Yes, it’s AI — everyone’s favorite buzzword.

But when it comes down to it, artificial intelligence is only part of what CarMax’s new ChatGPT app is all about.

The company billed as the nation’s largest used-car retailer touted the app, which allows car shoppers to search for vehicles using natural language and car owners to receive vehicle value information within the popular ChatGPT AI platform, as a groundbreaking moment. After all, the app is a first for an American auto retailer.

But, CarMax chief innovation and people officer Diane Cafritz said, it’s about more than just the AI.

It’s also about the customer.

“What makes this moment significant isn’t a single app,” she said. “Rather, it’s the broader evolution in how customers are beginning their research for high consideration purchases. We are seeing more customers turning to conversational AI to explore their options, ask questions and narrow down their choices before they ever visit a website or store. That changes where the car-shopping journey begins.

“We see this as an opportunity to bring in CarMax’s nationwide inventory, upfront pricing and clear guidance to support the customer in those early moments, helping customers move from exploration to more confident decision-making.”

The ChatGPT app also represents the latest step in CarMax’s own AI evolution.

The company is far from a newcomer in the technology — it introduced its AI virtual chat assistant, Skye, in 2020 to help car shoppers find vehicle details, navigate financing options and schedule appointments. The motivation, Cafritz said, is to find new ways to make the buying and selling process easier and more convenient for customers.

“Our decision to create a CarMax app builds on years of work using AI across the business, including Skye, and a focus on delivering clearer support to customers as they shop and sell,” she explained. “We’ve applied AI thoughtfully to help customers get support earlier in the journey, while keeping associates focused on the moments where human interaction adds the most value.”

While CarMax’s app is the only one from a U.S. vehicle retailer, there are other car-shopping tools on ChatGPT from third-party marketplaces Autotrader, Carfax and CarGurus.

But the fact CarMax is an actual car seller, rather than a third party connecting shoppers with dealers, is a significant difference, Cafritz said.

“While other AI based car search tools currently on ChatGPT are built around listings,” she said, “CarMax brings a different level of engagement as a retailer. We own the inventory, stand behind the offers and support customers across the full journey.”

Not to mention it’s also looking to buy cars, which is just as important a consideration to CarMax as the sales end. For one, it’s another source of quality used inventory. And, as Cafritz reminded, “we don’t view buying and selling as competing priorities. Many CarMax customers who are in the market to sell a vehicle are also actively considering their next purchase, and vice versa.”

Because of that, the app is designed to support both the buying and selling experience by making it easier to explore inventory and understand a trade-in vehicle’s potential value early in the process, which, Cafritz said, “helps customers move forward with confidence.”

Customers looking to sell their vehicles to CarMax won’t get offers from the ChatGPT app, but they will find insights to help explain the vehicle’s value. It allows them to start the process conversationally, then connects them to the appraisal tools on the CarMax website, where they can generate a real offer.

As advanced as AI is currently, it’s really still only in its infancy, and there remain concerns about its accuracy and reliability in some instances.

Cafritz said CarMax addresses those risks with an internal AI Center of Excellence that governs the company’s AI use to “ensure responsible and ethical use,” as well as legal compliance.

“All of our AI use cases are guided by our foundational values of honesty, integrity and transparency,” she said. “As conversational AI becomes a more common way for people to research complex purchases, access to accurate, trusted information matters more than ever. We are building our tools carefully with responsible practices and human oversight so customers benefit from guidance grounded in verified information.”

What CarMax is focused on is the seemingly limitless opportunities AI promises.

In 2023, then-CEO Bill Nash said CarMax is “bullish on AI in general,” noting, “There are lots of opportunities to enhance our work.” That philosophy seems likely to remain intact under new CEO Keith Barr, who took the reins March 16.

Cafritz said CarMax is going full speed ahead on AI in various applications.

“We’re using AI to better support what customers want to do online,” she said, “like understanding their budget, exploring options and feeling more confident as they move forward. Early tests show when customers receive guidance that’s more relevant to their needs, they’re more likely to take the next step. Those capabilities also support the tools our associates use, helping create more helpful experiences for customers.

“We’re also testing AI in other places that enable associates to focus more time on interactions where human connection matters most.”

In addition, she noted, pushing forward with AI is no longer optional — it’s become a must simply to keep pace with the rest of the auto industry.

“We expect AI to expand across the auto retail industry as a way to personalize discovery,” Cafritz said. “We’re seeing growing interest in conversational AI for early research, while also recognizing that trust matters more than ever for a high consideration decision.

“We would expect more auto retailers to experiment as AI becomes a more common starting point for research. Where CarMax stands apart is how we combine AI with human expertise and in-store support. We believe differentiation will come from how helpful and trusted these experiences are, making a complex purchase easier to navigate with confidence.”