With media outlets ranging from the Chicago Tribune to CBS News highlighting the struggles and bankruptcies of auto dealers this week, auto retailer CarMax impressed Wall Street yesterday by posting a 72% increase in profit that handily beat analyst estimates - despite a decline in its sales figures.
How is CarMax enjoying this type of relative success? Well, the Wall Street Journal cites CarMax’s “no-haggle policy” as a key differentiator that analysts believe will continue to help buoy the auto retailer during the recession as consumers seek the path of least resistance for deals. Which raises the question: Should traditional dealerships also follow suit?
Meanwhile, the dealer community also got good news this week from GMAC which, according to the AP, “…will temporarily waive some dealer fees and make $5 billion available for loans to an expanded pool of potential car buyers in a bid to halt the extended slide in U.S. vehicle sales.” In short, GMAC is re-opening financing to some subprime applicants.
Tim Higgins at the Detroit Free Press has more details on this development here.