Chris Pierce: Okay. Appreciate it. Thank you.
Bill Nash: Thank you, Chris.
Operator: And we’ll take our next question from John Murphy with Bank of America. Your line is open. You may ask your question.
John Murphy: Good morning, guys. I just wanted to see if you could talk about sort of the split of the zero to six and the seven to 10-year-old vehicle sold in the quarter and maybe on a year-over-year basis. And as we think about this, unless there’s some massive economic boom that is not really expected, seems like through ‘24 and ‘25, the zero to six year old car population will continue to shrink, which is a supply issue for you guys, unless you shift a little bit more to the seven to 10-year-old bucket but also would help you out a lot on affordability. So it just seems like it could be a small strategy shift here that could alleviate some of the issues that we’re facing. Just curious if you could comment on that as well. So mix and then potentially pushing a little bit more to seven to 10s.
Bill Nash: Yes. So I think looking at the quarter, if I look at zero to four versus, let’s call it five plus, we were similar to last year. We were a little bit older than the third quarter. So I think our mix is — it’s interesting. It’s almost 50-50 when you look at zero to four and the five plus. When I look at zero to six maybe versus the seven plus, it’s — for last year, it’s very similar. Let’s call it a 70-30 split, zero to six-year-old 70%, seven-plus 30% for us. Last quarter was a little bit — and I made the remark last quarter that we had a little bit shift in some newer cars. So last quarter was a little bit more in the zero to six than this quarter. And I think, look, as we move forward, and I mentioned this earlier, you’re right, as far as new cars, a year or two year ago, weren’t as many new cars sold.
But again, I would just point to you’re still in the ballpark of 15-plus million SAAR run rate, which is much higher than what we saw coming out of the great financial crisis. And the other thing I would point to is that our self-sufficiency now for a couple of years on a yearly basis continues to be over 70%, which we didn’t have prior, and we think that’s a great tailwind. So for us, the supply hasn’t really been the issue, it’s the price. Now you could say, well, supply of just overall vehicles out there is causing price to go up, but our ability to acquire inventory has not been the issue. It’s more the price.
John Murphy: Got it. And then just one follow-up on the sourcing side that you just talked about. You said dealer sourcing was up 21,000 units, about 45% on a year-over-year basis in the quarter. Is that something you think could increase? I mean, I think there’s some concern that vehicles, late-model vehicles get caught further up funnel as openly, Manheim and ATB all kind of help with their virtual auctions to keep vehicles further up funnel. But it sounds like you actually kind of refute that with the increase in dealer sourcing. How much of an opportunity do you think dealer sourcing could be over time or maybe a risk as they hold on to more vehicles?
Bill Nash: Yes. Look, I’m pleased with the max offer. I mean we’re continuing to buy more vehicles to that. We think it’s a great product that’s really resonating with dealers. And when you look at the mix of vehicles we’re buying, it’s actually skewed more retail than wholesale, which is a huge benefit. I think it’s a very competitive product. And like I said, we’ve got a lot of dealers that are actively using it, and we plan to continue to push that. And when we talked about — we’ve historically talked about self-sufficiency. We’ve always talked about it from a standpoint of just the consumers. Well, it really should start adding in this bucket as well, which, again, just helps keep our self-sufficiency very high.
John Murphy: Great. Thank you very much.
Bill Nash: Thank you, John.
Operator: We’ll take our next question from David Bellinger with Mizuho. Your line is open. You may ask your question.
David Bellinger: Hey, thanks for the questions. Maybe just a follow-up on that last one and acquiring cars directly from consumers. Can you talk through just the quality of those vehicles? Are there any material differences versus those at the auction? And just overall, is there enough inventory out there from consumers in that $20,000 to $25,000 range right now? Or is that more of a limited opportunity?
Bill Nash: Yes. Actually, from a — I was encouraged because this quarter, if you look at our sales are less than 20% — or less than $20,000 vehicles, while year-over-year, it was similar. It actually was better than the third quarter. So we had more less than $20,000 cars. I think as far as what do the vehicles look like for consumers, buying vehicles from consumers is just a huge benefit. I mean you’re buying vehicles that people in that area generally like. And the reason why it’s important is to self-sufficiency is because those are more profitable than having to go off-site. And if you’re having to go and secure all your vehicles off-site, that’s an expensive channel to go through. And we have the luxury of having such a high self-sufficiency that we have to really kind of go out and obtain vehicles off-site on a limited basis.
