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Welcome to the Market Pulse—your no-fluff cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.
Delinquencies are rising faster than expected: Both CarMax and Carvana loan pools are already showing 2–3x higher delinquency rates than prime benchmarks - unusual given their borrower scores should behave much closer to prime.
Repossessions are staying unusually low: Even as delinquencies climb, CarMax repos remain near 0.2%, while Carvana’s lenders are pushing even harder to keep loans alive via payment extensions.
And as a result, wholesale supply is tightening across the board: Off-lease volume is already low, and delayed repos + stretched trade-ins are making it worse. That means fewer cars are cycling back into lanes on time — and when they do, competition and prices at auction are even higher.
(Source: Finsight Auto ABS Loan Level Data / Fitch Ratings Auto ABS Data for Prime Index)
CarMax and Carvana’s 2024 loans are posting delinquencies 2–3x higher than prime benchmarks.
Recently, we dug into CarMax and Carvana’s 2024 auto loan pools to see just how consumers are holding up.
What we found: Delinquencies are climbing faster than normal, and loan modifications (lenders letting borrowers skip or extend payments) are piling up earlier than expected.
CDG analysis via Joe Cecala
CarMax’s 2024-1 pool (avg credit score 714) already has 30+ day delinquencies climbing toward 4.5%, up from under 1% at origination.
Similarly, Carvana’s 2024-P3 pool (avg score 695, 44% subprime) is deteriorating even faster, with 60+ day delinquencies doubling from 0.5% to 1% in under a year.
Both are now trending 2–3x higher than prime auto loan benchmarks, even though CarMax’s pool averages 714 and Carvana’s 695 — scores that should perform closer to prime.
Editor’s note: The cohort of borrowers Fitch tracks accounts for OEM captive finance programs, which tend to skew toward the most “premium” borrowers who qualify for low APR deals. This makes Carvana and CarMax’s delinquencies (which represent a broader spectrum of prime borrowers) appear more extreme by comparison. And despite elevated delinquencies from both companies, the ABS market continues to price their deals on normal terms, signaling that they view Carvana and CarMax’s loan pools as having an acceptable level of risk for their composition.
NOTE TO DEALERS:
This tells us competition for subprime volume is intensifying.
For dealers, now’s the time to:
Know where your lender partners stand. Some banks and captives may stay conservative, but credit unions and aggressive subprime lenders are likely to chase share. Build relationships accordingly.
And decide how much subprime risk you really want. Volume is tempting, but defaults and repo timing affect your inventory flow later. Stay disciplined about who you deliver.
Rising payment extensions and fewer repos are thinning wholesale supply and making auctions more competitive.
In CarMax’s 2024 pool, the share of loans modified with 2+ payment extensions has already jumped from under 0.1% to about 0.5% by mid-2025.
At the same time, repossessions have inched up from near 0% to about 0.2%, still very low compared to delinquency levels.
CDG analysis via Joe Cecala
Carvana’s pool shows the same pattern but more extreme.
With heavier subprime exposure, its lenders are leaning harder on payment extensions to keep loans alive, slowing the return of vehicles into the wholesale market.
What we know: Those moves limit immediate losses for lenders. But for dealers, it means fewer cars are cycling back into inventory — and when they do, it’s later than expected.
WHY IT MATTERS:
Late-model, high-margin cars are already hitting lots in smaller volumes. Auctions are heating up as everyone chases fewer units. And trade-ins are taking longer to cycle back, slowing inventory turns.
That means the focus should be on:
Leaning harder on consumer sourcing — instant cash offers + appraisals that lock in cars before they ever hit the lanes.
And reconditioning + pricing to market within 72 hours, so the cars you do land are generating margin instead of sitting.
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Last week, CarMax lost nearly 20% of its value in a single day. And as Brandon Hale, executive GM of Audi Fletcher Jones, put it: “It wasn’t a glitch. It was a warning.”
“Unit sales are falling. Loan losses are climbing. And the short-term used-car market looks weaker than most dealers want to admit.”
Brandon Hale
Industry folks were quick to chime in. So this week’s Do’s and Don’ts are built around what that selloff really signals for dealers on the ground.
Do: Track how affordability is reshaping the buyer pool
Some operators think CarMax’s stumble says more about macro pressure than its playbook.
“Even the best acquisition playbook can’t offset the fact that higher monthly payments are shrinking the buyer pool. The dealers that will hold ground are the ones adapting both sides of the equation: sourcing smarter and keeping customers in the funnel through retention and affordability tools,” Hale said.
Do: Balance sourcing, recon, and lead-gen tactics
Operators leaning on inventory discipline, recon, and multiple lead-gen tools are holding steadier through market shocks.
“CarMax’s drop is definitely a wake-up call, but I think it highlights a bigger divide in the industry. Dealers with disciplined inventory management, strong reconditioning processes, and diversified lead-generation tools (like Automotive Mastermind, vAuto, and digital retail platforms) are in a better position to weather short-term shocks,” Tom Gilbert, GM of Lexus of Kendall, said.
Tom Gilbert
Don’t: Offer inconsistent appraisals
Operators are pointing out big swings in CarMax’s valuations, creating opportunities for competitors.
“Most recently, however, the inconsistency of their appraisals is a huge red flag in my opinion. One day they’re $4k over MMR, 48 hours later they’re way under MMR. I think this tells us something about what might be happening internally. I don’t think they know what’s going on,” wrote Alex Perdikis, CEO/Owner at Koons Motors, Inc.
Alex Perdikis
His point: Consistency builds trust with consumers and repeat sellers — volatility hands business to rivals.
I've been saying it all year - auctions are a great supplement, but they should not be your sole lifeline.
Carvana and CarMax’s loan mess just confirms it. Wholesale is tighter, auction cars are pricier, and the margin left when you buy under the lights keeps shrinking.
That’s why operators winning right now aren’t waiting on the lane. They’re locking trades, pushing instant offers, and keeping customers from ever shopping around.
This isn’t franchise vs. independent. It’s dealers who own their sourcing…vs. dealers who let the market own them.
What % should auction make of your sourcing right now?
Three opportunities hitting the CDG Job Board right now:
Lenz Truck Center: Finance Manager (Fond du Lac, Wisconsin)
Mount Pleasant CDJR: Finance Manager (Charleston, South Carolina)
Glenbrook CDJR: Pre-Owned Manager (Fort Wayne, Indiana)
Looking to hire? Add your roles today—it’s 100% free.
