December 19, 2016
Paul Proestos is the owner of the Santa Fe Auto Showcase, which sells inspected used cars. He was one of the first in Sante Fe to discover that CarMax was opening a used car dealership and financing franchise on Cerrillos Road. He moved his business, shortly after being evicted from his old location to Rufina Street which is near the Tortilla Flats restaurant.
His eviction was caused by the landlord wanting to make room for CarMax. By combining multiple properties on Cerrillos Road, north of Interstate 25 near Ocata Drive, he could sell the entire expansion to CarMax.
A spokesperson for CarMax said the company believes Santa Fe is a good location for their overall current growth plan. They said the store at this particular location will be a small-format store. These stores stock around 150 cars and are approximately 7,000 square feet. With the purchase of 8 acres, CarMax will have a smaller presence than many of their other stores. The firm is expecting to hire between 10 to 15 employees in Santa Fe.
Paul realizes CarMax is enormous and will have a major impact and be quite devastating for many car dealerships in the area. CarMax has 150 stores in 39 states and it takes approximately 2 to 3 years for them to open a new store.
According to various financial websites, CarMax receives 57% of their revenue from car sales, 13% from financing, and 14% from selling extended warranties to purchasers. CarMax also makes revenue from auctioning off trade-in cars which increase their share of profits. CarMax is the 7th largest car loans provider in the U.S. They are able to provide financing to people who would otherwise not qualify for a loan but at a higher interest rate.
Among the first dealerships to relocate were Honda and Subaru of Sante Fe, moving to south Cerrillos Road by the Walmart Super Center nearby Interstate 25. Jason Bass, general sales manager, said their sales have just about doubled at their new location. He said their visibility and highway frontage is far better than the old location which was behind the Sante Fe Auto Park.
He believes with the increase of shoppers on south Cerrillos Road will mean more people coming into his dealerships. They will see what Honda and Subaru of Sante Fe have to offer and that includes a large range of used cars. He's quite happy about the new south Cerrillos location and believes "the more the merrier".
Referring to CarMax he said this is a strange market for them to come into, they usually go for larger markets. CarMax also has a location off Interstate 25 in Albuquerque.