CarMax’s Online Portal Helps Push Origination Growth

CarMax Auto Finance grew auto originations 7% in the first quarter, compared with the same time a year prior. The rise was due, in part, to growth in its online pre-qualified financing portal, President and Chief Executive Bill Nash said during the company’s earnings call yesterday.

The online portal has been in place for two full quarters at all CarMax retail outlets and the retailer is pushing to do a national advertising campaign.

“Customers are engaging well with this offering and it continues to contribute to increased [online] leads, which we believe ultimately generate incremental sales,” Nash said. “Now, we’re focused on improving the experience and proactively marketing our online financing capability nationwide.”

Although the portal helps speed up the financing process, consumers still need to go into a CarMax dealership to complete their online financing deal. However, the company is testing a fully-digital, home delivery program in one market today and is “looking to improve that experience,” Nash said on the call.

The used-car retailer’s finance arm originated $1.5 billion during the fiscal period ending in May, compared with $1.4 billion during the same period the year prior.

Total auto finance balances were not disclosed in the earnings, but the company held $10.3 billion outstanding at the end of 2016, according to the Big Wheels Auto Finance Report.  

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