CarMax - Q4 2024
April 11, 2024
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by. Welcome to the Q4 fiscal year 2024 CarMax earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Lowenstein, VP Investor Relations. Please go ahead.
David Lowenstein (VP of Investor Relations)
Thank you, Shelby. Good morning, everyone. Thank you for joining our fiscal 2024 fourth quarter earnings conference call. I'm here today with Bill Nash, our President and CEO, Enrique Mayor-Mora, our Executive Vice President and CFO, and Jon Daniels, our Senior Vice President, CarMax Auto Finance Operations. Let me remind you, our statements today that are not statements of historical fact, including statements regarding the company's future business plans, prospects, and financial performance, are forward-looking statements we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our current knowledge, expectations, and assumptions, and are subject to substantial risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, we disclaim any intent or obligation to update them.
For additional information on important factors that could affect these expectations, please see our Form 8-K filed with the SEC this morning and our annual report on Form 10-K for the fiscal year ended February 28, 2023, previously filed with the SEC. Should you have any follow-up questions after the call, please feel free to contact our Investor Relations Department at 804-747-0422, extension 7865. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-ups. Bill?
Bill Nash (President and CEO)
Great. Thank you, David. Good morning, everyone, and thanks for joining us. We're encouraged by the performance of our business during the fourth quarter. We're continuing to leverage our strongest assets: our associates, capabilities, experience, and culture to build momentum as we manage through the cycle. While affordability of used cars remains a challenge for consumers, pricing improved during the quarter. We continue to achieve efficiency improvements in our core operations and believe we are well-positioned to drive growth as the market turns. In the fourth quarter, we posted our fifth consecutive quarter of sequential year-over-year retail used unit improvement and reported growth in total used unit sales and comps. We delivered strong retail and wholesale GPUs. We increased used saleable inventory units more than 10% while holding used total inventory units flat year-over-year.
We continued to actively manage our SG&A, and we grew CAF income significantly as we delivered a substantial reduction in the provision for loan losses year-over-year while maintaining stable net interest margin sequentially. For the fourth quarter of FY24, our diversified business model delivered total sales of $5.6 billion, down 2% compared to last year. This was driven by lower retail and wholesale prices and lower wholesale volume, partially offset by higher retail volume. In our retail business, total unit sales increased 1.3%, and used unit comps were up 0.1%. Average selling price declined approximately $600 per unit, or 2% year-over-year. Our market share data indicates that our nationwide share of 0 to 10-year-old used vehicles declined from 4% in calendar 2022 to 3.7% in 2023 as we prioritize profitability over near-term market share growth. As always, we continue to test price elasticity to validate our decisions.
External title data shows that our market share initially accelerated relative to our performance across the second half of 2022, but then came under pressure during multiple periods of steep depreciation. We remain confident in our ability to accelerate market share growth as used vehicle affordability continues to improve and as the volatility of vehicle value stabilizes. Fourth quarter retail gross profit per used unit was $2,251, relatively consistent with last year's fourth quarter record of $2,277. Wholesale unit sales were down 4% versus the fourth quarter last year. Average selling prices declined approximately $250 per unit, or 3% year-over-year. Fourth quarter wholesale gross profit per unit was $1,120, slightly down from $1,187 a year ago. As a reminder, last year's fourth quarter wholesale GPU was within $4 of our all-time record and benefited from appreciation and strong dealer demand, particularly at the end of last year's quarter.
This prior year appreciation dynamic impacted our year-over-year performance in buys as well. We bought approximately 234,000 vehicles during the quarter, down 11% from last year. Of these vehicles, we purchased approximately 213,000 from consumers, with slightly more than half of those buys coming through our online instant appraisal experience. With the support of our Edmunds sales team, we sourced the remaining approximately 21,000 vehicles through dealers, up 45% from last year. For our fourth quarter online metrics, approximately 14% of retail unit sales were online, consistent with last year. Approximately 55% of retail unit sales were omni sales this quarter, up from 52% in the prior year. All of our fourth quarter wholesale auctions and sales were virtual and are considered online transactions. This represents 17% of total revenue. Total revenue from online transactions was approximately 30% in line with last year.
CarMax Auto Finance, or CAF, delivered income of $147 million, up 19% from $124 million during the same period last year. Jon will provide more detail on consumer financing, the loan loss provision, and CAF contribution in a few minutes, but at this point, I'd like to turn the call over to Enrique, who will provide more information on our fourth quarter financial performance. Enrique?
Enrique Mayor-Mora (EVP and CFO)
Thanks, Bill, and good morning, everyone. As Bill noted, we drove another quarter of sequential improvement in our used unit sales with strong per unit margins for both used and wholesale, and strong CAF contribution growth while staying focused on managing SG&A. Fourth quarter net earnings per diluted share was $0.32 versus $0.44 a year ago. Last year's quarter benefited from an $0.08 tailwind due to the receipt of extended protection plan, or EPP, profit-sharing revenues, as well as $0.04 from a lower tax rate compared to a more normalized tax rate this quarter. Total gross profit was $586 million, down 4% from last year's fourth quarter. Used retail margin of $387 million was flat, with higher volume partially offset by a slightly lower per unit margin. Wholesale vehicle margin decreased by 9% to $129 million, with a decrease in volume and per unit margin compared to last year.
Other gross profit was $69 million, down 15% from a year ago. This decrease was driven primarily by last year's receipt of $16 million in profit-sharing revenues from our EPP partners. As noted on our third quarter call, we did not expect to receive profit-sharing revenues this year as our partners experienced inflationary pressures and consumers returned to more normalized driving patterns. Partially offsetting this dynamic was the positive impact from price elasticity testing on our extended service product. During the quarter, we tested raising MaxCare margins per contract sold, which resulted in a slight decrease in product penetration while driving overall profitability. We are encouraged by these results, and we have rolled out the margin increase nationally. Our expectation is that this action will drive approximately $20 per retail unit of incremental EPP margin in FY25. Service decreased by $4 million as compared to last year's fourth quarter.
