<PAGE>

Exhibit 4.3 - Form of Insurance Policy

                                [NAME OF INSURER]

                       FINANCIAL GUARANTY INSURANCE POLICY

                               [__________], 20[__]

                                                             Policy No. [______]

Re:            CarMax Auto Owner Trust 20[__]-[__], Class A-1, Class A-2, Class
               A-3 and Class A-4 Asset-Backed Notes (collectively, the "Notes")
               and Asset-Backed Certificates (the "Certificates" and together
               with the Notes, the "Securities");

Insured        Obligation of CarMax Auto Owner Trust 20[__]-[__] (the "Trust")
Obligation:    to pay  servicing fees and interest on and the principal of the
               Securities.

Beneficiary:   [____________________], as indenture trustee under the Agreement
               (as defined below) (together with any successor trustee duly
               appointed and qualified under the Agreement) (the "Indenture
               Trustee") on behalf of the Noteholders and the
               Certificateholders.

     [____________________] (the "Insurer"), for consideration received, hereby
unconditionally and irrevocably guarantees to the Beneficiary, subject only to
the terms of this Policy (the "Policy"), payment of the Insured Obligation. The
Insurer agrees to pay to the Beneficiary:

     (x) with respect to any Distribution Date, the sum of (i) Total Servicing
Fee for the preceding Collection Period, (ii) Total Note Interest for such
Distribution Date, and (iii) Total Certificate Interest for such Distribution
Date (in each case, after giving effect to any distributions of Available
Collections and any funds withdrawn from the Reserve Account to pay such amounts
with respect to such Distribution Date); and

     (y) with respect to any Distribution Date, the lesser of (i) the sum of (a)
Monthly Note Principal for such Distribution Date and (b) Monthly Certificate
Principal for such Distribution Date (in each case, after giving effect to any
distributions of Available Collections and any funds withdrawn from the Reserve
Account to pay such principal with respect to such Distribution Date) and (ii)
the Net Principal Policy Amount (after giving effect to any funds withdrawn from
the Reserve Account to pay principal to the Noteholders and the
Certificateholders with respect to such Distribution Date);

provided, however, that no payment under this Policy with respect to any
Distribution Date shall exceed the Policy Amount for such Distribution Date, and
provided further, that with respect to

<PAGE>

an Avoided Payment, the Policy Amount shall be calculated without regard to
clause (x)(A)(i) of the definition thereof. This Policy does not cover
shortfalls, if any, attributable to the liability of the Trust or the Indenture
Trustee for withholding taxes, if any (including interest and penalties in
respect of such liability).

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Indenture dated as of [__________], 20[__]
between the Trust and the Indenture Trustee (the "Agreement"). As used herein,
the term "Policy Amount" shall mean, with respect to any Distribution Date,

     (x) the sum of (A) the lesser of (i) the Note Balance on such Distribution
     Date plus the Certificate Balance on such Distribution Date (after giving
     effect to any distribution of Available Collections and any funds withdrawn
     from the Reserve Account to pay principal to the Noteholders or the
     Certificateholders with respect to such Distribution Date) and (ii) the Net
     Principal Policy Amount on such Distribution Date (after giving effect to
     any funds withdrawn from the Reserve Account to pay principal to the
     Noteholders or the Certificateholders with respect to such Distribution
     Date), plus (B) Total Note Interest for such Distribution Date, plus (C)
     Total Certificate Interest for such Distribution Date, plus (D) Total
     Servicing Fee for the preceding Collection Period; less

     (y) all amounts on deposit in and available for withdrawal from the Reserve
     Account on such Distribution Date after giving effect to any funds
     withdrawn from the Reserve Account to pay principal to the Noteholders or
     the Certificateholders with respect to such Distribution Date.

     As used herein, the term "Net Principal Policy Amount" shall mean, on any
Distribution Date, the sum of the Note Balance as of the Closing Date plus the
Certificate Balance as of the Closing Date, minus all amounts previously drawn
on the Policy or withdrawn from the Reserve Account in either case with respect
to Monthly Note Principal or Monthly Certificate Principal.

