CarMax Taps AI and Tech to Save $150M Over 18 Months

CarMax bets on AI to cut $150M in costs. Here's the sales playbook behind it

CarMax expects at least $150 million in cost savings over the next 18 months by leaning on AI and targeted tech moves. The CFO highlighted projects that improve customer experience and efficiency-like the AI virtual assistant Skye and its agentic upgrade, Skye 2.0.

They're retiring legacy systems, trimming software licenses, and even using AI to review third-party contracts more often. A portion of the savings will be redirected into growth activities tied to sales.

Key takeaways for sales leaders

• AI-driven efficiency is funding growth: cost out, sales in.
• Customer-facing AI (Skye) + rep-facing AI (365 Copilot, coding tools) speed the funnel and reduce overhead.
• License and platform consolidation matters-fewer seats, fewer tools, same output.
• Despite a 6% sales decline and 5.4% unit drop in Q2, leadership is leaning into market share and earnings growth.

What CarMax is actually doing

• Deploying AI assistants: Skye for customers, Skye 2.0 for more complex, agentic tasks.
• Retiring legacy systems and eliminating unused features to cut recurring costs.
• Reducing license counts where adoption is low or redundant.
• Using AI to review third-party contracts more frequently to find savings and tighten terms.
• Rolling out Microsoft 365 Copilot and AI coding tools to boost employee productivity.
• Preventing platform sprawl by consolidating where possible.
• Shifting from "build" to "optimize and rationalize" after an omni retail transformation.

Why this matters for sales

Every dollar cut from non-essential software, manual work, or legacy overhead can be redirected into pipeline: more coverage, faster follow-up, cleaner handoffs, better offers. AI assistants shrink time-to-answer for customers and reps, improving conversion and CSAT at the same time.

Contract reviews and platform consolidation free budget for channels and headcount that move revenue. The bigger idea: operational clarity creates sales velocity.

A practical plan you can run this quarter

• Audit licenses and features: cut unused seats, retire duplicate tools, and standardize on one stack for CRM, enablement, and messaging.
• Stand up a customer-facing AI assistant for FAQs, trade-in questions, financing basics, and appointment setting. Route qualified chats to reps fast.
• Equip reps with an AI workbench: email drafting, call recap, next-step suggestions, pricing template checks, and data lookups inside the CRM.
• Automate contract and vendor review with AI to flag renewal dates, price escalators, low-utilization modules, and better alternatives.
• Reinvestment rule: pre-commit 50% of verified savings to sales capacity (SDRs, media, partner MDF, targeted offers) with clear attribution.
• Run a 90-day pilot: pick two teams, measure baseline vs. post-implementation, then roll out with a lightweight playbook.

KPIs to track

• Conversion rate by touchpoint (chat, web form, store visit, follow-up).
• Speed-to-lead and response time SLAs.
• Rep time spent selling vs. admin.
• Software spend per rep and per closed deal.
• Sales cycle length and show rate.
• CAC and LTV/CAC trend after reinvestment.

Pitfalls to avoid

• Tool sprawl: adding AI without retiring anything.
• Vanity metrics: track qualified conversions and revenue, not just chatbot volume.
• Compliance gaps: review prompts, outputs, and data access with legal and security.
• No reinvestment plan: savings without a sales allocation won't move your number.
• Off-brand assistant tone: give it a style guide and escalation rules.

Industry context

Across auto, generative AI is being applied to customer support, simulations, supply chain, software development, and predictive maintenance. Industry research indicates many auto leaders now have a clear approach for integrating AI into long-term strategy.

For more background, see resources from IBM's Institute for Business Value on auto and AI here and Microsoft 365 Copilot details here.

Leadership signals

"The investments in technology, systems and processes that we have made as part of our omni transformation will allow us to substantially reduce spend," said EVP and CFO Enrique Mayor-Mora, noting some savings will be directed to sales-linked investments.

CEO Bill Nash underscored focus on sales growth, market share, and multi-year earnings gains, while keeping the organization nimble in a tough environment.

Next step

If you're running a sales org, build your 90-day AI pilot and a reinvestment model now. For structured, job-focused learning paths, explore Complete AI Training by job.