This decrease was primarily driven by wage pressures and planned lower production in the quarter as we pre-built inventory in the third quarter due to holiday timing. For the full year, service improved by $75 million year-over-year. Our expectation is that we will continue to see significant year-over-year favorability in FY25. The extent of this improvement will be governed by sales performance given the leveraged/de-leveraged nature of service. Third-party finance fees were down $3 million from a year ago, driven by higher volume in Tier 3, for which we pay a fee, and lower volume in tier 2, for which we receive a fee. On the SG&A front, expenses for the fourth quarter were $581 million, up 1% from the prior year's quarter. Our continued discipline in spend and investment levels allowed us to come in flat year-over-year when excluding share-based compensation.
As a reminder, in the fourth quarter, we passed the year mark since initiating our significant cost management efforts. SG&A dollars for the fourth quarter versus last year were mainly impacted by three factors. First, other overhead decreased by $16 million. This decrease was driven primarily from reductions in spend for our technology platforms and from the continued favorability in non-CAF uncollectible receivables. Second, total compensation and benefits increased by $7 million, excluding an $8 million increase in share-based compensation. This increase was mostly driven by a higher corporate bonus accrual in the quarter. Third, advertising increased by $5 million. This reflects an increase, as communicated last quarter, due primarily to the timing of per unit spend.
For full year FY24, we strongly outperformed the target we set out at the beginning of the year of requiring low single-digit gross profit growth to lever SG&A, even when excluding the benefits from this year's legal settlements. Our ability to materially drive SG&A costs down year-over-year was led by favorability in non-CAF uncollectible receivables that reflects improved execution at our stores and our corporate offices and by external partners. Our focus on driving efficiency gains in our stores and CECs, the planned reduction of technology spend, and by aligning staffing levels and marketing spend to sales. In FY25, we expect to require low single-digit gross profit growth to lever SG&A when excluding FY24's favorable legal settlements. This reinforces our pathway back to a lower SG&A leverage ratio, with our initial goal of returning to the mid-70% range over time once we see healthier consumer demand.
We anticipate that SG&A will be pressured in the first quarter. As a reminder, we received $59 million in a legal settlement during the first quarter of FY24. Additionally, in this year's first quarter, we expect an approximately $25 million impact due to share-based compensation for certain retirement-eligible executives and the lapping of favorable reserve adjustments related to non-CAF uncollectible receivables during last year's first quarter. With regard to marketing, going forward, we plan to speak to our spend on a per total unit basis, inclusive of total retail and wholesale units. We believe this more holistically reflects the impact of our marketing initiatives, which support both vehicle sales and buys. In FY25, we expect full-year marketing spend on a total unit basis to be similar to FY24 at approximately $200. Regarding capital structure, during the quarter, we repurchased approximately 686,000 shares for a total spend of $49 million.
Starting in the first quarter, we intend to modestly accelerate the pace of our share repurchases above the pace that we implemented in our third quarter of fiscal year 2024. As of the end of the quarter, we had $2.36 billion of repurchase authorization remaining. For capital expenditures, we anticipate an investment level between $500-$550 million, up from the $465 million in FY 2024. The year-over-year increase in planned spending is primarily related to the timing of spend for new stores. Like in FY 2024, the largest portion of our CAPEX investment remains related to the land and the build-out of facilities for long-term growth capacity and offsite reconditioning and auctions. In FY 2025, we plan to open five new store locations. Consistent with our strategy, these new locations will be smaller cross-functional stores that complement our omnichannel strategy and leverage our scale.
We also plan to open our second standalone reconditioning facility, which will be located in Richland, Mississippi, as well as one offsite auction location in the Los Angeles metro market. We currently expect to open multiple offsite reconditioning and auction locations in FY26. Our extensive nationwide footprint and logistics network continue to be a competitive advantage for CarMax. Now I'd like to turn the call over to Jon.
Jon Daniels (SVP)
Thanks, Enrique, and good morning, everyone. During the fourth quarter, CarMax Auto Finance originated approximately $1.8 billion, resulting in sales penetration of 42.3% net of three-day payoffs, which was down 240 basis points from the same period last year. The weighted average contract rate charged to new customers grew to 11.5%, an increase of 60 basis points from the last year's fourth quarter and 20 basis points sequentially. Tier 2 penetration in the quarter was 18.6%, down from 19.4% observed during last year's fourth quarter. Tier 3 accounted for 8.2% of sales, up 130 basis points from last year as a partner began to ease previously implemented tightening. Also impacting each of these year-over-year results is CAF's continued decreased percentage in Tier 3, as well as the increased test volume in tier 2. CAF income for the quarter was $147 million, up $23 million from the same period last year.
This improvement was primarily driven by a $26 million year-over-year reduction in the provision for loan losses, slightly offset by a $3 million reduction in total interest margin. Note fair market value adjustments from our hedging strategy accounted for $4 million in expense this quarter versus $1 million of income in last year's fourth quarter. The $72 million provision within the quarter resulted in a reserve balance of $483 million, or 2.78% of receivables, compared to 2.92% at the end of the third quarter. This highlights the significant impact that originations under our tightened credit policy are having on the reserve as they continue to become a larger percentage of the full portfolio. In addition, observed performance within the portfolio aligned closely to our reserve expectations at the end of the third quarter and contributed to the reduction in the reserve.
The margin-to-receivable rate of the portfolio remained steady at 5.9% for the quarter. We remain pleased with our ability to maintain a stable interest margin despite keeping our credit tightening in place. As I noted earlier, CAF continues to test across varying parts of the credit spectrum. Ultimately, CAF is building the capability to scale its participation across all credit tiers, which will help to capture finance economics, drive sales, and fully complement our valued lending partnerships that are a key foundation of CarMax's best-in-class credit platform. Now I'll turn the call back over to Bill.
Bill Nash (President and CEO)
Thank you, Jon and Enrique. Fiscal 2024 was a challenging year across the used car industry as vehicle affordability and widespread macro factors continue to pressure sales. In response, we focused on what we could control and took deliberate steps to support our business both the near term and long run. In addition to achieving the efficiencies across our entire organization that Enrique talked about, I am proud of the progress we've made in further enhancing our omnichannel capabilities as we prioritize projects designed to optimize experiences for our associates and customers and drive operating efficiencies. Some examples include: for retail, we leverage data science, automation, and AI to make it even easier for customers to complete key transaction steps like vehicle transfers on their own.