     As used herein, the term "Insurance Agreement" shall mean the Insurance and
Reimbursement Agreement, dated as of [__________], 20[__] among CarMax Auto
Funding LLC (the "Depositor"), CarMax Auto Superstores, Inc., individually, as
seller (the "Seller") and as servicer (the "Servicer") and the Insurer.

     As used herein, the term "Insolvency Proceeding" means (i) the
commencement, after the date hereof, of any bankruptcy, insolvency, readjustment
of debt, reorganization, marshalling of assets and liabilities or similar
proceedings by or against the Seller, the Servicer, the Depositor or the Trust,
or (ii) the commencement, after the date hereof, of any proceedings by or
against the Seller, the Servicer, the Depositor or the Trust for the winding up
or liquidation of its affairs or (iii) the consent, after the date hereof, to
the appointment of a trustee, conservator, receiver, or liquidator in any
bankruptcy, insolvency, readjustment of debt, reorganization, marshalling of
assets and liabilities or similar proceedings of or relating to the Seller, the
Servicer, the Depositor or the Trust.

     Subject to the foregoing, if any amount paid or required to be paid in
respect of the Insured Obligation is voided (a "Preference Event") under any
applicable bankruptcy,

                                       2

<PAGE>

insolvency, receivership or similar law in an Insolvency Proceeding, and, as a
result of such a Preference Event, the Beneficiary, the Noteholders or the
Certificateholders are required to return such voided payment, or any portion of
such voided payment made or to be made in respect of the Notes or the
Certificates, respectively (an "Avoided Payment"), the Insurer will pay an
amount equal to each such Avoided Payment, irrevocably, absolutely and
unconditionally and without the assertion of any defenses to payment, including
fraud in inducement or fact or any other circumstances that would have the
effect of discharging a surety in law or in equity, upon receipt by the Insurer
from the Beneficiary, the Noteholders or the Certificateholders of (x) a
certified copy of a final order of a court exercising jurisdiction in such
Insolvency Proceeding to the effect that the Beneficiary, the Noteholders or the
Certificateholders are required to return any such payment or portion thereof
prior to the Termination Date (as defined below) of this Policy because such
payment was voided under applicable law, with respect to which order the appeal
period has expired without an appeal having been filed (the "Final Order"), (y)
an assignment, in the form of Exhibit D hereto, irrevocably assigning to the
Insurer all rights and claims of the Beneficiary, the Noteholders or the
Certificateholders relating to or arising under such Avoided Payment and (z) a
Notice for Payment in the form of Exhibit A hereto appropriately completed and
executed by the Beneficiary, the Noteholders or the Certificateholders. Such
payment shall be disbursed to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Final Order and not to the Beneficiary, the
Noteholders or the Certificateholders directly unless such Noteholder or such
Certificateholder (as the case may be) has returned principal and interest paid
on the Notes or the Certificates (as the case may be) to such receiver,
conservator, debtor-in-possession or trustee in bankruptcy, in which case such
payment shall be disbursed to such Noteholder or such Certificateholder (as the
case may be).

     Notwithstanding the foregoing, in no event shall the Insurer be obligated
to make any payment in respect of any Avoided Payment, which payment represents
a payment of interest or the principal amount of the Notes or the Certificates,
prior to the time the Insurer would have been required to make a payment in
respect of such interest or principal pursuant to the first paragraph of this
Policy.

