{"version":"1.0.0","episode":{"title":"CarMax Is in SERIOUS Trouble (WORSE THAN WE THOUGHT) | Episode 1051","url":"http://getcarcurious.com/episodes/carmax-is-in-serious-trouble-worse-than-we-thought-episode-1051","audioUrl":"https://pdrl.fm/3359a6/pscrb.fm/rss/p/mgln.ai/e/1385/injector.simplecastaudio.com/14b42e71-1f9c-41b2-944f-bc8f2b3a3cb9/episodes/b9078c16-870f-4362-8b86-5a95e8f6289c/audio/128/default.mp3?aid=rss_feed&awCollectionId=14b42e71-1f9c-41b2-944f-bc8f2b3a3cb9&awEpisodeId=b9078c16-870f-4362-8b86-5a95e8f6289c&feed=gkrQ6WSC","description":"Today on CarEdge Live, Ray and Zach discuss the latest news from CarMax and discuss the used car market. Tune in to learn more! Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com\nfor information about our collection and use of personal data for\nadvertising.\n"},"annotations":[{"startTime":30.5,"endTime":131.76,"type":"company","title":"CarMax","url":"/glossary/carmax","quote":"We're gonna be talking about CarMax today, Dad. There is some serious trouble. It's worse than we thought... We've got the latest financial results from CarMax...","canonicalId":"company:carmax","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"CarMax is a large U.S. used-car retailer that buys vehicles, reconditions them, and sells them to consumers. The episode focuses on CarMax’s recent financial results and what they suggest about stress in the used-car business model.","simplifiedExplanation":"CarMax is a big company that sells used cars in the U.S. This segment is about how their recent money problems may reflect trouble in the used-car business overall."}},{"startTime":79.4,"endTime":86.7,"type":"concept","title":"$121 million loss","quote":"The first and foremost thing, they lost $121 million. That's a big deal at CarMax because they're used to making money.","canonicalId":"concept:121-million-loss","priority":0.5,"confidence":0.9,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"A $121 million loss is a large negative earnings figure for the quarter, signaling that costs and/or write-downs exceeded income. In used-car retail, big losses can be tied to pricing pressure, slower sales, and financing risk.","simplifiedExplanation":"A $121 million loss means the company lost a huge amount of money over that quarter. For a used-car dealer, that can happen when cars don’t sell fast enough or when financing and other costs go the wrong way."}},{"startTime":86.7,"endTime":91.4,"type":"concept","title":"lower their prices on vehicles","url":"/glossary/lower-their-prices-on-vehicles","quote":"At the same time, Dad, they had to lower their prices on vehicles, but they're still not selling.","canonicalId":"concept:lower-their-prices-on-vehicles","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Lowering vehicle prices is a common response when inventory isn’t moving fast enough. In a used-car retail model, price cuts can reduce margins and still fail to generate sales if demand is weak.","simplifiedExplanation":"If cars aren’t selling, dealers may drop prices to attract buyers. But if demand is still low, they might cut prices and still not sell enough cars to make money."}},{"startTime":91.4,"endTime":96.2,"type":"concept","title":"inventory not selling","url":"/glossary/inventory-not-selling","quote":"they had to lower their prices on vehicles, but they're still not selling. And one of the biggest pieces to this whole conundrum is the fact that they are setting up more and more sub-prime auto loans.","canonicalId":"concept:inventory-not-selling","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"When vehicles “aren’t selling,” it typically means inventory turnover slows—cars sit on lots longer. That increases holding costs and can force further price reductions, worsening profitability."}},{"startTime":300.3,"endTime":307.8,"type":"concept","title":"loan originations","url":"/glossary/loan-originations","quote":"In a sense that at this point, I think they're going to be more concerned with loan originations and then selling those loans as asset-backed securities, much like Carvalho does.","canonicalId":"concept:loan-originations","priority":0.5,"confidence":0.82,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Loan originations are the number of auto loans a company creates when financing vehicle purchases. The segment suggests CarMax may prioritize generating loans and then monetizing them rather than relying solely on vehicle profit.","simplifiedExplanation":"Loan originations means the company is arranging financing for car buyers. More loans can be a revenue stream even if car sales are slower."