We also enhanced digital checkout functionality for appraisal customers, enabling them to submit their documents remotely and unlocking their ability to participate in our 30-Minute Express Drop-Off experience. Additionally, we expanded capabilities for Sky, our 24/7 virtual assistant, to include managing finance applications, vehicle transfers, appointment reservations, and appraisal offers. Customer adoption of Sky has been strong, and this has not only created efficiencies but also widened bandwidth for our associates. For wholesale and vehicle acquisition, we modernized our auction platform to offer new services including single sign-on across all of our systems, AI-enhanced condition reports, early bidding capabilities, and automated bills of sale. Additionally, we streamlined MaxOffer by rolling out our Instant Offer experience to all participating dealers. In the credit space, we have now incorporated all of our lenders into our finance-based shopping platform, expanding the breadth and depth of offers available to our customers.
We continue to see great adoption with more than 80% of the consumers utilizing this best-in-class pre-qualification product as they begin the credit process. Finally, Edmunds launched a number of research and buy tools in support of its goal to be the leader in EV research. These include range tests, charging efficiencies, VIN-level battery health assessments, and EV tax credit incentive guides. Looking ahead to fiscal 2025, we will build on our progress from last year to further expand our competitive mode. We are confident that the actions we are taking will enable us to grow sales, profitable market share, and buys while also driving additional operational efficiencies as the market turns. Some examples include: for retail, we plan to launch an evolved hub within our customers' online shopping accounts that will make it even easier to seamlessly go back and forth between assisted help and self-progression.
Customers will be able to see the steps they have taken on their shopping journey, whether on their own or with help from a CEC or store associate. The hub will also guide next steps and promote MaxCare, our extended service plan offering. Additionally, we will continue to digitize work in support of our focus to build a leaner and high-value assistance model for our CECs. This will enable existing resources to support higher transaction volume as we grow traffic and drive stronger conversion. As part of this effort, we will further integrate Sky into key communication channels and improve its ability to serve as the initial point of contact across many points in the customer shopping journey. Sky will manage next steps on its own or seamlessly transition customers to a CEC associate via the customer's channel of choice.
For vehicle acquisition, we will focus to bring even more vehicles into our ecosystem. A key component of this will be our continued partnership with Edmunds to acquire vehicles from dealers. In the credit space, we plan to further optimize our pre-qualification product by integrating the customer's Instant Offer into the application process. As Jon mentioned, we will also continue to test CAF's participation across varying parts of the credit spectrum. As always, we will continue to pursue opportunities that enable us to provide outstanding offers for consumers while driving sales and economics for the business. In regard to our long-term financial targets, we're maintaining our goal to sell more than 2 million combined retail and wholesale units annually.
However, we are extending the timeframe for this goal between fiscal 2026 and fiscal 2030 due to the uncertainty in the timing of the market recovery and as we continue to focus on profitable market share growth. We will adjust the timeframe as we gain greater visibility into the industry's pace of recovery. Given higher average selling prices, we expect to achieve the $33 billion annual revenue target sooner than units. And similarly, we also expect to achieve more than 5% nationwide market share of 0- to 10-year-old used vehicles sooner than units. Given the recent volatility in vehicle values, we will provide an updated timeframe for our expected achievement at the end of fiscal year 2025. Before turning to Q&A, I want to recognize two significant milestones. First, CarMax celebrated its 30th anniversary during fiscal 2024.
I want to thank and congratulate all of our associates for the work that they do. They are the differentiator and the key to our success. Second, Fortune Magazine recently named CarMax as one of the 100 Best Companies to Work For for the 20th year in a row. I'm incredibly proud of this recognition, particularly as we face a challenging year. It's due to our associates' commitment to supporting each other, our customers, and our communities every day. In closing, I'm proud of the progress we've made on our journey to deliver the most customer-centric experience in the industry. I'm encouraged by the sequentially quarterly improvements. We are driving across our business, and I'm excited about our focuses for fiscal 2025. Our core operations are strong, and we are well positioned to drive growth as macro conditions improve. With that, we'll be happy to take your questions. So, Shelby?
Operator (participant)
At this time, if you would like to ask a question, please press the star and one on your touch-tone phone. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one to ask a question. We'll pause for a moment to allow questions to queue. And your first question comes from the line of Seth Basham with Wedbush Securities. Your line is open. You may now ask your question.
Seth Basham (Managing Director)
Thanks a lot. I have one quarterly specific question and then one big picture question. On the quarter, it seems like service gross profit was weaker than we anticipated. Can you help us understand how much of that pressure was transitory and how much of an improvement we should see in the service line in 2025?
Jon Daniels (SVP)
Yeah, thanks. Thanks for that great question. We do believe it was transitory. We did have a couple of things from a year-over-year standpoint. The planned lower production that we had communicated, so we did expect some headwinds there in the fourth quarter. We also had some wage pressures. Now, that being said, what we have undertaken in the fourth quarter, which we'll carry forward into next year, is even more efficiency initiatives. Things for labor specifically, we've invested in RFID tracking of inventory. We're going to leverage our tech and engineering investments to enhance reporting in our stores. We're focused on driving more MaxCare work to our shops. And at the same time, we've also taken labor and parts rates up to help offset inflationary pressures. So we do expect to see improvement, significant improvement year-over-year.
Just like we delivered this year, there was significant improvement for the year as a whole, and we expect that same next year. Now, it is also certainly related to sales performance as well, given the leveraged, de-leveraged nature of service.
Seth Basham (Managing Director)
Understood. Thank you for that color. And then secondly, Bill, in regards to market share, you indicated on your last call that you started to see an improvement in market share towards the end of the fiscal third quarter. Seems like things slipped a little bit in the fourth quarter. Help us understand why, and when should we expect to see market share increases going forward as the cycle turns?
