We are the nation’s largest retailer of used cars and the first used
vehicle retailer to offer a large selection of high quality used vehicles at
competitively low, “no-haggle” prices using a customer-friendly
sales process in an attractive, modern sales facility. The CarMax consumer offer
provides customers the opportunity to shop for vehicles the same way they shop
for items at other “big-box” retailers, and it is structured around
four customer benefits: low, no-haggle prices; a broad selection; high quality
vehicles; and a customer-friendly sales process.
Our strategy is to revolutionize the auto retailing market by addressing the
major sources of customer dissatisfaction with traditional auto retailers and
to maximize operating efficiencies through the use of standardized operating
procedures and store formats enhanced by sophisticated, proprietary management
information systems.
We purchase, recondition and sell used vehicles. All of the used vehicles we
retail are thoroughly reconditioned to meet our high standards, and each vehicle
must pass a comprehensive inspection before being offered for sale. We acquire
used vehicle inventory directly from consumers through our in-store appraisal
process and through other sources, including local, regional and online auctions,
wholesalers, franchised and independent dealers and fleet owners, such as leasing
companies and rental companies.
Our new car operations are governed by the terms of the sales, service and
dealer agreements. Among other things, these agreements generally impose operating
requirements and restrictions, including inventory levels, working capital,
monthly financial reporting, signage and cooperation with marketing strategies.
A manufacturer may terminate a dealer agreement under certain circumstances.
We offer customers a broad selection of makes and models of used vehicles,
including both domestic and imported vehicles, at competitive prices. Our used
car selection covers popular brands from manufacturers such as Chrysler, Ford,
General Motors, Honda, Hyundai, Kia, Mazda, Mitsubishi, Nissan, Subaru, Toyota
and Volkswagen and luxury brands such as Acura, BMW, Infiniti, Lexus and Mercedes.
Our primary focus is vehicles that are 1 to 6 years old, have fewer than 60,000
miles and generally range in price from $11,000 to $30,000. For the more cost-conscious
consumer, we also offer used cars that are more than 6 years old or have 60,000
miles or more and that generally range in price from $8,000 to $21,000.
We also sell new vehicles at five locations under franchise agreements with
four new car manufacturers (Chrysler, General Motors, Nissan and Toyota)
We provide customers with a full range of related products and services, including
the financing of vehicle purchases through CarMax Auto Finance (“CAF”),
our own finance operation, and third-party financing providers; the sale of
extended service plans, guaranteed asset protection and accessories; the appraisal
and purchase of vehicles directly from consumers; and vehicle repair service.
The CarMax consumer offer enables customers to evaluate separately each component
of the sales process and to make informed decisions based on comprehensive information
about the options, terms and associated prices of each component. The customer
can accept or decline any individual element of the offer without affecting
the price or terms of any other component of the offer. Our no-haggle pricing
and our commission structure, which is generally based on a fixed dollars-per-unit
standard, allow sales consultants to focus solely on meeting customer needs.
CarMax provides financing to qualified customers through CAF and a number of
third-party financing providers. In the event that one or more of these third-party
providers could no longer, or choose not to, provide financing to our customers,
could only provide financing to a reduced segment of our customers or could
no longer provide financing at competitive rates of interest, it could have
a material impact on our business, sales and results of operations. Additionally,
if we were unable to replace current third-party financing providers upon the
occurrence of one or more of the foregoing events, it could also have a material
impact on our business, sales and results of operations.
Competition. Automotive retailing is a highly competitive business. Our competition
includes publicly and privately owned new and used car dealers, as well as millions
of private individuals. Competitors sell the same or similar makes of vehicles
that we offer in the same or similar markets at competitive prices. Further,
new entrants to the market could result in increased acquisition costs for used
vehicles and lower-than-expected vehicle sales and margins. Competition could
be affected by the increasing use of the Internet to market and potentially
sell used vehicles and obtain vehicle financing. The increasing use of the Internet
in the automotive retailing business could reduce our sales and adversely affect
our results of operations. In addition, CAF is subject to competition from various
financial institutions
Tweet
82.45 %