Used Car News

CarMax Inc. is seeking a new warehouse facility to replaced $1.4 billion facility that expires in July 2009.
As of May 31, $636 million of auto loan receivables were outstanding in the warehouse facility and unused warehouse capacity totaled $764 million. The facility is used as the initial funding source for CarMax Auto Finance auto loans.

The company recently reported its results for the quarter that ended May 31.
Net sales and operating revenues decreased 17 percent to $1.83 billion from $2.21 billion in the same period a year ago. But profits only dropped 3 percent, to $28.7 million from $29.6 million.
The results beat Wall Street expectations, according to a CarMax spokesperson.
CarMax performed right in line with the overall used-car industry during that period, said Art Spinella, president of CNW Marketing Research.
The company aims to outperform its competition, but Spinella said executive were probably happy for average in this environment.
Comparable store used unit sales declined 17 percent for the quarter total used unit sales fell by 13 percent.
Higher funding costs and other adjustments related to CarMax Auto Finance (CAF) loans originated in prior fiscal years hurt profits.
CarMax began slowing the rate of CAF originations last fall. This strategy, combined with continuing weakness in floor traffic, helped drive the same-store sales decline, said CarMax CEO Tom Folliard.
“While our customer traffic trend continued to be weak, we did see improvement in the first quarter compared with the fourth quarter of fiscal 2009,” he.
Wholesale unit sales declined 25 percent compared with the same period last year. The decline primarily reflected continued depressed levels of appraisal traffic, partly offset by a slight improvement in the company’s buy.
Other sales and revenues declined 4 on a year-over-year basis.
Extended service plan revenues decreased 5 percent. Service department sales increased 9 percent, reflecting higher service-related customer traffic. Third-party finance fees declined 42 percent, primarily reflecting a mix shift among providers, as well as the lower retail unit sales.
Total gross profit declined 2 percent to $276.2 million from $282.7 million, despite the 17 percent decline in total revenues.
Used vehicle gross profit per unit increased to $2,001 per unit from $1,742 per unit in the prior year quarter.
CarMax executives attribute this improvement in part to below-average profitability in the spring quarter of 2009, when the initial slowdown in customer traffic and the rapid decline in underlying wholesale values of SUVs and trucks put pressure on our used vehicle margins. The improvement also reflected benefits realized from the company’s initiatives to reduce vehicle reconditioning costs.
Wholesale vehicle gross profit per unit increased to $904 per unit from $784 per unit in the first quarter of fiscal 2009.