Bill Nash (President and CEO)
Yeah, great question, Seth. And you're right. Last quarter, I've talked about October from a year-over-year standpoint, actually inflecting positive. But also during the third quarter, I talked about the steep depreciation. It was going to be interesting to see how competitors reacted. When I step back and think about market share kind of at the highest level, the two things that have been impacting us this year, and really some of it was last year as well, are affordability and then, more relevant to this year, is the steep depreciation periods that we've seen. So from the affordability standpoint, we've talked about that throughout the year.
As far as consumers may be trading down, trading into older vehicles, into 0-10-year-old cars that maybe we don't sell, or just basically standing on the sidelines because we see that there's demand out there, yet people aren't actually pulling the trigger. The other thing that we saw during the year, we saw two very steep depreciation cycles. If I look at last year's calendar year, and I talked about it in my prepared remarks, we were growing market share coming out of we were improving our market share coming out of last year. And then we ran into a period, let's call it four or five months, of steep depreciation starting in about April, and it was about $3,000.
Then it stabilized for a little bit, and then we finished out the year with, again, another steep depreciation, probably the steepest we've seen in the shortest period of time, of about another $3,000. And as we've talked about before, when we see the steep depreciation, that's really when we're testing our pricing elasticity because we know that competitors, for their own reasons and for their business models, may end up taking down prices to move inventory, that kind of thing. And what we've said is we're going to continue to move forward on profitable market share growth. So I think what we saw in the fourth quarter, dealers were trying to figure that out in October because a year ago, if you remember, we saw steep depreciation. There was a big influx of where we saw dealers letting inventory go.
And then what happened in the beginning of the first quarter, they ended up buying a bunch of cars because they had sold through too much, and that drove up appreciation. So I think this year, dealers were a little bit delayed, which is why you saw a little bit of an inflection in October. But then we saw a selloff in November and December. Now, the good news is the January data we have. We can actually see where we're improving our market share in January. February, we don't have the actual data yet, but we feel good about February. So I think from a market share standpoint, this value volatility, it can be challenging, and we'll continue to work. And that's one of the reasons why we want to see how this kind of pans out over this year before we update that target.
Hopefully, that color is helpful.
Operator (participant)
We'll take our next question from Sharon Zackfia with William Blair. Your line is open. Please ask your question.
Sharon Zackfia (Head of Consumer Equity Research)
Hi, good morning. I guess two questions, and hopefully, you guys will forgive me. But on the improved affordability, can you give us some metrics around that? I mean, it's clear that used car prices are coming down, and hopefully, rates are top-ish. So what was kind of an average loan payment that you originated this quarter versus maybe the third quarter, or some historical benchmark just to give us an idea of how that's improving for the customer? And then secondarily, just on that market share dynamic, is there any region or any particular cohort of demographics that you've been more susceptible to this market share loss as some competitors may have been less rational? Thanks.
Jon Daniels (SVP)
True, Sharon. It's Jon here. I'll take the first one on the loan payment. So historically, our average used car was $20,000 forever. So that translated, typically, depending on the interest rate, $400 monthly payment. I think that's a good round number to think about. With the appreciation, you saw really a peak probably hit in kind of later calendar 2022 of about $570-$580. I think we cited that was primarily driven by that financed amount. I mean, rates were on their way up, but that financed amount really was driving that. So that increase, we kind of attributed to maybe an 85-15 split on the financed amount versus the interest rate going up. Now, as we've cited, clearly, the vehicle prices are coming down. The financed amount is coming down to some degree, and rates are going in the other direction.
So we probably say this quarter, we probably saw roughly a $520-$530 payment. Still, two-thirds of that driven by that vehicle price still higher. Now, the rate's a bigger contributor, but hopefully, that gives you some perspective on how affordability has improved to some degree. Still a bit of a shock to a consumer that's used to a $400 monthly payment. Coming into a $530 monthly payment, they're going to have to figure out how they work that into their budget going forward. But that hopefully gives you some context.
Bill Nash (President and CEO)
Sharon, the second part of your question, not necessarily in difference geographically. We talked about before, your tier three customer, obviously, we have a lot less tier three sales than we've had in the past. Our consumers that make less than $3,000 per month in a household, they've basically been cut in half. So certainly, that lower financed customer, lower income coming in customer has been impacted. But we also see, and I talked about this the third quarter just from working with one of the credit bureaus, of the folks that don't end up buying, that apply for a loan at CarMax, it's not like we're seeing this big degradation where they're going to somebody else. They're just sitting on the sidelines. And I think part of that speaks to what Jon just spoke about.
The other thing I would just remind everybody on the market share is, historically, we have always grown market share. It's just when there's been unusual events. If you go back to the Great Financial Crisis, if you go to COVID, and I would say now in this period, we've got these very, very steep depreciations. I mean, we saw 2 this year. We saw 1 last year. We've just never seen these before. And so I think working through these, we'll get through them, and then, like always, we'll continue to grow market share.
Operator (participant)
We'll take our next question from Rajat Gupta with JPMorgan. Your line is open. You may ask your question.
Rajat Gupta (Analyst)
Got it. Great. Thanks for taking the questions. I wanted to just quickly ask on how the first quarter was trending. Given you exited or you had positive comps the fourth quarter, should we expect that trend to continue here? Because seasonality would imply comps should move lower or negative again in the first quarter, but curious what you're seeing and any updates you can give us there. And then just a broader question on the long-term targets. It's almost like a four-year range, 2026 to 2030. Could you explain the thought process behind such a wide range? And where is the uncertainty really coming from? Is it on the demand side, or is it on the supply side? Any more color there would be helpful. Thanks.
Bill Nash (President and CEO)
Yeah. So thanks for the questions, Rajat. On the first question, kind of comp cadence, for the quarter, December, January, negative comps. February was a positive comp resulting in a positive for the quarter. Since the quarter ended, it's been a little choppy. We've seen some weakness. And right now, quarter to date, albeit early and again choppy, we're seeing about a mid-single-digit negative comp right now. But again, it's early on, and it's been choppy the last month and a half. On the second question, the market, oh, the long-range targets. Well, keep in mind, on the market share, we'll come back at the end of this year and update that. On the units one, yeah, you're right. It is a wide range. We're going to come back and provide more visibility into that once we just get a better idea of the market recovery.
