I don’t see rates going up but if they do, it won’t be good for CarMax or any dealer. If that were to happen, delinquencies and loan loss provisions would rise and make cars less affordable across the board. That being said, CarMax reported a 6.6% net interest margin which was up last quarter. Their finance arm is highly profitable so they likely have some buffer there to lower contract rates if they needed to.
I don’t see rates going up but if they do, it won’t be good for CarMax or any dealer. If that were to happen, delinquencies and loan loss provisions would rise and make cars less affordable across the board. That being said, CarMax reported a 6.6% net interest margin which was up last quarter. Their finance arm is highly profitable so they likely have some buffer there to lower contract rates if they needed to.