CarMax 2003 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2003 CarMax annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 52

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52

CARMAX 2003 5
Non-Commodity
■Unlike new cars or toys or computers, every used car is unique. It has been driven differently, its condition is
different and its mileage is different.
■These differences provide CarMax the opportunity to add value.
■We carefully select the vehicles we intend to sell at retail.
■We thoroughly recondition every retail vehicle to a consistent, high quality standard.
■We stand behind our vehicles’ quality with a five-day money-back guarantee, a 30-day warranty and extended
service plans we sell that can extend coverage up to six years.
Fragmented Competition
■There is no dominant retailer of used cars.
■We estimate that 65% of late-model—one- to six-year-old—vehicles are sold by
the 21,800 new car dealers in the United States.
■New car dealers’ primary business is new cars; their secondary business is likely to
be financing or service; thus used car retailing often gets the least attention.
■The 54,000 independent used car dealers predominantly sell older, higher mileage
cars than does CarMax.
These are great competitive conditions for CarMax.
Consumer Need
■Our consumer research confirms what many suspect: generally, the consumer does
not like the traditional car-buying process.
■For more than 20 years,“car salesmen” have consistently been in the bottom position
on Gallup poll results that rank professions for honesty and ethics.
■The CarMax consumer offer provides a welcome alternative to the high-pressure,
traditional sales tactics that consumers associate with car buying.