carmax lot

Carmax corporate photo

published on July 8, 2024 - 2:04 PM
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Publicly-traded CarMax, a national used vehicle retailer, will open in Visalia in early 2025, according to a company spokesperson.

This is after breaking ground on a new dealership site west of Plaza Drive in May. The Virginia-based company has about 240 locations in the U.S., including in Fresno and Bakersfield.

There are also plans for CarMax to expand in Fresno.

A typical CarMax store is approximately 59,000 square feet and carries an inventory of 300–400 vehicles. It turns its inventory over eight to ten times a year. On average, a CarMax location employs 40 sales associates. Each car goes through a thorough 125-point inspection process, beyond any state-required inspections, and includes a 90-day warranty, three days to change the financing for free, and a 30-day money-back guarantee.

The company was founded by retailer Circuit City in 1981 — now outliving its electronic retail parent.

In Visalia, representatives of CarMax tried to convince the Visalia City Council in 2020 to allow them to locate one of their stores on Mooney Boulevard at the south end of town. But the council decided to keep the land available for traditional retailers. The location is where a potential Sam’s Club may now be built. At the time, some council members encouraged CarMax to look at the Plaza Drive auto district where several new car dealers were already located. Now they have taken their advice.

In 2022 the City Council opened the Visalia Auto Plaza area to used cars along with new car sales. CarMax then picked a 5.9-acre site adjacent to the other car dealerships, but has not moved forward until now likely because COVID has disrupted the sales economy for several years.

CarMax, like the entire used car industry, has faced financial pressure recently.

The company reported a 33% fall in first-quarter profit in late June, as lower margins from vehicles sold continued to impact the used-vehicle industry. CarMax reported a net income of $152.4 million, or 97 cents per share, in the quarter ended May 31, down from $228.3 million, or $1.44, per share a year ago.

The California New Car Dealers Association says the California used vehicle market fell by 2.3 percent during the first three months of this year versus a
year earlier. The new vehicle market improved by 0.7% during the same period.

The state’s used light vehicle market is expected to be flat in 2024 as tight supplies continue to hold back sales.

Pre-owned vehicle retailers are said to have had a bumpy ride with profitability worsening over the last few years as new vehicle availability improved with supply chain issues disappearing.

The City of Visalia will benefit from new sales at the dealership with automobile sales tax revenue being a significant source to the city’s budget.

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