CARMAX continues to struggle in the current used vehicle market. Between awful interest rates, overpriced cars, record high inventory, record high repo rates and loan defaults, and record high negative equity... They are in a tight spot. A drastic change needs to take place into their business model/approach if they intend to make it through the terrible down-swing in the market. People are refusing to buy from Carmax right now... Anyone who takes just a few minutes to do their homework online will know the prices at Carmax need to come down in order to be competitive. Carmax needs to slash prices across the board and sell to their customers versus auctioning everything off. They'd rather lose more on a vehicle to wholesale instead of selling to a consumer and earning a possible customer for life. I don't get that? Feels like a near-sighted business model.
People certainly overpaid for their vehicles throughout COVID, much of that was due to greedy dealerships hiking up the prices well above MSRP. Putting ADMs or Markups on desirable vehicles put a lot of people in a sticky situation. The average negative equity across the US right now is $6K. That's the worst it's ever been. A change needs to happen in order for Carmax to succeed.
I think folks should wait another 90-120 days before they try to buy a vehicle. The wholesale market always foreshadows the retail market. I foresee an even larger dip in used vehicle prices come April 2024. What are your thoughts? Do you think we'll see a market correction in used vehicle prices? When would you suggest people buy their vehicles?
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