Keep in mind, I think Cox's latest numbers had this year finishing up about 35.5 million units, where traditionally, we're at 40 million. So I think their expectations are it's going to be fairly flat, maybe up a little bit in total used units. In the 0-10, it might be flat to even up a little bit less. So I think they're expecting, when it comes to total used units, there's probably going to be more growth in the over 10-year-old vehicles than the 0-10. And so that's something of we want to get some visibility into that, especially when it comes to the units. The volatility also plays into it, though, because it also impacts vehicle volatility plays into it because it impacts your buy rate, which ultimately can impact your wholesale.
So as we get more visibility into this market recovery, we'll come back and narrow that time frame for you.
Jon Daniels (SVP)
Yeah. I mean, the expectation is not for it to hit the wide end of that range. It really is we're going to provide visibility once there's just a bit more stability in the market like building.
Rajat Gupta (Analyst)
Just to clarify on the 0-10-year-old comment, I mean, if you look at what's happened with new car sales the last few years and just the leases originated on them, is there a chance that the 0-10-year-old market takes another step down in calendar 2025 before turning positive? Because that should be fairly visible, right, given what we know has happened over the last three, four years.
Bill Nash (President and CEO)
Yeah. Again, I think the 0-10, what the estimates are out there is it's going to be flat to up a little bit. So we'll see where that actually pans out. I mean, keep in mind, there is a new car dynamic here where less cars were sold a couple of years ago. But again, I would also look back to we saw bigger declines back in the Great Financial Crisis. So we'll see. Estimates are that it's going to be flat to up a little bit.
Rajat Gupta (Analyst)
Great. Thanks for all the color.
Bill Nash (President and CEO)
Thank you.
Operator (participant)
We'll take our next question from Brian Nagel with Oppenheimer. Your line is open. You may ask your question.
Brian Nagel (Managing Director)
Hey, guys. Good morning.
Enrique Mayor-Mora (EVP and CFO)
Good morning, Brian.
Jon Daniels (SVP)
Morning.
Brian Nagel (Managing Director)
Okay. This is my first question just with regard to used sales, and maybe a bit bigger picture. But I guess as we're watching the business, you got the positive comp, albeit slightly. You got the positive used car unit comp here in Q4. And then in response to the prior question, you talked about maybe some incremental weakness here in early Q1. But the question I have is, as you're looking at this business, recognizing that you don't give guidance, there's a lot of moving parts out there, what has to happen? Because it seems like a lot of the key factors are starting to turn more favorable for CarMax, whether it be used car pricing moderating, rate stabilization. We're seeing the data, a better tax refund season.
I guess as you're looking, what's kind of the equation, if you will, to get back to that normalized used car unit comp?
Bill Nash (President and CEO)
Yeah. And I think we've hit on a couple of the major issues. The affordability has to continue to move down. I was encouraged. I mean, this quarter was the first time we've been under a $26,000 average selling price in two years. So that's a step in the right direction. I think there's a lot of positives out there you referred to, hopefully, interest rates are at least stable. And once they start coming down, I think that's certainly a good thing as well. I think building on some of the stuff that we've been working on, the efficiencies that we're working on, that we've talked about, this fact that we've got sequential improvement. Jon talked about CAF becoming more of a full credit spectrum lender. There's opportunity there. I think there's opportunity in Omni.
I mean, we've got a lot of good things that are positive, but we do need a little help on the affordability. And I think we also just that volatility. Don't underestimate. I mean, when you have a year where you see depreciation of $6,000, keep in mind, we saw some appreciation at the beginning, so it offsets some of that. But $6,000 really in two different time periods, we just haven't seen that. And we had another one of those last year. I would call them their price corrections. And I think having some visibility into that and stabilizing that, if you get in we've shown continued market share growth over the years, whether it's been appreciation, whether it's been normal depreciation. Keep in mind, normally, in any year, there is depreciation. It's probably $1,500, $1,600 a year.
We've been able to take market share in all those environments. I think those are the two big factors for us.
Jon Daniels (SVP)
I think a couple other just demand signals that we've seen. Web traffic was up again this quarter, year over year. Finance applications were up again this quarter. So there's demand signals that we're seeing out there. It just boils down to we've been talking about, really, to the affordability question.
Brian Nagel (Managing Director)
That's very helpful. If I could ask just one follow-up. You've talked now for a bit about tighter lending standards. We're clearly seeing the benefits of that in the CAF data, particularly, I guess, the loan loss provision. But I guess the question I have is, to what extent is or what potential extent are your tighter lending now impacting demand for used cars at CarMax?
Jon Daniels (SVP)
Yeah. Appreciate the question. I mean, certainly, I think that's the benefit of our platform, right? CAF is able to tighten, and it's able to flow down to partners that are willing to maybe they're going to ask for a little more money down. It's going to be a little bit higher rate, but they are going to have the option to buy. And we see people get picked up down the line. We're very careful when we test rates, and we do any underwriting adjustments. We watch it very carefully. We test it. We know what's going to get picked up, and we're very thoughtful about the sales impact in any decision we make, whether it be pricing or underwriting. So yes, certainly, there's going to be a few people that might not choose that higher rate, that more down payment from our lenders down the line.
But we believe, generally, they are very excited. Tier 2 partners are when CAF passes on stuff, and they can go pick it up.
Bill Nash (President and CEO)
Yeah. But Brian, it's definitely a headwind. I mean, we're tightening. We've got great partners that are picking up some of that, but they don't pick it all up. And then it goes down to the Tier 3, and you've seen where our Tier 3 volume just is in general. So there's no doubt that the tightening, in general, of the industry is having an impact.
Brian Nagel (Managing Director)
Got it. I appreciate it. Thank you.
Bill Nash (President and CEO)
Thank you, Brian.
Operator (participant)
We'll take our next question from Craig Kennison with Baird. Your line is open. You may ask your question.
Craig Kennison (Senior Analyst)
Hey. Good morning. Thanks for taking my question. I wanted to ask about sourcing, Bill. You bought 11% fewer cars. I know depreciation is a headwind, but you also have these innovative new tools like Instant Offer and MaxOffer that I thought might provide a secular lift. So I'm wondering, on Instant Offer, can you shed any light on just overall appraisal activity and buy rates to give us a feel for the kind of traction you have with that tool? And then on MaxOffer, how much of that 45% growth, albeit from a small base, is attributable to adding new dealers versus momentum with existing dealers?