}},{"startTime":353.0,"endTime":363.4,"type":"term","title":"days on market","url":"/glossary/days-on-market","quote":"[353.0s] Well, and what I've done, Dad, is I've sorted by days on market up here in the top right. [356.9s] Yes. I'm curious, the most aged inventory at Carmac's.","canonicalId":"term:days-on-market","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Days on market (DOM) measures how long a vehicle has been listed for sale before it’s sold. Higher DOM usually indicates pricing pressure or weaker demand for that specific vehicle or trim, and it’s commonly used to gauge inventory health.","simplifiedExplanation":"Days on market tells you how long a car has been sitting on the dealer’s lot or website without selling. If it’s been listed a long time, it often means the price may be too high or the car isn’t moving."}},{"startTime":459.9,"endTime":471.7,"type":"concept","title":"lost $2,000 worth of its value from original MSRP","url":"/glossary/lost-2-000-worth-of-its-value-from-original-msrp","quote":"they think it's lost $2,000 worth of its value from original MSRP with 56,000 miles on it.","canonicalId":"concept:lost-2-000-worth-of-its-value-from-original-msrp","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"This is a “depreciation” comparison: how much value a vehicle loses from its original new price after years of ownership. The speakers argue that only losing about $2,000 over ~10 years (with 56k miles) is abnormal, highlighting how strong used pricing has stayed.","simplifiedExplanation":"They’re estimating how much the truck’s value dropped since it was new. Normally cars lose a lot more value over 10 years, so this small drop is surprising."}},{"startTime":493.7,"endTime":500.8,"type":"concept","title":"10% down","url":"/glossary/10-down","quote":"And let's say you put the 10% down for the fee. So you're looking to finance 30 grand on a 10-year-old vehicle.","canonicalId":"concept:10-down","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"A 10% down payment reduces the amount financed, but it doesn’t eliminate the impact of high interest rates and long loan terms. In affordability discussions, down payment size is crucial because it directly affects monthly payment calculations.","simplifiedExplanation":"Putting 10% down means you pay part of the price upfront. The rest is financed, so the down payment helps lower the loan amount, but interest still matters a lot."}},{"startTime":558.9,"endTime":562.3,"type":"concept","title":"price cuts","url":"/glossary/price-cuts","quote":"and a quarter, they lowered the price. They doubled first. They lowered the prices of their vehicles, yet they sold fewer to retail customers.","canonicalId":"concept:price-cuts","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Price cuts are reductions in the advertised selling price to stimulate demand. The segment argues that even after lowering prices, CarMax sold fewer cars to retail customers, implying demand weakness beyond just pricing.","simplifiedExplanation":"Price cuts mean the dealer lowers the asking price to try to sell more cars. Here, they’re saying lowering the price didn’t fix the sales problem."}},{"startTime":576.9,"endTime":582.5,"type":"term","title":"mileage","url":"/glossary/mileage","quote":"It's got 56,746 miles, which is significantly low mileage. And when we do the comparison, this is the depreciation analysis.","canonicalId":"term:mileage","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Mileage is the total distance a vehicle has been driven, usually shown as odometer miles. Lower mileage generally supports higher used-car pricing, and the segment calls out that 56,746 miles is “significantly low mileage.”"}},{"startTime":652.7,"endTime":659.3,"type":"term","title":"original MSRP of $32,085","url":"/glossary/original-msrp-of-32-085","quote":"To be clear here, this is an original MSRP on this vehicle of $32,085. If you bought this used from CarMax today with these financing terms, you're going to spend $44,000 on it.","canonicalId":"term:original-msrp-of-32-085","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"This is the new-car sticker price used as the baseline for the depreciation and value comparison. The segment uses it to argue the used price is still too high relative to how old the Tacoma is.","simplifiedExplanation":"This is the price the Tacoma cost when it was new. They’re using it to show the used price doesn’t seem to reflect normal aging."