Expert finds a ton of repos at the Carmax auction. He says that should be a major red flag for customers

@thankucheese/TikTok JHVEPhoto/Adobe Stock (Licensed)

‘All these cars have stickers’: Expert finds a ton of repos at the CarMax auction. He says that should be a major red flag for customers

'They're just giving out cars to make a buck.'

 

Jack Alban

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Posted on May 13, 2024   Updated on May 15, 2024, 3:12 pm CDT

“More carmax repos at the auction. People are defaulting on their loans and getting their vehicles repossessed,” TikToker Cheese (@thankucheese) writes in a caption for yet another video where he shows a wave of repossessed CarMax vehicles he’s scoping out at an auction.

A car dealer by trade, Cheese is always on the lookout for good whip deals that he can purchase and then go on to resell. In February, the Daily Dot reported on Cheese’s CarMax repo finds, which show the trend of customers who bought vehicles from the used car giant who couldn’t afford the monthly notes they come with.

Although CarMax’s stock is dropping in tandem with the precipitation of its profits, some people believe that the car repossessions could be a part of the company’s strategy: the business intentionally approves loans for vehicles to customers it knows can’t afford them.

“Carmax is in big trouble,” a text overlay in the video reads as the TikToker walks through a lot of vehicles.

“These look like all CarMax repos. A lot of people seem to be defaulting on their loans. As you can see, all these say repos. I mean it’s just repo after repo, all, everywhere right here,” Cheese says as he passes by a variety of late-model cars. The clip then transitions to him seated inside of a car where he explains why he’s walking through a proverbial graveyard of repossessed cars.

“I’m at the CarMax auction right now looking at cars that have been repossessed in people who have defaulted on their loans,” he notes.

Cheese shows off a Benz sedan to detail an example of what he’s referring to.

“This person literally just left their sorority or fraternity and got their sh*t repossessed. Nice Benz right here. It’s another Cadillac, repossession right here as you can see,” he says after walking past the Mercedes and to a black sedan behind it. Like all of the other repo models, there’s an indicator on the windshield noting as such. He cracks open the door of the car to check the interior out.

“Smells straight smoked out, that sh*t is crazy. I mean it’s just continuous like repo after repo, I mean you can’t…all these cars have stickers for repossession as you can see. If you see any of them with the red stickers it might just have writing on it too, like I said, repossession. Look at this truck right here,” he says, showing off a White Chevy on camera.

Then he heads on over to a higher-end Ford offering: “I mean look at this Lincoln Navigator this thing is basically new man, you have to have pretty good credit to get proof for something like this man. But damn, this just got repossessed too.”

One TikTok user who claimed to work for CarMax said that management is indiscriminately approving car loans. “I work at carmax they’re just giving out cars to make a buck,” they wrote.

Someone else speculated, “CarMax gives out cars to people who can’t afford them because they know they’re going to repo them and sell them again.”

From one customer’s perspective, they said that they knew CarMax approved them for a vehicle loan they know any other dealership would’ve immediately shot down: “Carmax definitely let me buy a car I should’ve been denied for. I haven’t had trouble with the payments but another dealer would’ve laughed in my face.”

However, others said that this is a result of the “bubble” that occurred during supply chain issues due to the COVID-19 pandemic. Inflation, along with this supply chain “bubble” ultimately contributed to skyrocketing car prices.

“It’s not just CarMax. it’s all dealers now, that bubble finally popped!” another user contended.

Another echoed this sentiment, ominously writing: “The economy is tanking. Many are having to let cars go back because insurance and the cost of living spiked. I see it getting worse.”

@thankucheese More carmax repos at the auction. People are defaulting on their loans and getting their vehicles repossessed. #repo #repos #repossession #carmax #auction #dealer #wholesale #cadillac #lincoln #mercedes #retail #market #crash #save #fyp #fy #viral #trending ♬ Beautiful Things – Benson Boone

One person pointed out that CarMax isn’t hurting as a result of the repossessions, and that banks are ultimately going to be the ones going after customers and ruining their credit. “Newsflash: Carmax got Paid IN Full!!! It’s the banks that financed these cars that are gonna be holding the bag,” one user said.

Another user on the app said they were thankful for CarMax because without the company, they wouldn’t have been able to have a vehicle. “Carmax was a blessing to me. my credit was poor, got a car, paid it out. now in a new car,” they wrote.

The Daily Dot has reached out to CarMax and Cheese via email for further comment.

Update 3:10pm CT May 15: In an email to the Daily Dot, a CarMax representative shared the following:

“CarMax is committed to transparency in all aspects of the car buying experience,” they wrote. “We offer upfront, no haggle pricing and our associates are paid the same regardless of a car’s price, so the focus is on helping our customers find the right car for their needs and budget.  We offer a car payment calculator on our website to help customers determine whether a vehicle’s price is in line with their monthly budget expectations.” 

“We also encourage our customers to consider financing through CarMax, because we work with some of the top finance companies in the country that make competitive offers to a wide range of credit profiles, and our credit application process is quick and easy,” they continued. “All credit offers are thoroughly and clearly presented so that our customers can make an informed decision.  However, it is ultimately up to a customer to decide whether to accept a financing offer from one of our finance affiliates.  CarMax also offers our customers the option to replace their financing within three days penalty-free if they find more favorable terms.”

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*First Published: May 13, 2024, 10:00 pm CDT