Bill Nash (President and CEO)
Yeah. Thanks for the question, Craig. From consumers, again, I think it's more when you're talking about the decline, it's more of a year-over-year dynamic. Buy rate this year was down a little bit versus last year. But keep in mind, last year, I think in the fourth quarter, we saw about $2,000 of appreciation. We didn't see that this quarter. It was much less than that by the end of the quarter. That has an impact because consumers always think their cars are worth more money. When you can put more on it, that helps buy. On the MaxOffer, the increase there is really well, we've increased the overall number of dealers. The way we think about it is, how many active dealers do you have? And of the dealers we have, we saw about a 50% increase in active dealers actually using the tool.
We're encouraged by that. We haven't expanded it to other areas. We think there's a lot of opportunity to continue to move this along, which is what I said earlier in my prepared remarks. It's going to be a focus for us.
Craig Kennison (Senior Analyst)
Thank you.
Bill Nash (President and CEO)
Thank you.
Operator (participant)
We'll take our next question from Michael Montani with Evercore ISI. Your line is open. You may ask your question.
Michael Montani (Managing Director)
Hey, guys. Good morning. Thanks for taking the question. I just wanted to ask to start off, if you think about this year, is there any reason that this wouldn't be another year for CarMax to take market share? And then is there a need at all to either sacrifice gross profit per unit or potentially loosen credit standards to take share?
Bill Nash (President and CEO)
Yeah. I mean, look, if you lowered your prices, you could absolutely sell some more cars. But I'll go back to what I said earlier. I mean, we're focused on profitable market share. And look, you can see it with the publicly traded auto retailers who are swapping it off, sometimes units for GPU. And when you look at total comp GPU, it hasn't been necessarily a good decision. So we'll continue to test the elasticity. Our goal, obviously, every year is to gain market share. I am hopeful. Just looking at kind of depreciation trends, I'm hoping that this year will be a more normal depreciation and appreciation cycles. But we'll see. And I think that's going to be a factor.
And again, I always couch it with, we'll always test the elasticity to see if it makes sense to lower margins in order to get more units and more total gross profit.
Jon Daniels (SVP)
Yeah. As far as the CAF lending standards, I mean, I think that's one of the things that we're optimistic about. We've tightened. We've tightened for a very purposeful reason. Obviously, we have partners down the line. But as Bill mentioned, yes, you do lose sales when CAF tightens. But we believe that this cycle will turn. The consumer will get healthier, and we're excited to go after more market share, up and down the credit spectrum. So I think it absolutely is an opportunity on the other side of this.
Bill Nash (President and CEO)
Yeah. I'm optimistic with CAF. I mean, I know the Fed, there's a decision on when they're going to cut rates. I mean, at least it's stabilized and doesn't sound like it's going to go up. I'm going to knock on wood right now. But as that comes down, that's a tailwind for us for sure on a couple of different fronts, from a CAF standpoint, margin standpoint, but also from a sales standpoint.
Michael Montani (Managing Director)
Just trying to think about the mid-70s SG&A ratio target as well. Is that feasible for this year, or how should we think about that?
Jon Daniels (SVP)
Yeah. I think for the mid-70s, as we've talked about, that is absolutely our next step in our progress. I think in terms of this coming year, we're going to need strong consumer demand to also return. There's obviously two variables in that equation, right? You have SG&A, which I feel we've made a lot of strides this past year and will continue to focus on. But we really need that gross profit number to accelerate in order to hit that mid-70%. I think to hit it in FY25 would really be a tough cut just given the volumes of our unit sales over the past couple of years here.
Bill Nash (President and CEO)
Well, and I think also just given that they think that the market is overall going to be fairly flat.
Jon Daniels (SVP)
Yeah. Exactly.
Michael Montani (Managing Director)
Got it. Thank you.
Bill Nash (President and CEO)
Thank you.
Operator (participant)
We'll take our next question from John Healy with Northcoast Research. Your line is open. You may now ask your question.
John Healy (Managing Director)
Thank you. Just wanted to ask a bit about the wholesale business. It's a nice position where we kind of ended the year in terms of GPUs on wholesale. But I was kind of curious kind of how you see that business from a GPU performing in 2025, just given the expected kind of descending of the used car market in terms of values with improving supply. Do you think we can hold at this kind of $1,000 level for a while? And can you talk a little bit about what you're doing with the auction side of the business? I think in your prepared remarks, you mentioned that you're going to build a standalone auction facility, which I believe would be the first one for the company.
Maybe where you're going with that business, and does that decoupling of auctions from the retail location potentially mark a new business line that you're getting into, not only from a self-sufficiency standpoint, but maybe from a revenue standpoint?
Bill Nash (President and CEO)
Yeah. Good morning, John. Thank you for the questions. On the wholesale margin, yeah, I was especially pleased with the wholesale margin. Just given some of the year-over-year dynamics, the team did a phenomenal job. And I also think it speaks to just some of the improvements we've made in our overall auction process with technology, that kind of thing. I think you're thinking about it the right way. If you look at it on a yearly basis, I think a good target, give or take a little bit, is similar to what we ran for the year this year on wholesale margins. So I think you're thinking about that the right way. And I think it speaks to a lot of the improvements that we've made in the business.
As far as the standalone auction facility, it's interesting because we actually have a couple of standalone auction facilities that we've built over time just that are generally located right close to one of the stores from an extra capacity. But you're right. This would be the first time that we'd gone out and really kind of built a facility with the intention of it having to be an auction facility. And I think going forward, you're going to see some of these standalone auction/production. The one that we're talking about for next year is just an auction facility. We may run some logistics hub out of there, but right now, it's an auction facility. And it's really going to help us in a couple of different ways.