}},{"startTime":682.9,"endTime":687.4,"type":"concept","title":"depreciation","url":"/glossary/depreciation","quote":"Used to be that used cars were a better value than new cars. You got some of the depreciation.","canonicalId":"concept:depreciation","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Depreciation is how much a car’s value drops over time. The speakers are arguing that used cars used to feel like a better deal because buyers captured some of that depreciation instead of paying new-car pricing.","simplifiedExplanation":"Depreciation is how a car loses value as it gets older. When you buy used, you often pay less because the car has already “lost” some of its value."}},{"startTime":740.9,"endTime":749.0,"type":"term","title":"appreciated","url":"/glossary/appreciated","quote":"Mercedes, an Audi Q8, Prestige. Wow, that thing appreciated a bunch.","canonicalId":"term:appreciated","priority":0.5,"confidence":0.9,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Appreciation is when a car’s value increases over time instead of decreasing. The speaker uses it to contrast with typical depreciation and to show that some vehicles can become more valuable due to demand or supply constraints.","simplifiedExplanation":"Appreciation means the car got more valuable instead of less valuable. That’s unusual for most cars, so it stands out in the pricing discussion."}},{"startTime":740.9,"endTime":749.0,"type":"car","title":"Audi Q8","url":"/cars/audi/q8","image":"https://upload.wikimedia.org/wikipedia/commons/3/30/Audi_Q8%2C_Paris_Motor_Show_2018%2C_Paris_%281Y7A1776%29.jpg","quote":"Mercedes, an Audi Q8, Prestige. Wow, that thing appreciated a bunch.","canonicalId":"car:audi:q8","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"The Audi Q8 is a luxury midsize SUV, mentioned here as part of a lineup of vehicles used to compare how pricing and value can move differently. The speaker notes one of these “appreciated a bunch,” highlighting that not all models depreciate the same way.","simplifiedExplanation":"The Audi Q8 is a luxury SUV. They’re using it as an example to show that some vehicles keep their value better than others.","imageAttribution":"Matti Blume (CC BY-SA 4.0)"}},{"startTime":756.0,"endTime":764.9,"type":"term","title":"standard equipment","url":"/glossary/standard-equipment","quote":"They negated some of the standard equipment and they brought the price down.","canonicalId":"term:standard-equipment","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Standard equipment refers to the features included as part of the base trim. The speaker says the Oxford Edition “negated” some standard equipment to lower the purchase price.","simplifiedExplanation":"Standard equipment is the list of features that come with the car by default. If a trim removes some standard features, it usually lowers the price."}},{"startTime":771.3,"endTime":776.0,"type":"term","title":"miles","url":"/glossary/miles","quote":"They're asking $15 grand for it. It's got 60,000 miles, which again is relatively low miles.","canonicalId":"term:miles","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Mileage is a major factor in used-car valuation and buyer expectations. The speaker notes 60,000 miles on a 2019 MINI as “relatively low,” implying it should support a higher price than a higher-mile example.","simplifiedExplanation":"Mileage is how much the car has been driven. Lower mileage usually makes a used car more valuable, all else equal."}},{"startTime":776.0,"endTime":781.5,"type":"term","title":"111 days on the market","url":"/glossary/111-days-on-the-market","quote":"It's got 60,000 miles, which again is relatively low miles. You'd expect 2019 to have more miles. But it is a mini. I mean, they break me. 111 days on the market.","canonicalId":"term:111-days-on-the-market","priority":0.5,"confidence":0.9,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"“Days on the market” measures how long a vehicle sits listed for sale before it’s sold. Longer time-on-market often pressures dealers to reduce prices to attract buyers.","simplifiedExplanation":"Days on the market is how long the car has been sitting for sale. If it takes a long time to sell, the seller usually has to lower the price."}},{"startTime":840.7,"endTime":846.9,"type":"term","title":"warranty","url":"/glossary/warranty","quote":"Yeah, that's the unfortunate thing is that it's a mini and that the cost to maintain a mini once it's out of warranty and factory maintenance is expensive.","canonicalId":"term:warranty","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"A warranty is the manufacturer’s (or dealer’s) promise to cover certain repairs for a set time/mileage. Once it expires, you’re responsible for maintenance and repairs, which can make the same car much more expensive to own.","simplifiedExplanation":"A warranty is like a repair guarantee for a limited time. After it ends, you pay for fixes yourself, so costs can jump."