Of course, it’s one thing to continue to sell cars during a pandemic. It’s quite another for customers to be able to pay for them as millions of Americans lose their jobs.
CarMax Auto Finance, the company’s in-house financing arm with $13 billion in average managed receivables, has been providing payment assistance for customers struggling to make payments and waiving late fees on payments due in March and April.
CarMax also extended its 90-day limited warranty, effective March 16. The extension effectively freezes the 90-day countdown for any vehicle purchased after Dec. 17, 2019.
Carvana announced April 6 that it would give customers up to 90 days to make their first payment.
The company declined through a spokeswoman to provide more details about how its business is being affected by the pandemic. It most certainly has taken a hit, as total used-vehicle sales are expected to be down double digits nationwide.
On March 30, Carvana announced an offering of 13.3 million shares of Class A common stock to existing investors, with each share priced at $45.
The offering included investments of $25 million from CEO Ernie Garcia III and $25 million from his father, Ernie Garcia II, a controlling shareholder. The offering raised $600 million from investors.
On March 24, the company announced Ally Financial would provide $2 billion of capacity for the purchase of finance receivables during the next 12 months. The company previously had a $1 billion credit facility with Ally that expired in April.
Carvana is set to report its first-quarter results May 6. CarMax reported record sales and earnings in its fiscal fourth quarter and full year, ending Feb. 29. But Nash noted in an earnings call this month that, while momentum carried into January and February, March had been “the most volatile month I’ve ever seen.”
