RICHMOND, Va.–As credit unions and their members are well aware, the price of both new and used vehicles has hit the accelerator. Now, CarMax said it is going back to basics heading into 2026, with short-term plans to cut prices and margins, boost marketing and move the metal.
“Our average selling prices have drifted upward and appear to be less attractive to customers,” David McCreight, interim president and CEO, said during the Q&A portion of an earnings call, according to Ward’s Auto Dealer.
Cutting average selling price is key to CarMax’s ambition to increase unit sales, but that doesn’t mean cutting all prices across the board by the same amount, added Interim Executive Chair Tom Folliard.
“When we say we’re at a lower price by $100 or $200, it doesn’t mean we’re taking $100 across the board on cars,” Folliard said, according to Ward’s. “It‘s more like if we say $100, a percentage of our cars is $1,000. Or 5% of our cars are $500. So, it does meaningfully impact the trajectory of sales because of the way we execute price changes.”
‘Getting Things Turned Around’
Folliard added the company’s “near-term priority is to get things turned around and get sales moving in the other direction.”
At the same time, CarMax is balancing some cost cuts with increased spend in other areas, like marketing, according to Ward’s Auto Dealer.
“To ensure that CarMax is a preferred choice, we will work to shrink the gap between our offering and the marketplace,” McCreight was quoted as saying. “We are lowering margins and supporting this action with marketing spend, while also building out more effective ways to communicate our value to the consumer.”
Despite increasing marketing spend, he said CarMax is cutting costs overall, with a goal of cutting selling, general and administrative expenses by $150 million per year, according to Ward’s.
