KMX
CarMax Inc.
Is KMX Halal?
Used car retailer with significant auto finance operations involving riba.
What You Should Know
CarMax operates used car superstores. While vehicle sales may be permissible, CarMax Auto Finance generates substantial interest income from auto loans. Its May 31, 2026 Form 10-Q reports $26,626.898 million of assets, $18,161.025 million of interest-bearing debt, $132.223 million of cash, $263.919 million of receivables and $8,013.519 million of quarterly revenue. Debt/assets is 68.21%, liquidity/assets is 61.89% and disclosed interest/fee income is $460.9 million, so the examined financial and activity screens fail.
⚠️ Concerns
- •Large portion of profit from interest-based financing
- •Auto lending is core to business model
- •High debt and loan-securities balances
- •Securitization exposure
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-05-31; calculated 2026-07-15.
18,161.025 / 26,626.898
16,478.53 / 26,626.898
396.142 / 26,626.898
460.9 / 8,013.519
- Financial
- Fails
- Overall
- Fails
Debt/assets is 68.21%, liquidity/assets is 61.89%, receivables-plus-cash/assets is 1.49% and disclosed interest/fee income is 5.75%; debt, liquidity and income exceed the examined limits and the auto-finance activity screen fails.
- Financial
- Fails
- Overall
- Fails
Debt/assets is 68.21% and liquidity/assets is 61.89%, above the examined MSCI limits; the core auto-finance activity screen also fails.
- Financial
- Fails
- Overall
- Fails
Debt/assets and identifiable conventional cash and auto-loan securities exceed the examined Malaysia limits; the auto-finance activity proxy fails as well.
- Financial
- Not calculated
- Overall
- Fails
A properly licensed and reproducible historical market-cap series is not stored; market-cap methods cannot cure the debt, liquidity, income or activity failure.
Business-activity disclosure
CarMax sells used vehicles but operates CarMax Auto Finance, which originates and services auto loans funded through securitizations and other debt. The retained qualitative analysis treats interest-based auto finance as a core riba concern.
Limitation: CarMax reports interest and fee income within CAF metrics rather than a school-neutral prohibited-income taxonomy; the disclosed $460.9 million is used as a conservative proxy.
Purification
CarMax discloses $460.9 million of interest and fee income from auto finance, but no scholar-approved purification percentage is asserted for the lending business.
Inputs, assumptions and primary sources
- Amounts are USD millions from CarMax's May 31, 2026 Form 10-Q.
- Interest-bearing debt is $18,161.025 million total debt, including long-term debt and non-recourse notes payable; operating leases are excluded.
- Cash is $132.223 million. Auto loans held for investment of $15,689.952 million, auto loans held for sale of $618.979 million and beneficial interests of $37.376 million are included in interest-bearing securities; restricted collection cash is excluded.
- Quarterly net sales and operating revenues are $8,013.519 million. Disclosed interest and fee income from CarMax Auto Finance is $460.9 million and is used as a conservative non-compliant-income and activity proxy; this is not an official classification.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
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