Reedy: CarMax Lending Arm Won't Fully Play In Subprime Market
Though CarMax’s lending arm will press forward with its subprime lending test program, it won’t be a major player in the subprime game.
According to Automotive News, CarMax CFO Tom Reedy said as much during an earnings call with the media and analysts this month, stating that the company has three partners already doing well for CarMax in the subprime market; thus, no reason for CarMax Auto Finance to take a greater role in said market like it does in the prime lending market.
For now, the lending arm will continue loan originations at 5 percent of subprime vehicle sales for the duration of the testing period, which began January 2014. The arm originated $72.2 million of receivables under the program through the end of February 2015.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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CarMax has earned some kudos from me on this one. I have a CarMax car and I have to admit the company goes out of its way to make the buying process easy and streamlined--unlike the majority of Franchised dealerships. But no, I did not take a loan from CarMax to buy the car; I get better interest rates elsewhere. The fact that CarMax is not willing to 'bet the bank' on sub-prime loans tells me they intend to become and remain the best of the best in used car sales.
I once considered buying a vehicle from carmax but after reading the user reviews i dropped that idea. they seem to draw in naive and unsuspecting [mentally challenged] people to buy their bag of tricks. Son bought one without talking with me so he will have to learn the hard way. Carmax really ripped him a NEW ONE but i guess if he doesn't want to check things out then he has to learn the hard way. Other sons are much wiser and know the difference between peanut butter and shit.Oh well, he will survive and hopefully become a wiser person...but i am not holding my breath on this kid. he charges on and seems to know all the answers even if he doesn't.