David Bellinger: Got it. And if I could just follow-up one more on your quarter-to-date comment down mid-single digit. Is there anything that’s really changed to explain that shift from positive comps in February, maybe some of the tax refund flows that might have impacted, but also, is there potentially just some pause on the part of the consumer with steeper price depreciation lately? And if that’s the case, how long could that last?
Bill Nash: Yes. I think it just — it’s probably more just speaks to consumer. I think the consumer is still in a tough spot. The tax season — I think overall, the tax season this year has been a little softer, although refunds are higher, the actual — the refund dollar amounts are higher, the actual number of refunds is behind where it was last year. And while prices have gone down, obviously, interest rates are higher than a year ago. I think you still have the pressure of the consumers on everything else that they’re basically buying food and housing, get inflationary pressure there. So I think it speaks more to the consumer mindset at this point. And like I said, it’s been choppy. I mean there’s been a — we’ve had some weather things going on. It’s just — there’s been a lot going on. So we’ll continue to monitor and make adjustments as we can as we go through.
David Bellinger: Got it, thanks Bill.
Bill Nash: Okay, thank you, David.
Operator: And we’ll take our last question from David Whiston with Morningstar. Your line is open. You may ask your question.
David Whiston: Thanks. Good morning. Just a two-part question on affordability. You mentioned ASPs are continuing to fall, which is good. But are consumers even noticing the lower ASPs at this point? Are they entirely focused on unfavorable monthly payment due to interest rates? And also on that trading trade-offs scenario for affordability, is the consumer moving into cars away from light trucks? Or is it more just shifting into older than 5-year-old vehicles?
Bill Nash: Yes. Well, I think it’s always been about the monthly payment for the consumers. And the prices are coming down. And as Jon said, the actual monthly payment is coming down, but it’s still over $100 more than what it used to be. And so when a consumer is thinking about buying a car, let’s say they’re in a car right now. Well, they’re making a certain monthly payment. And all of a sudden, they look and say, okay, well, I’m ready to swap out. They’re like, oh my gosh, I’d have to pay another $100. That’s where we’re seeing it. And again, there’s lots of data points to say consumers are just waiting on the sidelines right now and either for the monthly payments to come down or to figure out a way to work it into their budget with all the other expenses. So I think that’s what you’re seeing. Was there another part of your question?
David Whiston: Yes. Are they also moving away from light trucks into cars? Or are they just focused on an older vehicle to try to…
Bill Nash: It’s interesting. If you look at the numbers for the quarter, from a class standpoint, we actually sold more like from a mix standpoint, more larger SUVs, more expensive type of cars. Now the average age, both of our wholesale and retail is up on what you’ve sold. But it’s not like they’re choosing to go compact versus larger SUV types, at least not for the quarter.
David Whiston: Okay. Are you worried about the off-lease shortage ramping up with the anniversary of the start of the chip shortage?
Bill Nash: Yes. Look, leased vehicles have never been a big piece of our inventory strategy. I mean — and we’ve been through cycles before where there’s been leased cars, and we’ve been through cycles where there haven’t been leased cars. I think we’ve been in a cycle where there really haven’t been leased cars because a lot of the manufacturers are requiring lease customers to take it back to the franchise dealer. We have customers wanting to sell it to lease vehicle, and we can’t buy them because of those restrictions. And quite honestly, it’s — I think it’s been a nice benefit for the franchise dealers, because they’re able to get these things at a good rate base off of leases that were basically done a while ago. That will play out and not become such a benefit as we go into the future. But it just hasn’t been a big source of inventory for us historically.
David Whiston: Okay, thank you.
Bill Nash: 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, listen, I want to thank everybody for joining the call today. Obviously, we’ve got lots going on. And we appreciate your questions and your support. Before I close, again, I just want to congratulate all of our associates for being named as a Great Place to Work for the 20th year in a row. We’re all very proud of that and really speaks to our folks and the culture that they’ve really enhanced here and implemented here at CarMax. So thanks for your time today, and we’ll talk again next quarter.
Operator: Thank you. Ladies and gentlemen, that concludes the Q4 fiscal year 2024 CarMax earnings release conference call. You may now disconnect.