     Payment of amounts hereunder shall be made in immediately available funds
(x) pursuant to the first paragraph of this Policy on the later of (a) 12:00
noon, New York City time, on the Distribution Date or (b) 12:00 noon, New York
City time, on the second Business Day following presentation to the Insurer and
[____________________], as Fiscal Agent for the Insurer or any successor fiscal
agent appointed by the Insurer (the "Fiscal Agent") (as hereinafter provided) of
a notice for payment in the form of Exhibit A hereto ("Notice for Payment"),
appropriately completed and executed by the Beneficiary, and (y) in respect of
Avoided Payments prior to 12:00 noon New York City time, on the second Business
Day following the Insurer's receipt of the documents required under clauses (x)
through (z) of the second preceding paragraph. Any such documents received by
the Insurer or the Fiscal Agent after 12:00 noon New York City time on any
Business Day or on any day that is not a Business Day shall be deemed to have
been received by the Insurer or the Fiscal Agent, as applicable, prior to 12:00
noon on the next succeeding Business Day. All payments made by the Insurer
hereunder will be made with the Insurer's own funds. A Notice for Payment under
this Policy may be presented to the Fiscal Agent and the Insurer on any Business
Day following the Determination Date in respect of which the Notice for Payment
is being presented, by (a) delivery of the original Notice for

                                       3

<PAGE>

Payment to the Fiscal Agent and the Insurer at their respective addresses set
forth below, or (b) facsimile transmission of the original Notice for Payment to
the Fiscal Agent and the Insurer at their respective facsimile numbers set forth
below. If presentation is made by facsimile transmission, the Beneficiary shall
(i) simultaneously confirm transmission by telephone to the Fiscal Agent and the
Insurer at their respective telephone numbers set forth below, and (ii) as soon
as reasonably practicable, deliver the original Notice for Payment to the Fiscal
Agent and the Insurer at their respective addresses set forth below.

     If any Notice for Payment received by the Fiscal Agent is not in proper
form or is otherwise insufficient for the purpose of making a claim hereunder,
it shall be deemed not to have been received by the Fiscal Agent and the
Insurer, and the Insurer or the Fiscal Agent, shall promptly so advise the
Indenture Trustee, and the Indenture Trustee may submit an amended Notice for
Payment.

     Payments due hereunder unless otherwise stated herein will be disbursed by
the Fiscal Agent or the Insurer to the Indenture Trustee on behalf of the
Noteholders and the Certificateholders by wire transfer of immediately available
funds in the amount of such payment.

     The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to the Noteholders or the Certificateholders for any
acts of the Fiscal Agent or any failure of the Insurer to deposit or cause to be
deposited sufficient funds to make payments due under this Policy.

     The Insurer hereby waives and agrees not to assert any and all rights to
require the Beneficiary to make demand on or to proceed against any person,
party or security prior to the Beneficiary demanding payment under this Policy.

     No defenses, set-offs and counterclaims of any kind available to the
Insurer so as to deny payment of any amount due in respect of this Policy will
be valid and the Insurer hereby waives and agrees not to assert any and all such
defenses, set-offs and counterclaims, including, without limitation, any such
rights acquired by subrogation, assignment or otherwise.

     The Insurer shall be subrogated to the rights of the Noteholders and the
Certificateholders to receive payments under the Notes and the Certificates to
the extent of any payment by the Insurer hereunder.

     Any rights of subrogation acquired by the Insurer as a result of any
payment made under this Policy shall, in all respects, be subordinate and junior
in right of payment to the prior indefeasible payment in full of all amounts due
the Noteholders and the Certificateholders under the Notes and the Certificates.
the Insurer's obligations under this Policy shall be discharged to the extent
funds to pay the Insured Obligation are deposited into the Collection Account,
the Note Payment Account or the Certificate Payment Account by the Servicer or
the Indenture Trustee, as applicable, in accordance with the Sale and Servicing
Agreement (except to the extent such payment is thereafter returned as an
Avoided Payment) or disbursed by the Insurer as provided in this Policy, whether
or not such funds are properly applied by the Owner Trustee or the Beneficiary.

