Brandon's "Build Back Better" just keeps getting worse and worse. Can
we survive two more years of FJB?
High prices and rising interest rates are putting used cars out of reach
for a growing number of car shoppers.
That’s bad news for CarMax, the nation’s largest used car dealer. CarMax
reported Thursday that its earnings plunged 54% as the number of cars it
sold in the quarter fell 6.4% compared to a year ago.
The company blamed “vehicle affordability challenges that stem from
widespread inflationary pressures, as well as climbing interest rates
and low consumer confidence.”
Although higher prices lifted the company’s overall revenue, the results
were well below forecasts from analysts surveyed by Refinitiv. That set
off alarm bells for investors. CarMax (KMX) shares plunged more than 24%
Thursday, and other car retailers’ stocks were also hammered. Shares of
used car rival Carvana (CVNA) fell about 23% and AutoNation (AN), the
nation’s largest new car dealer, fell 10%. Shares of many automakers,
including General Motor (GM)s, Ford (F), Stellantis and Tesla (TSLA),
were also lower.
Car prices have been climbing steadily for the last two years, as a
shortage of parts, particularly computer chips, has limited supply in
the face of strong consumer demand. Those higher prices have been a
major factor in overall inflationary pressures since roughly 40% of US
households buy a car each year.
The effort to curb prices has prompted the Federal Reserve to raise
interest rates at an historic pace in recent months as the central bank
tries to ease consumer demand and slow the economy.
Americans are borrowing at record levels to pay for their expensive cars
Used car prices — although down 2% in August from the record high
reached in January — are still up 48% from August 2019, according he
Consumer Price Index, a key inflation measure. New car prices hit a
record in August, up 30% over the last three years.
CarMax reported an average per vehicle sale price of $28,657 in the
three months ending in August, up 9.6% from a year earlier, but down 1%
from the previous quarter.
But it’s not just the cost of buying and financing a car that was a drag
on sales, according to CarMax executives. The overall pressures on
household budgets from higher prices across the board has become an issue.
“Groceries are higher than ever,” said CarMax CEO William Nash on a call
with investors. “Consumer confidence, certainly during the quarter,
all-time low as far as recent history, I mean even lower than the height
of the pandemic. So I just think consumers are prioritizing their spend
a little differently.”
The company’s results were also hurt because of increased reserves to
cover potential loan losses at its finance arm. CarMax more than doubled
the $35.5 million it held in reserve a year ago to $75.5 million at the
end of the most recent quarter.
"Build Back Better means Destroy More Quickly."
"Title 8, U.S.C. § 1324(a) defines several distinct offenses related to
aliens. Subsection 1324(a)(1)(i)-(v) prohibits alien smuggling, domestic
transportation of unauthorized aliens, concealing or harboring
unauthorized aliens, encouraging or inducing unauthorized aliens to
enter the United States, and engaging in a conspiracy or aiding and
abetting any of the preceding acts. Subsection 1324(a)(2) prohibits
bringing or attempting to bring unauthorized aliens to the United States
in any manner whatsoever, even at a designated port of entry. Subsection
"We have put together, I think, the most extensive and inclusive voter
fraud organization in the history of American politics." -Joe Biden
"C'mon man! If you didn't vote for me , you ain't black ." Joe Biden -