RICHMOND, Va. -

CarMax’s in-house auction arm, whose fiscal year ended Feb. 28, recently accomplished something it had never done before — it exceeded $1,000 in profit, per wholesale vehicle, in its fourth quarter. To be exact, the wholesale vehicle gross profit for the quarter was $1,036, a roughly 9-percent year-over-year increase.

When asked what fueled that kind of profitability in Q4, CarMax’s president and chief executive officer, Tom Folliard, attributed the result to “execution.”

“Really good execution continues to build year over year,” Folliard said. “It’s the first fourth quarter we’ve ever had that exceeded $1,000 in profit per car. We’ve had two first quarters that have done that in the past but as our reputation builds as a great place for dealers to come and buy this type of product,

“I think our stores do a great job of marketing and it’s always a balancing act between wholesale margin and making sure we have a very strong buy rate,” he added.  "Remember lots of these customers that are selling these cars are also buying a car from us. So a good barometer for how fair we’re being with our customers is our buy rate.”

And that buy rate, 30 percent, is a figure Folliard considered “very strong.” He also said it’s always a challenge to maintain a balance between the wholesale and retail business.

“It’s never a standalone business that can be managed separately,” Folliard said. “You always have to pay attention to what’s happening on the retail side. I’m really proud of the stores and how well they’ve executed. We have some stores that are particularly tight on space and … some stores are running two auctions a week now, out in California. The stores have done a fantastic job of managing relationships and making sure we get great attendance. That’s led to great performance.”

That performance is easily apparent. To provide some overall context, CarMax retailed 582,282 used vehicles in its fiscal year ending on Feb. 28. In that same time, CarMax Auctions sold 376,186 wholesale units solely at its in-store auctions, selling only vehicles it owns, to licensed dealers.