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CarMax Inc.'s
KMX big losses Tuesday stemming from tighter lending standards dragged down a host of other auto retailers as investors feared contagion.
CarMax, the big daddy of used car retailers with a market cap of $11.62 billion, said second-quarter same-store sales growth slowed to 0.2 percent from 15.9 percent a year earlier.
RBC Capital Markets analyst Scot Ciccarelli said subprime financing has been a "major driver" of same-store sales growth for Carmax recently. Slower growth in the category will hurt same-store sales.
The percentage of CarMax vehicles financed by third-party subprime lenders fell to 13.8 percent in the recent period, from more than 18 percent a year earlier, the company said.
Those catching a cold among auto retailers Tuesday included Lentuo International Inc.
LAS, off more than 7 percent; Asbury Automotive Group Inc.
ABG down 3 percent and Lithia Motors Inc.
LAD down nearly 4 percent.
Penske Automotive Group Inc.
PAG and AutoNation Inc.
AN each fell more than 2 percent.
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