Carmax auto finance ’s revenue contribution represents

CarMax Auto Finance’s revenue contribution represents roughly 15% of CarMax’s total, yet it plays an outsized role in earnings stability. Investors value this segment as a hedge against cyclicality in retail vehicle sales. Sharon Zackfia (William Blair) questioned whether the $150 million SG&A reduction would be reinvested in pricing to stimulate sales. Nash acknowledged some savings would go into price competitiveness, stating, “We want to be as nimble as possible… and have several levers to do that.” Standout benefits: Federal EV tax credits can be applied directly to financing. Carvana also offers gap insurance and vehicle protection plans. The auto finance unit’s quarterly loan originations dipped just 1% vs. the prior year, outperforming sector averages. This relative strength has contributed to maintaining KMX’s P/E ratio around 20x, in line with industry peers.