                                       4

<PAGE>

     This Policy is neither transferable nor assignable, in whole or in part,
except to a successor trustee duly appointed and qualified under the Agreement.
Such transfer and assignment shall be effective upon receipt by the Insurer of a
copy of the instrument effecting such transfer and assignment signed by the
transferor and by the transferee, and a certificate, properly completed and
signed by the transferor and the transferee, in the form of Exhibit B hereto
(which shall be conclusive evidence of such transfer and assignment), and, in
such case, the transferee instead of the transferor shall, without the necessity
of further action, be entitled to all the benefits of and rights under this
Policy in the transferor's place, provided that, in such case, the Notice for
Payment presented hereunder shall be a certificate of the transferee and shall
be signed by one who states therein that he is a duly authorized officer of the
transferee.

     All notices, presentations, transmissions, deliveries and communications
made by the Beneficiary to the Insurer with respect to this Policy shall
specifically refer to the number of this Policy and shall be made to the Insurer
at:

          [____________________]
          [____________________]
          [____________________]
          Attention: [____________________]
          Telephone: [____________________]
          Facsimile: [____________________]

or such other address, telephone number or facsimile number as the Insurer may
designate to the Beneficiary in writing from time to time. Each such notice,
presentation, transmission, delivery and communication shall be effective only
upon actual receipt by the Insurer.

     Any notice hereunder delivered to the Fiscal Agent may be made at the
address listed below for the Fiscal Agent or such other address as the Insurer
shall specify in writing to the Indenture Trustee, the Seller and the Depositor.

     The notice address of the Fiscal Agent is [____________________],
[____________________], Attention: [____________________], Facsimile:
[____________________], Telephone: [____________________] or such other address
as the Fiscal Agent shall specify in writing to the Indenture Trustee, the
Seller and the Depositor.

     The obligations of the Insurer under this Policy are irrevocable, primary,
absolute and unconditional (except as expressly provided herein) and neither the
failure of the Indenture Trustee, the Depositor, the Seller, the Servicer, the
Trust or any other person to perform any covenant or obligation in favor of the
Insurer (or otherwise), nor the failure or omission to make a demand permitted
hereunder, nor the commencement of any bankruptcy, debtor or other insolvency
proceeding by or against the Indenture Trustee, the Depositor, the Seller, the
Servicer, the Trust or any other person shall in any way affect or limit the
Insurer's obligations under this Policy. If an action or proceeding to enforce
this Policy is brought by the Beneficiary, the Beneficiary shall be entitled to
recover from the Insurer costs and expenses reasonably incurred, including
without limitation reasonable fees and expenses of counsel.

     There shall be no acceleration payment due under this Policy unless such
acceleration is at the sole option of the Insurer.

                                       5

<PAGE>

     This Policy and the obligations of the Insurer hereunder shall terminate on
the day (the "Termination Date") on which the earliest of the following occurs:
(i) the Insurer receives written notice, signed by the Beneficiary,
substantially in the form of Exhibit C hereto, stating that the Agreement has
been terminated pursuant to its terms, (ii) the date which is ninety-one days
following the Distribution Date occurring on [__________], 20[__] and (iii) the
date which is ninety-one days following the Distribution Date upon which the
later of the final distribution on the Notes or the Certificates is made.

     The foregoing notwithstanding, if an Insolvency Proceeding is existing
during the ninety-one day period set forth in clauses (ii) or (iii) above, then
this Policy and the Insurer's obligations hereunder shall terminate on (and the
"Termination Date" shall be) the later of (i) the date of the conclusion or
dismissal of such Insolvency Proceeding without continuing jurisdiction by the
court in such Insolvency Proceeding, and (ii) the date on which the Insurer has
made all payments required to be made under the terms of this Policy in respect
of Avoided Payments.

     This Policy is not covered by the property/casualty insurance fund
specified in Article Seventy-Six of the New York State insurance law.

     This Policy sets forth in full the undertaking of the Insurer, and shall
not be modified, altered or affected by any other agreement or instrument,
including any modification or amendment to any other agreement or instrument, or
by the merger, consolidation or dissolution of the Trust or any other Person and
may not be canceled or revoked by the Insurer prior to the time it is terminated
in accordance with the express terms hereof. The Premium on this Policy is not
refundable for any reason.