}},{"startTime":850.5,"endTime":857.0,"type":"concept","title":"original MSRP was 24,000","url":"/glossary/original-msrp-was-24-000","quote":"is it actually a $15,000 vehicle when the original MSRP was 24,000, seven years ago?","canonicalId":"concept:original-msrp-was-24-000","priority":0.5,"confidence":0.8,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"This is an example of “depreciation vs. current price” reasoning—how much value the car has lost since it was new. If a used car’s price doesn’t reflect expected depreciation, it can signal a market that’s still propped up by demand or supply constraints.","simplifiedExplanation":"They’re comparing what the car cost new to what it costs now. If the used price hasn’t dropped much, it may not be a great bargain."}},{"startTime":1050.6,"endTime":1068.4,"type":"company","title":"Carfax","url":"/glossary/carfax","quote":"I'm going to pull up the latest data from Carfax. The latest data from Carfax... Carfax has this new press release, this new study...","canonicalId":"company:carfax","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Carfax is a vehicle history and valuation data provider used by dealers and consumers. Here, the speaker cites Carfax data and a Carfax press release/study about rising used-car prices.","simplifiedExplanation":"Carfax is a company that tracks vehicle history and publishes data dealers use to understand the market. In this segment, they’re using Carfax information to show used car prices are rising."}},{"startTime":1078.7,"endTime":1082.1,"type":"company","title":"Blackbook","url":"/glossary/blackbook","quote":"people like us who are about to show you the Blackbook data, which for another week shows wholesale used car prices increasing...","canonicalId":"company:blackbook","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Black Book is a vehicle valuation service that tracks wholesale pricing trends for used cars. The speaker contrasts Black Book’s wholesale increases with Carfax’s retail pricing narrative.","simplifiedExplanation":"Black Book is a company that estimates what used cars are worth, especially for dealer-to-dealer (wholesale) pricing. They’re using it to show wholesale prices are also moving up."}},{"startTime":1366.0,"endTime":1373.4,"type":"concept","title":"MSRPs","url":"/glossary/msrps","quote":"Could that have something to do with the fact that the prices of new cars continues to go up as well? The MSRPs continue to go up.","canonicalId":"concept:msrps","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"MSRP stands for Manufacturer’s Suggested Retail Price, the sticker price automakers publish for new cars. When MSRPs rise, it can lift the entire pricing ladder—new-car affordability worsens and used prices often follow.","simplifiedExplanation":"MSRP is the “list price” for a new car set by the manufacturer. If list prices go up, new cars get more expensive, and used cars often become more expensive too."}},{"startTime":1471.8,"endTime":1489.8,"type":"term","title":"aged vehicles","url":"/glossary/aged-vehicles","quote":"...especially on their older ones... And so that's why we've seen them on their aged vehicles sit on those prices for four months","canonicalId":"term:aged-vehicles","priority":0.5,"confidence":0.82,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"“Aged vehicles” are used cars that have been sitting in inventory for a long time. Retailers may hold them at higher prices if they believe the market will eventually catch up, but that can increase carrying costs and reduce turnover.","simplifiedExplanation":"This means cars that have been on the lot for a while. If a dealer thinks prices will rise later, they may wait instead of dropping the price quickly."}},{"startTime":1514.8,"endTime":1525.4,"type":"concept","title":"dealer auctions","url":"/glossary/dealer-auctions","quote":"...the sales through rate over at the dealer auctions... This is higher than normal, significantly higher than normal.","canonicalId":"concept:dealer-auctions","priority":0.5,"confidence":0.88,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Dealer auctions are wholesale marketplaces where licensed dealers bid on used vehicles. Retailers like CarMax often rely on these channels to source inventory, so auction conditions can directly affect their costs and pricing.","simplifiedExplanation":"Dealer auctions are like wholesale car markets where dealers bid on used cars. If dealers are competing hard, the prices they pay can go up."