CarMax says tariff fears juiced used car demand in April
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Car shoppers might be feeling more pessimistic about the economy, but they're still pulling the trigger on used vehicle purchases.
Why it matters: Investors and policy makers are still trying to get a handle on how tariffs are impacting consumer behavior.
Driving the news: CarMax reported Friday that it sold 9% more used vehicles to retail customers in the most recent quarter than it did a year earlier, leading to a 7.5% rise in retail revenue.
- Tariffs may have played a part. CEO William Nash noted a demand uptick correlated to tariff speculation, with April coming in as the strongest month in the company's quarter — but stressed the business was already growing before that.
Between the lines: Nash acknowledged that car shoppers are worried about price hikes and the resumption of federal student loan obligations. About 30% of the company's customers have student loans.
- "But I don't think it's necessarily showed up so much in the buying habits at this point," he said in terms of pricing.
CarMax shares closed up 6.6% Friday on the report.
Zoom out: Industrywide, wholesale used vehicle prices — the cars sold to other dealers — rose 1.7% from May through the first half of June, according to Cox Automotive's Manheim Used Vehicle Index.
- "All major market segments saw positive year-over-year results for seasonally adjusted prices in the first half of June," Manheim reported.
The bottom line: Tariffs haven't warped the used car economy ... at least not yet.
(Disclosure: Cox Automotive is owned by Cox Enterprises, which also owns Axios.)
