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RICHMOND, Va. — CarMax Auto Finance watched its income and
originations strengthen during Q1 of its 2013 fiscal year as results came out
as a part of CarMax's overall financial report earlier this week.

For the period that ended May 31, officials tabulated that CarMax
Auto Finance's income grew by 8 percent to $75.2 million compared with $69.7
million in the first quarter of the prior year. They noted favorable CAF loss
experience increased net earnings by $0.01 per share in this year's first
quarter and $0.03 per share in last year's quarter.

"Excluding the loss favorability in both periods, the
percentage growth in CAF income would have more closely resembled the increase
in average managed receivables," the company division stated.

CarMax Auto Finance's average managed receivables grew 16
percent to $5.08 billion in the first quarter, compared with $4.39 billion in
the prior-year period.

"The growth reflected increased origination volume
throughout fiscal 2012 and in the first quarter of fiscal 2013," officials
explained. "Origination volumes benefited from an increase in CAF's loan
penetration, as we transitioned back to a pre-recession origination strategy
and reduced the volume of loans sold to third-party providers.

"Originations also benefited from increased average selling
prices and retail unit sales during fiscal 2012 and 2013," they went on to say.

The division's allowance for loan losses increased modestly
to 0.9 percent of managed receivables as of May 31, compared with 0.8 percent as
of the same date a year earlier.

"The effect of the change in the credit mix was largely
offset by favorable loss performance," officials pointed out.

Editor's Note: For a report on CarMax's Q1 sales performance
and more, check this story from sister publication Auto Remarketing.