8 Best Car Repair Stocks to Invest In

1. CarMax, Inc. (NYSE:KMX)

Number of Hedge Fund Holders: 44

CarMax, Inc. (NYSE:KMX) is a major retailer of used cars in the United States, operating primarily through two main areas namely CarMax Sales Operations and CarMax Auto Finance (CAF). While it is renowned for its buying and selling of used cars, the company also sells additional products such as warranties and vehicle repair services.

During the fiscal third quarter of 2025, the company witnessed year-over-year increases in the number of cars sold both at retail and wholesale levels, indicating a robust demand for used vehicles despite some challenges in the market. Its total retail used vehicles sold increased by 5.4%, whereas wholesale vehicle units sold increased by 6.3% year-over-year. Although there was a decline in average selling prices, which dropped by about $1,100 per vehicle, approximately 4% year-over-year. CarMax, Inc. (NYSE:KMX) managed to maintain strong profit margins. Management noted an improvement of $10 million in service gross profit, which led its total gross profit to $677.6 million, up 10.6% versus last year’s third quarter.

Looking ahead, management is focusing on growing its operations digitally. During the third quarter around 15% of the total retail units were sold through its omnichannel, with digital transactions making 32% of the net revenue. It is the best car repair stock to invest in.

Madison Mid Cap Fund stated the following regarding CarMax, Inc. (NYSE:KMX) in its Q3 2024 investor letter:

“We trimmed our positions in Moelis and CarMax. We reduced our position in CarMax, Inc. (NYSE:KMX) coincident with our addition of the two automotive retailers. While we are positive on CarMax’s prospects, we want to ensure we manage our portfolio’s overall exposure to the new and used car markets.”

While we acknowledge the potential of CarMax, Inc. (NYSE:KMX) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KMX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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