A user on TikTok has sparked discussion after claiming car company CarMax is in “big trouble” after observing one of their lots.
In a video with over 3.1 million views as of Sunday, car dealer and TikTok user @thankucheese walks through a CarMax lot. Many of the cars are marked as repossessed.
“CarMax definitely is in trouble,” the TikToker says. “The amount of people that are defaulting on their loans is crazy.”
As the video progresses, he notes the many cars present in the lot with “repo” stickers. The reason, he says, is CarMax’s financing policies.
“The crazy thing about it is CarMax used to not be known as, like, a subprime lender, but now they are,” he states. “They literally approve anybody with a work history.”
“You don’t even need work history to get approved with CarMax, which is crazy. You can literally lie in your application. A lot of people do that,” he adds later in the video. “It used to be like when you come to CarMax, it would just be a bunch of trade-ins, but you don’t even see those now. It’s all repos.”
As noted by Yahoo! Finance, car repossessions appear to be up, and not just with CarMax.
“A recent study by Fitch Ratings found that more subprime borrowers were 60 days or more behind on their car payments than at any other time on record,” author David Nadelle wrote in December 2023. “After a couple of down years, vehicle repossessions are up by 20.4%, according to Cox Automotive.”
However, many users questioned the claims that the TikToker made in his video.
“I don’t think Carmax is at a loss. That’s their business model,” said a user.
“It’s not Carmax,” added another. “It’s the banks they use to approve people. Interest rate be 25%.”
“In trouble how? They gon’ just sell again,” explained a third.
Furthermore, while the TikToker says that “you don’t even need work history to get approved with CarMax,” the company’s website notes that buyers may be asked to provide proof of income, which can take the form of pay stubs or bank statements, amongst other options.
@thankucheese Carmax is taking major losses right now. But looking for repos for my clients on my bday, gotta start the year right.. #carmax #auction #dealer #wholesale #reposessions #repo #default #market #fail #camaro #nissan #cars #fyp #viral #fy #trending ♬ Oh No – Kreepa
That said, many users lamented the current state of the car market.
“Car market crash coming soon,” declared a user. “Can’t wait to scoop up a 2020 car for like 8k lol.”
“Cars shouldn’t cost so much to begin with,” wrote a second. “It makes no sense what we have to go through for the basic necessities.”
The Daily Dot reached out to CarMax via email and the TikToker via Instagram direct message.
Update 12:59pm CT Feb. 28: In an email to the Daily Dot, CarMax shared its financing policy.
“CarMax’s financing process is based on our core values of transparency and integrity,” a spokesperson said. “Every retail vehicle that CarMax sells is eligible for financing with CarMax. Our finance program accommodates customers across a wide range of the credit spectrum through both CarMax Auto Finance (CAF) and third-party providers. CarMax customers can review each of their finance offers and select the one that best suits their needs. All finance offers, whether from CAF or our third-party providers, are backed by a three-day payoff option, which allows customers to find financing with another provider within three business days at no charge.”
“Last year, CarMax launched an online financing experience that empowers customers with the ability to pre-qualify and shop CarMax vehicles nationwide with personalized financing terms on cars across our inventory,” they continued. “This multi-lender pre-qualification product gives customers the ability to digitally receive quick credit decisions across our inventory via our simple online pre-qualification request, with no impact to credit scores. Customers quickly and easily know what they can afford from the beginning of their journey and feel confident they are on track to find the right car that fits both their needs and budget.”
They concluded, “CarMax Auto Finance understands that our valued customers will at times experience financial hardship, and we work hard to support them. Whenever a financial hardship arises, CAF works with the customer to understand the situation and to determine whether a payment accommodation is appropriate. Payment accommodations may include a due date change or payment extensions.”
