CarMax

What CarMax does

CarMax, Inc. (NYSE: KMX), headquartered in Richmond, Virginia, is the largest used-vehicle retailer in the United States, operating more than 250 stores across 41 states alongside its CarMax.com e-commerce platform. The company sells used cars to individual consumers through a no-haggle pricing model, an omnichannel buying and selling experience, and an in-house financing arm (CarMax Auto Finance, or CAF) that financed 43.3% of Q1 FY2027 retail unit volume and is the largest Tier 2 lender in the segment. It also runs a wholesale auction business (units up 8.4% YoY in Q1 FY2027), sells extended protection plans, and serves a customer base that ranges from prime-credit consumers to subprime borrowers, with no minimum credit score requirement for financing. The business model blends retail gross profit per unit (~$2,177 in Q1 FY2027) with recurring CAF and protection-plan attach revenue; FY2026 revenue was approximately $28.3B with ~$1.1B in EBITDA.

The technology stack is a hybrid retail platform: CarMax.com handles online search, appraisal, and prequalification, while the Skye virtual chat assistant (launched 2020) and a ChatGPT application (launched May 2026, first from an American auto retailer) provide natural-language vehicle search and appraisal on top of OpenAI's foundation models. In-store and online experiences are stitched together through online prequalification that routes into physical visits, supported by UserTesting and Figma-based experience design work. The wholesale channel uses auction infrastructure to dispose of vehicles not sold at retail.

In early 2026, activist investor Starboard Value acquired a 4.4% stake and pushed for stronger digital execution, dynamic pricing, and deeper cost discipline, contributing to CEO Bill Nash's removal and the appointment of Keith Barr (formerly of InterContinental Hotels Group) as President and CEO on March 16, 2026. New management has articulated a four-pillar strategy — competitive pricing, digital-physical integration, growing financing/protection-plan attach, and a $200M SG&A savings target by FY2027 — and is deliberately accepting near-term gross profit per unit compression to drive volume and recapture share from digital-first competitors.

Name

CarMax

Legal name

CarMax, Inc.

Website

https://carmax.com

Company type

Public

Founded year

2003

Operating status

Operating

Headcount range

5,001–10,000 employees

Ownership category

akta.pro rank

Product category

Used Vehicle Retail

NAICS

Used Car Dealers (441120), Automobile Dealers (4411), Motor Vehicle and Parts Dealers (441)

SIC

Retail-Auto Dealers & Gasoline Stations (5500)

akta.pro primary industry

Automotive Parts & Accessories Online Retailers (CRAFADAK)

akta.pro secondary industry

New & Used Auto Purchase Loans (FSAKADAA)

Keywords

• Used car retail
• Auto financing
• Vehicle appraisal
• Extended warranties
• Wholesale auctions

Headquarters

HQ city

Richmond

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2C

Offering type

Services

Cost components

Operations, Supply Chain, Personnel, Marketing or Sales, Technology or R&D, Others

Revenue model

1. Used Vehicle Retail Sales: Sale of used vehicles directly to consumers through retail stores and online platforms. Revenue generated from the difference between vehicle acquisition cost and selling price. The company reported Q1 FY2027 revenue of $8.01 billion with combined retail and wholesale unit sales of 392,357 vehicles.
2. Auto Financing (CarMax Auto Finance): In-house financing arm that provides auto loans to customers. CAF financed 43.3% of retail units in Q1 FY2027, making it the largest Tier 2 lender. CAF income was $140.2 million in Q1 FY2027. The company expanded Tier 2 penetration from 10% to 25%, with a $96 million loan loss provision.
3. Extended Protection Plans: Revenue from vehicle protection plans and service contracts offered to customers during vehicle purchases. Management target of approximately $35 per unit in incremental extended protection plans for fiscal year 2027.
4. Wholesale Vehicle Sales: Sale of vehicles through wholesale auctions, with unit sales up 8.4% in Q1 FY2027. Wholesale channel drove overall volume growth with 8% increase in wholesale units.