}},{"startTime":1535.2,"endTime":1539.8,"type":"concept","title":"overpaying at the auction","url":"/glossary/overpaying-at-the-auction","quote":"The dealers are overpaying at the auction. CarMax is overpaying to buy cars.","canonicalId":"concept:overpaying-at-the-auction","priority":0.5,"confidence":0.86,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"When dealers overpay at auctions, their acquisition costs rise, which can squeeze profits unless they can sell cars at higher retail prices. It can also indicate dealers are worried about inventory shortages or future price increases.","simplifiedExplanation":"Overpaying means dealers are paying more than they normally would for cars at auction. That can be risky, but it can also happen when everyone is trying to buy the same limited supply."}},{"startTime":1543.9,"endTime":1557.4,"type":"company","title":"CarEdge","url":"/glossary/car-edge","quote":"This is going to be a brief plug, but a plug nonetheless. We have in the new beta experience, caredge.com slash beta, but what's my car worth?","canonicalId":"company:caredge","priority":0.5,"confidence":0.9,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"CarEdge is the podcast/company promoting a valuation tool that estimates what a vehicle is worth. The segment frames it as a way for listeners to check current resale value amid strong used-car demand.","simplifiedExplanation":"CarEdge is promoting a website tool that helps you estimate your car’s value. The idea is to see what buyers might pay right now."}},{"startTime":1729.6,"endTime":1732.8,"type":"brand","title":"Ford","url":"/glossary/ford","quote":"And yeah, now the CEO of Ford saying, don't do that. [1732.8s] Fascinating.","canonicalId":"brand:ford","priority":0.9,"confidence":0.95,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"Ford is referenced through its CEO, Jim Farley, who is described as saying not to allow Chinese competition in a way that would undercut the U.S. auto industry. This matters because Ford is one of the “Big Three” automakers influencing policy and market strategy.","simplifiedExplanation":"Ford is one of the major U.S. car companies. In this discussion, Ford’s leadership is pushing back on letting Chinese cars in without protections."}},{"startTime":1787.4,"endTime":1798.0,"type":"concept","title":"protect the American car industry","url":"/glossary/protect-the-american-car-industry","quote":"But yeah, I can't see the government going, yeah, we don't want to [1798.0s] protect the American car industry.","canonicalId":"concept:protect-the-american-car-industry","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"“Protect the American car industry” refers to government actions like import restrictions, tariffs, or local-content rules intended to shield domestic automakers from cheaper foreign competition. The segment argues that such protection is unlikely to be removed quickly.","simplifiedExplanation":"This is about the government stepping in to help U.S. car companies compete. The idea is that protections make it harder for cheaper imports to take over the market overnight."}},{"startTime":1808.4,"endTime":1810.87,"type":"concept","title":"What we lose on each vehicle will make up in volume","url":"/glossary/what-we-lose-on-each-vehicle-will-make-up-in-volume","quote":"We had a thoughtful contribution from Rich. Thank you for this, Rich. [1808.4s] What we lose on each vehicle will make up in volume.","canonicalId":"concept:what-we-lose-on-each-vehicle-will-make-up-in-volume","priority":0.5,"confidence":0.9,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"This is a pricing/retail strategy concept: accept a smaller profit (or even a loss) per unit and rely on selling more units to make overall profit. It’s often discussed in dealership and sales-channel contexts when trying to drive higher throughput.","simplifiedExplanation":"The idea is: make less money on each car, but sell a lot more cars so you still end up making money overall."}},{"startTime":1845.0,"endTime":1849.2,"type":"concept","title":"beta","url":"/glossary/beta","quote":"And again, we have the beta out there right now as well. We appreciate your feedback and your input, caredge.com and caredge.com slash beta.","canonicalId":"concept:beta","priority":0.5,"confidence":0.85,"source":"hybrid-fuzzy+gpt-5.4-nano","data":{"explanation":"A beta is an early, test version of a product released to a limited audience. The hosts are asking for feedback so they can improve it before a wider launch.","simplifiedExplanation":"A beta is a “test” version of a website or app. They’re letting people try it early and collecting feedback to make it better."}}],"speakers":[{"id":"s1","name":"Ray","role":"host"},{"id":"s2","name":"Zach Shefska","role":"host"},{"id":"s3","name":"Bleav","role":"host"}],"transcripts":[{"url":"http://getcarcurious.com/episodes/carmax-is-in-serious-trouble-worse-than-we-thought-episode-1051/transcript.vtt","type":"text/vtt"}]}