     This Policy shall be returned to the Insurer upon termination.

     THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF
WHICH MAY REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

                                       6

<PAGE>

     IN WITNESS WHEREOF, the Insurer has caused this Policy to be duly executed
on the date first written above.

                             [____________________]


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       7

<PAGE>

                                             Exhibit A to Policy Number [______]

[____________________]
[____________________]
[____________________]
Attention: [____________________]

                               NOTICE FOR PAYMENT

                          UNDER POLICY NUMBER [______]

     [____________________], as indenture trustee (the "Indenture Trustee"),
hereby certifies to [____________________] (the "Insurer") with reference to
that certain Policy, Number [______] dated [__________], 20[__] (the "Policy"),
issued by the Insurer in favor of the Indenture Trustee under the Indenture,
dated as of [__________], 20[__] (the "Agreement") between CarMax Auto Owner
Trust 20[__]-[__] and [____________________], as indenture trustee, as follows:

     1. The Indenture Trustee is the Beneficiary under the Policy.

     2. The Indenture Trustee is entitled to make a demand under the Policy
[pursuant to Section 4.6(c) of the Sale and Servicing Agreement][as a result of
the occurrence of a Preference Event as defined in the Policy].

[For a Notice for Payment in respect of a Distribution Date use the following
paragraphs 3, 4, and 5.]

     3. This notice relates to the [insert date] Distribution Date. The Policy
Amount, as specified to the Indenture Trustee by the Servicer, for such
Distribution Date is $[____________]. The amount demanded by this notice for the
benefit of the Noteholders and the Certificateholders does not exceed such
Policy Amount.

     4. The Indenture Trustee demands payment of $[_______________] which
consists of [Total Servicing Fee in the amount of $_______________]; [Total Note
Interest in the amount of $_______________]; [Total Certificate Interest in the
amount of $_______________]; [Monthly Note Principal in the amount of
$_______________]; [and Monthly Certificate Principal in the amount of
$_______________].

     5. The amount demanded is to be paid in immediately available funds to the
Collection Account at [________], account number [________] [except that
$_______________ of such amount is to be paid to the Certificate Payment Account
at ____________, account number ____________].

[For a Notice for Payment in respect of an Avoided Payment use the following
paragraphs 3, 4, and 5.]

<PAGE>

     3. The Indenture Trustee hereby represents and warrants, based upon
information available to it, that (i) the amount entitled to be drawn under the
Policy on the date hereof in respect of Avoided Payments is
[$_______________](ii) each Noteholder and Certificateholder with respect to
which the drawing is being made under the Policy has paid or simultaneously with
such draw on the Policy will pay such Avoided Payment, and (iii) the documents
required by the Policy to be delivered in connection with such Avoided Payment
have previously been presented to the Insurer or are attached hereto.

     4. The Indenture Trustee hereby demands payment of the Avoided Payment in
the amount of [$_______________] and the Indenture Trustee hereby represents and
warrants, based upon information available to it, that such amount is not in
excess of the sum of (i) the Policy Amount calculated without regard to clause
(x)(A)(i) of the definition thereof, as of the date hereof, and (ii) interest
thereon (which interest is the amount paid to the Noteholders or the
Certificateholders on the date the Trust made the payment that has been voided).

     5. The amount demanded is to be paid in immediately available funds by wire
transfer to [_________________].

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Agreement.

     Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading Information Concerning Any Fact Material Thereof, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.

     IN WITNESS WHEREOF, this notice has been executed this [____] day of
[____________], [______].

                  , as Indenture Trustee
------------------


By:
    ---------------------------------
    Authorized Officer

                                       2

<PAGE>

                                             Exhibit B to Policy Number [______]

[____________________]
[____________________]
[____________________]
Attention: [____________________]

Dear Sirs:

     Reference is made to that certain Policy, Number [______] dated
[__________], 20[__] (the "Policy") which has been issued by
[____________________] in favor of [____________________], as Indenture Trustee.