Pricing tiers

Go-to-market motion2 records

Distribution channels4 records

Marketing channels3 records

Core offering

CarMax is the largest used car retailer in the United States, operating more than 250 retail stores across 41 states alongside an e-commerce platform. The company sells used vehicles through a no-haggle pricing model, provides in-house auto financing through CarMax Auto Finance (CAF), and runs a wholesale vehicle auction channel. Adjacent revenue lines include extended protection plans and an omnichannel experience integrating online prequalification with in-store transactions.

Product overview

CarMax operates as the largest used car retailer in the United States, offering a platform-plus-services model combining physical retail stores (250+ locations across 41 states) with digital commerce capabilities. The core offering includes used vehicle retail sales, wholesale auction services, and in-house auto financing through CarMax Auto Finance (CAF). Adjacent services include extended protection plans and an omnichannel experience integrating online prequalification with physical store visits. The company has invested in AI capabilities including the Skye virtual assistant (launched 2020) and a ChatGPT app (launched May 2026) for natural language vehicle search and appraisal tools.

Differentiator

Problem solved

Functional benefit

Quantifiable outcome

• Q1 FY2027 revenue of $8.01 billion, up 6.2% year-over-year, beating analyst expectations
• +3 more outcomes

Named customers2 records

Segments2 records

Ideal customer profiles2 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

AI capability2 records

Feature4 records

Scale indicators9 records

Recent moves6 records

Expansion highlights5 records

Direct peers

• Carvana: Carvana is the closest direct competitor to CarMax in online used vehicle retail, operating a pure-play e-commerce model with vehicle vending machines. It competes head-to-head on selection, pricing transparency, and home delivery, though CarMax retains a physical-store omnichannel advantage.
• DriveTime: DriveTime is a used vehicle retailer focused on subprime and near-prime financing customers, overlapping directly with CarMax Auto Finance's target segment. It competes on integrated vehicle sales and in-house lending, similar to CarMax's no-credit-score model.

Broad incumbents

• AutoNation: AutoNation is the largest US auto dealer group, selling new and used vehicles across multiple brands through ~300 stores. It overlaps with CarMax in used vehicle retail and used-car financing (AutoNation Finance), but as a much broader full-line incumbent.
• Lithia Motors: Lithia Motors is a Fortune 500 dealer group operating hundreds of new and used vehicle franchises plus the Driveway online used-car platform. It competes with CarMax on omnichannel used-car retail and is expanding its captive financing capabilities.
• Group 1 Automotive: Group 1 Automotive is a large US/UK franchised auto dealer group selling new and used vehicles. Its used-car and F&I businesses overlap with CarMax's, but it operates primarily as a multi-brand franchise dealer rather than a pure used-car retailer.
• Sonic Automotive: Sonic Automotive is a franchised auto dealer group operating EchoPark, a standalone used-vehicle retail concept that directly competes with CarMax. EchoPark is an emerging challenger in CarMax's core used-car segment.

Emerging players

• Vroom: Vroom is an online used car retailer that pioneered e-commerce vehicle sales and home delivery. It competes with CarMax on digital buying experience, though its scale and inventory breadth are materially smaller.

Others

• CarGurus: CarGurus is a leading online car shopping marketplace connecting buyers with dealer inventory. It serves as a top-of-funnel discovery channel for used vehicles and competes indirectly with CarMax.com for online shopper attention.
• TrueCar: TrueCar is an online automotive marketplace that provides pricing transparency and connects consumers with dealers. It overlaps with CarMax's no-haggle pricing model and competes for digital car shoppers, though it does not sell vehicles directly.
• Cox Automotive: Cox Automotive (owner of Manheim auctions, Autotrader, Kelley Blue Book) operates the largest US wholesale vehicle auction platform and key industry data assets. CarMax sells wholesale inventory to Manheim and uses KBB values, making Cox an ecosystem participant and partial competitor.

Market position

Strengths5 records

Weaknesses3 records

Competitive moat5 records

Key risks6 records

Key highlights7 records

Customer concentration

• Xx.com/CarMax
• Facebookfacebook.com/CarMax
• LinkedInlinkedin.com/company/carmax

Revenue estimate

Valuation estimate

Number of profiles

Profiles8 records

Subsidiaries1 record

Funding overview

Funding rounds1 record

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A1 record

Investments7 records

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about CarMax