Everyone Has Stopped Buying Used Cars! CARMAX Sounds the Alarm! (Video)

In this 4 October 2026 published video, host Micky Fisher talks about how people have completely stopped buying used cars. Much of it boils down to affordability. People cannot afford used cars in 2026 and they certainly won’t in 2027. 

While headlines and trending automotive videos claim “everyone has stopped buying used cars,” the reality is a severe affordability crisis driving a major market shift rather than a complete halt in sales.

CarMax and other major pre-owned retailers are sounding alarms due to plummeting profitability, multiple rounds of corporate layoffs, and declining unit sales. Rather than consumers abandoning cars entirely, an intersection of economic pressures has pushed the traditional used-car buying model to a breaking point.

CarMax recently executed its third round of layoffs in a 12-month span, trimming about 4 percent of its white-collar corporate workforce to preserve capital amid dropping profit margins. Highlighting the changing landscape, CarMax was removed from the S&P 500 index, with online-focused competitor Carvana taking its place due to different financing and operational structures. Retailers have struggled with compressed margins. In some quarters, wholesale used car values dropped faster than dealerships could adjust their fixed-price inventory, leaving them holding cars they overpaid for.

The slowdown isn’t a lack of interest from buyers, but rather a harsh financial reality driven by several compounding factors. According to Kelly Blue Book data, the average used vehicle price remains highly elevated at $27,239, matching pandemic-era highs. National auto loan averages for used cars hover around 11 percent to 12 percent APR, causing monthly payments to balloon to an average of $540. For buyers with subprime credit, these rates can climb much higher, pricing a vast demographic entirely out of the market. Roughly 22 percent of all auto loan applications are being denied as banks tighten lending standards. Concurrently, nearly 30 percent of consumers trading in vehicles owe more than the car is worth, carrying an average of $7,900 in negative equity into their next loan. Beyond the vehicle payment, sky-high car insurance premiums, elevated fuel prices, and expensive out-of-warranty repair costs are forcing consumers to rethink buying. According to AAA data, the total annual cost of vehicle ownership has climbed toward $13,000.

Instead of buying expensive used inventory, a massive portion of drivers are choosing to keep their current, paid-off vehicles and invest in necessary maintenance. This behavior has choked the supply of high-quality trade-ins, leaving dealerships with fewer reliable, affordable cars on their lots and further stalling overall market volume. 

https://youtu.be/BtPhPhLSEmA

In this video, I talk through the following points:

• Carmax just finished their 3rd round of layoffs this year.
• Carmax is trying to restore their profitability.
• Carmax goes profit is declining quick.
• People are financially stressed right now.
• Used cars aren’t affordable anymore…
• Average used $27,239 according to kbb, the highest we’ve seen since the height of the pandemic.
• Used car prices spiked 7 percent year over year.
• Interest rates are still garbage. 11-12% is still the national average APR. 11.3% is the current average as of today.
• Huge amount of your monthly payment goes toward your interest… vs the principal.
• Average used vehicle monthly payment is $540.
• Brand new cars have gotten wildly expensive. Average price tipped over $50K. This bumped up used prices.
• Used cars aren’t affordable affordability is gone. Quality is gone! Too much tech, too many recalls, it’s pathetic. 
• Who wants to overpay for a car that has quality control issues and is out of its manufacturer warranty.
• Dealer doc fees, protection packages, extended warranty, etc. … people are tired of getting nickeled and dimed.
• People are holding onto their paid off cars now. People are refusing to trade in their paid off cars.
• A lot of the people who have consistently traded in for a new vehicle every 2-5 years are rolling negative equity into their new auto loan.
• 22 percent of all auto loans applied for in 2026 were denied.
• About 30% of all vehicles traded in last year had a negative equity.
• The national average negative equity is $7900.
• People are dragging out their auto loans too far… 25 percent of all loans taken in 2026 are for 84 months! Almost 3 percent were for 96 months!
• Repair costs have gotten out of hand, people don’t want used out of warranty.
• Insurance premium continue to skyrocket. 
• Fuel prices are high and that hurting people.
• Carvana has performed better than Carmax right now. People are choosing to skip the dealership!
• The second half of 2026 here has been painful for Carvana too.
• It’s wiser to keep ahold of their current vehicle. Perform the necessary maintenance and service instead.
• People are not confident in the economy right now… people aren’t confident in job stability right now.
• Over 100M auto loans exist within our country.
• Owe $1.67 Trillion on auto loans across the U.S. right now.
• Auto loan delinquencies are on the rise… they’re well above the norm.
• Vehicle repos are on the rise.
• People cannot afford new cars in 2026.
• Quite frankly, people can’t afford used cars in 2026.
• Used car dealers are going out of business in 2027. Dealers are taking significant losses on their used inventory. The demand just isn’t there.
• Average new vehicle ownership costs about $13K to own each year. This includes the cost of everything -considering someone drives… payment, gas, insurance, 15K miles of driving per year. Up for $11K in 2025.