     The undersigned [Name of Transferor] has transferred and assigned (and
hereby confirms to you said transfer and assignment) all of its rights in and
under said Policy to [Name of Transferee] and confirms that [Name of Transferor]
no longer has any rights under or interest in said Policy.

     Transferor and Transferee have indicated on the face of said Policy that it
has been transferred and assigned to Transferee.

     Transferee hereby certifies that it is a duly authorized transferee under
the terms of said Policy and is accordingly entitled, upon presentation of the
document(s) called for therein, to receive payment thereunder.

-------------------------------------
[Name of Transferor]


By:
    ---------------------------------
    [Name and Title of
    Authorized Officer of Transferor

-------------------------------------
[Name of Transferee]


By:
    ---------------------------------
    [Name and Title of
    Authorized Officer of Transferee]

<PAGE>

                                             Exhibit C to Policy Number [______]

[____________________]
[____________________]
[____________________]
Attention: [____________________]

Dear Sirs:

     Reference is made to that certain Policy, Number [______] dated
[__________], 20[__] (the "Policy"), issued by the Insurer in favor of the
Indenture Trustee under the Indenture dated as of [__________], 20[__] between
CarMax Auto Owner Trust 20[__]-[__] and [____________________], as indenture
trustee (the "Indenture Trustee") (the "Agreement").

     The undersigned hereby certifies and confirms that the Agreement and the
Trust have been terminated, with respect to the Noteholders and the
Certificateholders, pursuant to their terms and that the Collection Account
contains sufficient funds after taking into account all payments [         ] to
pay in full all payments due under presently outstanding Notes and Certificates
(referred to in said Policy) and to pay in full all payments due to the Insurer
under the Agreement and the Insurance and Reimbursement Agreement dated as of
[__________], 20[__] among CarMax Auto Superstores, Inc., individually, as
Seller and as Servicer, CarMax Auto Funding LLC and the Insurer. Accordingly,
said Policy is hereby terminated in accordance with its terms. The Indenture
Trustee hereby surrenders the Policy to the Insurer for cancellation and hereby
instructs the Insurer to cancel the same, effective on the date of its receipt
of this certificate.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Agreement.

     IN WITNESS WHEREOF, this notice has been executed this [__] day of
[__________], [____].

[____________________], as Indenture Trustee


By:
    ---------------------------------
            Authorized Officer

                                       2

<PAGE>

                                             Exhibit D to Policy Number [______]

                               Form of Assignment

     Reference is made to that certain Policy No. [______], dated [__________],
20[__] (the "Policy") issued by [____________________] (the "Insurer") relating
to the CarMax Auto Owner Trust 20[__]-[__]. Unless otherwise defined herein,
capitalized terms used in this Assignment shall have the meanings assigned
thereto in the Policy or as incorporated by reference therein. In connection
with the Avoided Payment of [$_______________] [paid on __________] [which is
being paid on the date hereof] by the undersigned (the "Holder") and the payment
by the Insurer in respect of such Avoided Payment pursuant to the Policy, the
Holder hereby irrevocably and unconditionally, without recourse, representation
or warranty (except as provided below), sells, assigns, transfers, conveys and
delivers all of such Holder's rights, title and interest in and to any rights or
claims, whether accrued, contingent or otherwise, which the Holder now has or
may hereafter acquire, against any person relating to, arising out of or in
connection with such Avoided Payment. The Holder represents and warrants that
such claims and rights are free and clear of any lien or encumbrance created or
incurred by such Holder./1/

-------------------------------------
Holder of Note or Certificate

----------
     /1/ In the event that the terms of this form of assignment are reasonably
determined to be insufficient solely as a result of a change of law or
applicable rules after the date of the Policy to fully vest all of the Holder's
right, title and interest in such rights and claims, the Holder and the Insurer
shall agree on such other form as is reasonably necessary to effect such
assignment, which assignment shall be without recourse, representation or
warranty except as provided above.