The facility will be close to existing stores, and we'll be able to take wholesale vehicles out of existing stores, allow them to leverage the lots more from a service standpoint, more from a sale standpoint. We're ending up moving a lot of cars anyway from satellites and XF stores. So now taking them to this location will just help us continue to make benefits or improvements at kind of these standalone facilities. And I think they'll pan out well for us going forward. So our intention as we go forward is to build more of these things, get more of some of the wholesale sales out of the stores to free up space, free up capacity that we think will have other benefits to the business, whether it's, "Hey, you can now do a little bit more MaxCare retail service." There's a lot of benefits to that.
Plus, just the standardization of having these bigger locations in close proximity to stores will also help us to innovate even quicker than what we've been able to do.
John Healy (Managing Director)
Got it. Thank you, guys.
Bill Nash (President and CEO)
Thanks, John.
Operator (participant)
We'll take our next question from Scot Ciccarelli with Truist Securities. Your line is open. You may ask your question.
Scot Ciccarelli (Senior Equity Analyst)
Good morning, guys. Another market share follow-up, I guess. Bill, why do you think you lose share in disrupted periods? I mean, historically, industry leaders in various retail verticals actually accelerate share gains during disrupted periods. What is different about the CarMax model why that may not follow a similar pattern?
Bill Nash (President and CEO)
Well, when you say disrupted periods, I mean, the three periods of, I think, a Great Recession, if I think about COVID, I think what we're doing, what's going on now, they're all a little bit different. I mean, here, more recently, it's this vehicle volatility that I talked about earlier. And when there's shocks to the system of large depreciations over a short amount of time, you know how we run the model? We're like, "Okay. Should we lower our prices? And is it overall better from a profitability standpoint?" And what we've seen is it just doesn't pan out that way, which is why we hold the margins steady. Now, there's lots of competitors who don't do that, and they do what's right for their business. They've got different demands. They've got credit lines, things like that.
So they have to do what's right for their business, and we have to do what's right for our business. So you will see we've seen this year when we hold the prices and others are liquidating inventory for various reasons, we tend to give up market share.
Scot Ciccarelli (Senior Equity Analyst)
So just philosophically, is that the right decision over time? I understand you can capture more profit, but if you want to be a growth vehicle, and you have been for 20-plus years - I think you said 30 today - is that the right decision to kind of hold the line on price and protect profit, or should you be seeking market share? I'm just wondering philosophically how you guys are thinking about that. Thanks.
Bill Nash (President and CEO)
Yeah. Yeah. No. I mean, it's a good question. And obviously, we think philosophically, it's look, the buying cycle is every five years. And if you had asked me at the beginning of this year, "Do you think there might be a price correction?" I would have said, "Maybe. Yeah. Probably another price correction coming out of last year." I didn't expect there to be two price corrections. I don't see this type of environment being able to replicate itself year after year. I think these are very unusual circumstances. So I do think that here in the short term, it is the right thing to do. It's not like this is going to be continuing to repeat. If it was, then we would look at the business model. But I just think we believe that this is the right move.
Scot Ciccarelli (Senior Equity Analyst)
Got it. Thank you very much.
Bill Nash (President and CEO)
Thanks, Scott.
Operator (participant)
We'll take our next question from Christopher Bottiglieri from BNP Paribas Exane. Your line is open. You may ask your question.
Christopher Bottiglieri (Senior Equity Analyst)
Hey, everyone. This is Ian Davis on for Chris. Thanks for the question. It seems you've been a bit more reliant on warehouse facilities than ABS in recent years ex the tier 2 and tier 3 pilot. So wondering if you could elaborate a little bit on how average FICO and expected losses of loans in these warehouse facilities compares to maybe what you see in the similarly high loans and ABS facilities?
Jon Daniels (SVP)
Sure. Yeah. I can take that one, Ian. Yeah. I mean, and I think you said excluding tier 2 and Tier 3. So if we're talking focused on the Tier 1 business, yeah, I mean, our focus is generally to bring in all the volume from Tier 1 into our warehouse facilities. And our goal would be to get it all into the ABS market. Now, fundamentally, there are things that you need to pare back. There are certain criteria they need to meet. You need to have a title. They need to have made a first payment, etc. So you're going to have some higher-risk stuff fall out. It's always going to happen. But our goal is to move all that volume from originations through the warehouse into ABS. Inherently, because of those exclusions, you're going to have probably a little bit higher FICO in the ABS deals.
If you look at deal over deal over deal, that change in FICO is coming from us changing what we're originating and that ultimately flowing through. Remember, it's going to take six to seven months to get into an ABS deal from when we originate it. But that movement over time in ABS is really what we're underwriting, probably less so what we're holding out into in a warehouse line. Yeah. And from a total capacity standpoint, we certainly leverage the ABS markets. The most efficient way to fund the business. We also, as you've noted, we've also grown our kind of non-ABS funding with our banking partners. We have tremendous banking partners, and we've built out some additional facilities there. And we talked about that several years ago about just bridging out and having alternative finance options as we continue to grow the business. And that's what we've done.
Christopher Bottiglieri (Senior Equity Analyst)
Got it. That's helpful. And if I could just slip another question in. We had read that CarMax may be removing the 30-day return policy. Is there any truth to this? And if there is, could you contextualize maybe how material abandoning the policy would be to earnings and perhaps any other context in terms of customers valuing it or maybe abusing it? Any context there would be helpful.
Bill Nash (President and CEO)
Yeah. So what you're referring to is the 30-day money-back guarantee. And we're modifying it to 10 days money back, which is still industry-leading. And that's really due to really some experiential headwinds both for customers and associates, which also add increased expenses when you're talking about most of our customers. A lot of our customers take advantage of it well before the 30 days. You get past the 10, some people are just working the system. Others, what we run into is some headwinds with DMVs and municipalities getting title work squared away, checks back, taxes back, that kind of thing. So I think that's what you're referring to.
Christopher Bottiglieri (Senior Equity Analyst)
Yep. That's right. Yeah. That's helpful. Thank you.
Bill Nash (President and CEO)
Yep.
Operator (participant)
We'll take our next question from Chris Pierce with Needham. Your line is open. You may ask your question.
