CarMax (KMX): Routing 100% of customer calls to AI [Q2 2027]

CarMax squeezed its own retail margins to drive Q2 volume, heavily relying on massive AI efficiency and an expansion into sub-prime auto lending to catch the financial shortfall.

In ~10 minutes:

- How the FTC inadvertently doubled CarMax's "great deals" online.

- Why slashing profit per vehicle drove a 14% volume spike.

- Replacing 100% of inbound phone operators with AI agents.

- Aggressively capturing Tier 2 sub-prime loan share from banks.

Deliberately cutting the gross profit per unit sounds dangerous in traditional auto retail, but CarMax’s aggressive bet on sheer volume paid off nicely this quarter. We explore how management is actively leaning on new cosmetic warranty add-ons and a booming off-balance-sheet securitization machine to shield the bottom line. 🚘

CarMax, Inc. (KMX) | Q2 FY2027

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