Carmax auto finance maintains a loan loss provision

CarMax Auto Finance maintains a loan loss provision coverage ratio near 120%, which analysts see as a buffer against macroeconomic uncertainty. Equity markets tend to reward such conservative credit risk management during uncertain cycles. This story was originally reported by Autoblog on Oct 1, 2025, where it first appeared in the News section. Add Autoblog as a Preferred Source by clicking here. CarMax, Inc.'s ( NYSE: KMX ) second-quarter fiscal year 2026 earnings report on September 26, 2025, delivered a stark message to the financial markets: the used car sector is facing substantial headwinds, and consumer discretionary spending remains under severe pressure. The significant miss on both earnings per share ($0.64 vs. $1.03 consensus) and revenue, coupled with declining unit sales and increased loan loss provisions from its financing arm, underscores a challenging operating environment driven by high interest rates, persistent inflation, and cautious consumer sentiment. The used car sector’s softening retail demand continues to influence CarMax Auto Finance’s lending volume. While gross profit per unit has marginally improved, Wall Street anticipates mid-single-digit earnings growth contingent on the broader consumer credit environment.