Many of you will have heard how second hand cars were one of the great drivers behind the initial surge in inflation. At the time it was a lack of component parts that was restricting the production of new cars which in turn pushed up the value of second hand cars. This was particularly the case in USA.
It comes as no surprise that USA’s largest second hand car dealer, CarMax, saw its sales jump 68% in the year to February 2022. Behind that growth lies a strategically organised sales process that combines direct and on-line sales aligned with a trusted brand of honest, no-nonsense fair pricing. As well as buying cars, CarMax will sell you a car and then service it as well as providing you with finance. Finance drives half of the company’s profitability. This is a cyclical business. The main risk is interest rate policy error to the extent that higher rates deter spending and make car finance too expensive.