depend on the municipality as well.
In certain states, the number of permits to perform state inspections is capped. New entrants who want to perform inspections (which a used car dealer will typically need to do) have to either wait in line indefinitely or buy up an existing permit-holder.
State inspections may improve vehicle safety at the margin. However, when state inspection permits are treated like taxi cab medallions, the cost-benefit comparison becomes a bit skewed.
The usual argument is that it's just a waste with no safety benefit. Some states that previously required annual inspections have eliminated them, and traffic deaths per mile driven haven't increased.