Chris Pierce (Analyst)
Hey. Good morning. I just wanted to ask, are we set up for another period of excessive depreciation in the wholesale market? Because as we get through tax refund season, which we're sort of already through in the wholesale market, there's going to be normal depreciation. But are we set up for further excessive depreciation? And what would limit excessive depreciation? Because as far as I can tell, dealers are already carrying lower inventories versus normal. So is there anything that the industry can do to combat that, or is it just we need to see that excessive depreciation because we need to get back to a $22,000 abused car?
Bill Nash (President and CEO)
Yeah. Chris, I'm not necessarily seeing what you're calling excessive depreciation. I'm really seeing more depreciation that's more in line with kind of what you would see between 2015 and 2019. It's actually, if you look at it, appreciated a little bit more. But again, your average sales price is up higher. And just recently, have we started to see some depreciation? So I haven't seen what you're referring to as far as excessive depreciation. And I think we may see more of a historical type of appreciation, depreciation throughout the year, but we'll see.
Chris Pierce (Analyst)
Is that because of lower dealer volumes or inventories, or is that what gives you confidence that you think you'll see that you won't see abnormal depreciation this year like you saw last year?
Bill Nash (President and CEO)
Well, I'm just going off of what I've seen so far, kind of calendar year to date, and comparing it to historical averages. The last two to three years have kind of been all over the board from an appreciation standpoint and a depreciation standpoint. If you kind of take those years out and look more historical, like 2015 to 2019, what does the depreciation curve look like? What does the NAAA data look like? I would say this year, calendar year to date, is falling more in line with kind of what those cycles look like. So that's what I'm referring to.
Chris Pierce (Analyst)
Okay. Appreciate it. Thank you.
Bill Nash (President and CEO)
Thank you, Chris.
Operator (participant)
We'll take our next question from John Murphy with Bank of America. Your line is open. You may ask your question.
John Murphy (Managing Director)
Good morning, guys. Bill, 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-to-year basis. And as we think about this, unless there's some massive economic boom that is not really expected, it seems like through 2024 and 2025, 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 there 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. mix and then potentially pushing a little bit more to 7-10s.
Bill Nash (President and CEO)
Yeah. So I think looking at the quarter, if I look at 0-4 versus, let's call it, 5+, we were similar to last year. We were a little bit older than the third quarter. So I think our mix, let's call it it's interesting. It's almost 50/50 when you look at 0-4 and the 5+. When I look at 0-6 maybe versus the 7+, for last year, it's very similar. Let's call it a 70/30 split. 0-6-year-old, 70%, 7+, 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 0-6 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 years ago, there weren't as many new cars sold. But again, I would just point to you're still in the ballpark of 15+ 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 (Managing Director)
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 OPENLANE, Manheim, and ACV all kind of help with their virtual auctions, 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 (President and CEO)
Yeah. Look, I'm pleased with the MaxOffer. I mean, we're continuing to buy more vehicles through 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've historically talked about self-sufficiency, we've always talked about it from a standpoint of just the consumers. Well, really, you should start adding in this bucket as well, which again just helps keep our self-sufficiency very high.
John Murphy (Managing Director)
Great. Great. Thank you very much.
Bill Nash (President and CEO)
Thank you, John.
Operator (participant)
We'll take our next question from David Bellinger with Mizuho. Your line is open. You may ask your question.
David Bellinger (Senior Equity Analyst)
Hey. Thanks for the questions. Maybe just a follow-up on that last one. In 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-$25,000 range right now, or is that more of a limited opportunity?
Bill Nash (President and CEO)
Yeah. Actually, 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 less than $20,000 cars. I think as far as what do the vehicles look like from 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 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 (Senior Equity Analyst)
Got it. If I could just follow up one more on your quarterly 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 (President and CEO)
Yeah. I think it probably more just speaks to the 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 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. If they're basically buying food and housing, you get inflationary pressures there. So I think it speaks more to the consumer mindset at this point. And like I said, it's been choppy. I mean, we've had some weather things going on. There's been a lot going on.
We'll continue to monitor it and make adjustments as we can as we go through.
David Bellinger (Senior Equity Analyst)
Got it. Thanks, Bill.
Bill Nash (President and CEO)
All right. Thank you, David.
Operator (participant)
We'll take our last question from David Whiston with Morningstar. Your line is open. You may ask your question.
David Whiston (Senior Equity Analyst)
Thanks. Good morning. It's a two-part question on affordability. You mentioned ASPs are continuing to fall, which is good. But are consumers even noticing the lower ASP at this point? Are they entirely focused on an unfavorable monthly payment due to interest rates and also on that trade-off scenario for affordability? Is the consumer moving into cars away from trucks, or is it more just shifting into older than five-year-old vehicles?
Bill Nash (President and CEO)
Yeah. Well, I think it's always been about the monthly payment for the consumers. The prices are coming down. And as John said, the actual monthly payment's coming down, but it's still over $100 more than what it used to be. So when a consumer's 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. And again, there's lots of data points that 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 you mentioned?
David Whiston (Senior Equity Analyst)
Yeah. Are they also moving away from trucks into cars, or are they just focused on an older vehicle to try and impact that monthly payment?
Bill Nash (President and CEO)
Yeah. No, it's interesting. If you look at the numbers for the quarter, from a class standpoint, we actually sold more from a mixed standpoint, more larger SUVs, more expensive type of cars. Now, the average age, both of our wholesale and retails, 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 (Senior Equity Analyst)
Okay. Are you worried about the off-lease shortage ramping up with the anniversary of the start of the chip shortage?
Bill Nash (President and CEO)
Yeah. 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 leased customers to take it back to the franchise dealer. We have customers wanting to sell us a leased vehicle, and we can't buy them because of those restrictions. And quite honestly, I think it's been a nice benefit for the franchise dealers because they're able to get these things at a good rate based 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 (Senior Equity Analyst)
Okay. Thank you.
Bill Nash (President and CEO)
Thank you.
Operator (participant)
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 (President and CEO)
Great. Well, listen, I want to thank everybody for joining the call today. Obviously, we've got lots going on. We appreciate your questions and your support. Before I close, I again 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 it 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 (participant)
Thank you. Ladies and gentlemen, that concludes the Q4 fiscal year 2024 CarMax earnings release conference call. You may now disconnect.