More broadly, high used-vehicle prices have posed some problems. Wholesale used-vehicle prices were up 45 percent through Sept. 19 compared with the end of 2020, according to J.D. Power. A microchip shortage has severely limited new-vehicle production, and consumers have been gravitating toward used vehicles amid strong demand and economic growth.
For CarMax, acquisition prices for retail vehicles were up about $6,000 year over year in its second quarter, and they were up about $3,000 for wholesale vehicles, Nash said. "As long as I've been doing this, those are the biggest jumps I can remember ever seeing," he added.
Nash said the company's high rate of "self-sufficiency," or the rate of retail vehicles it buys from customers, should help margins and pricing going forward.
CarMax bought 364,263 vehicles from consumers in its second quarter for a 59 percent increase over the year-earlier period. That made CarMax about 70 percent self-sufficient, Nash said.
About 188,000 of the vehicles were bought through the company's instant appraisal and cash-offer tool.
CarMax reported record net revenue of $7.99 billion in its second quarter, a rise of 49 percent. The company pointed to its omnichannel retail efforts, in particular its instant cash-offer tool, as a primary factor for its top-line success in the period.
Omnichannel retail refers to the ability to shop for items across multiple electronic devices or in person, while having the experience personalized and consistent. CarMax completed the rollout of its omnichannel retail platform during the year-earlier quarter and continues to fine-tune it.
Its instant cash-offer tool was a joint effort with Edmunds, which it acquired this year in a transaction valued at $404 million.
In CarMax's most recent quarter, net earnings fell 3.9 percent to $285.3 million. The retailer opened three stores during the period and was on track to open a total of 10 new locations in its current fiscal year.