Those customers flow down to the Tier 3 space. But I think it predominantly is, it’s affordability. Those higher end customers can buy and that’s why you see the percentage of sales are a little more skewed to the high end. I think there’s demand everywhere, but that’s really what’s driving it.
David Whiston: Okay. And could you just briefly give me some examples of what non-CAF uncollectable receivables are?
Enrique Mayor-Mora: Yes, so those are going to be, so this hits in the SG&A bucket, right? And these are going to be receivables that our finance partners originate and underwrite that end up having a title processing issue or a down payment challenge that we end up having to buy back. So that’s an area of focus for us. Over the past year, we’ve made material improvements, as I’ve talked about on previous quarters, both in execution in our stores, in our home office. The DMVs have also got better in terms of turning around those titles as well as the banks in terms of turning around the processing. So, we saw another quarter of benefit this quarter, we expect to see some more benefit in the back half of the year. Probably not as strong as the first half of the year as we start to lap over that accentuated focus last year that we had on making sure we’re managing those.
David Whiston: And I’m sorry; do you do a 100% of that servicing for the third party lenders in terms of the collection stuff?
Enrique Mayor-Mora: No, we do not. That’s, we do not underwrite it. That’s the third party partners that would underwrite it and then service it. That’s right.
David Whiston: All right. Thank you.
Operator: We do have another question from Michael Montani with Evercore ISI. Your line is open.
Michael Montani: Hey guys, thanks for letting me sneak one more in. I just wanted to ask about, if you could give any incremental color around the sales trends by income level and when you think about the improvements sequentially to the down 9 comp and then throughout the quarter, what are you seeing for upper income versus lower income consumers? And then how does that filter into your desire to spend into ad dollars for the back half of the year?
Bill Nash: Okay. Yes, so as I said earlier, I mean, we’re seeing the biggest pinch probably on the, not probably on the, we are seeing it on the lower consumer. And think about it, from a monthly household income of let’s say $3000 to $4,000 that had, that segment of sales for us has shrunk dramatically. So it’s probably in the last couple of years it’s down probably and it’s probably down about 50% in the $3,000 and less household incomes about 50% less than what it used to be. So that’s absolutely a headwind, which again speaks to the affordability. As far as advertising goes, that’s an area where Jim and Sarah and team, they constantly are looking at it. And I think an interesting thing that everybody needs to keep in mind is, because we’ve got this big buying engine also, when we talk about advertising, it’s advertising for sales, but it’s also advertising for buy.
So while you may pull back on sales, you may do more on buy. So it’s a walk that we do, and that team does a great job measuring the ROI. So to Enrique’s comments earlier, what we’re expecting to do in the back half, that certainly could shift if we see something in the marketplace that says, hey you don’t need to spend as much, it’s not fruitful or on the flip side, hey you may want to spend a little bit more and so we’re constantly monitoring that. But I think the guidance that Enrique gave is really the way to think about it and then we’ll continue to monitor it.
Michael Montani: Thank you.
Operator: Thank you. We don’t have any further questions at this time. I’ll hand the call back to Bill for any closing remarks.
Bill Nash: Great. Well, I thank you all for joining the call today and for your questions and your continued support. I do want to one more time congratulate the CarMax team on achieving our 30th anniversary and I just want to thank them for everything that they do every day to take care of each other and our customers and the communities and we will talk again next quarter. Thank you.
Operator: Thank you ladies and gentlemen. That concludes the second quarter fiscal year 2024 CarMax earnings release conference call. You may now disconnect.
