Case Study

CarMax Auto Finance

This case study details a successful implementation project with CarMax Auto Finance (CAF), the finance arm of CarMax, the largest used car retailer in the US.
Front of the CarMax dealership building

Image: CarMax

Project Overview

CarMax is the largest used car retailer in the US, operating 230 stores across the country and employing more than 30,000 associates. CarMax sold 1.6 million vehicles in its last fiscal year (fiscal 2022) across its retail and wholesale business. In fiscal 2022, CarMax Auto Finance (CAF), headquartered in Kennesaw, GA, serviced approximately 1.1 million customer accounts in its $15.65 billion portfolio of managed receivables, and more than 40% of CarMax’s retail used unit vehicle sales were financed through CAF. CarMax offers reliable, trustworthy, “no-haggle” purchasing, providing personalized, premier customer experience in an industry that traditionally has not. This warm and welcoming ethos is also reflected in their corporate culture, and they have been recognized as one of FORTUNE magazine’s “100 Best Companies to Work For” for 18 consecutive years.

In 2017, CAF engaged Alfa to help achieve its vision for modernization and strategic growth. CAF saw that Alfa Systems would lay a solid foundation for decades to come, and they were impressed with Alfa’s focus on technology, commitment to innovation, and dedication to ESG.

According to Mike Callahan, who was CFO of CAF during the time of the Alfa modernization project:

"We knew we needed a modern platform that would support the growth of the business. Alfa fit the bill."

Mike Callahan

Definition and Scope

The definition phase of the project was undertaken between August 2017 and March 2018. During this process, Alfa assessed CAF’s requirements in detail, established how Alfa Systems would meet those requirements, and designed the implementation project to deliver this solution.

CAF wanted to replace their existing backend legacy systems that were no longer fit for purpose. The business was using a number of platforms, including an iSeries-based accounting and back-office contract management system, an in-house workflow management system, and a number of peripheral systems, spreadsheets, and databases. These systems had been in place for decades, and it was clear that they would not be able to support the business’s accelerated growth plans. It was imperative that Alfa Systems would be integrated with CAF’s ongoing systems landscape, including their new in-house CRM system, to ensure seamless communication between each platform.

For CAF, the most important business benefits of implementing a new system were:

  • Providing a strong foundation for rebuilding their web/mobile platform
  • Supporting compliance with increasing regulation at federal and state levels
  • Implementing customizable and detailed workflows and business rules
  • Improving transaction integrity for customers with real-time accounting functionality
  • Ensuring CarMax associates can use the system easily
  • Seamless integration with CarMax store transactions
  • Scalability and speed to market
  • Optimizing performance

A number of CAF’s core business processes were to be supported by Alfa Systems. These included: Originations; In-life servicing and change processing; Collections and Remarketing; and Payoff and Accounting.

Per Mike Callahan:

There were a couple of things about Alfa that really stood out. The integrated workflow engine allowed us to customize workflows to provide our customers a much more seamless experience. In addition, Alfa provides a modern platform that allows us to integrate well with boundary systems.

Mike Callahan


After the initial scope and definition phases, the Alfa project team began implementing an entirely new back-end system for CarMax Auto Finance in 2018. As a business operating nationwide for decades, CAF had a large portfolio of contracts to migrate to Alfa Systems, as well as numerous existing accounts, customers, and CarMax stores. Data migration was iteratively trialled and refined throughout the project, to ensure that the portfolio was moved safely from two source systems onto the new platform. This data migration was a great success, with a less than $10,000 write-off over the $15 billion portfolio and zero entity-load errors.

Thorough testing of Alfa Systems’ functionality in situ ran from 2019 until the go-live in 2021. The team undertook three dress rehearsals before the go-live, with two 24/7 rehearsals to precisely replicate the go-live event.

Mike Callahan emphasized:

One of my primary concerns going into the project was the migration of the existing portfolio into the new system. Our previous core system was not flexible and required manual interventions to correct an account when something went wrong. The data we migrated was far from straightforward. We didn’t just migrate account balances and interest rates. We migrated the original balance and ’played back’ all the transactions for the life of the account, so we had all the history in the new system. The fact that we were able to reconcile the migration as closely as we did was a testament to the hard work and competence of the teams.

Mike Callahan


CAF provided a stellar project team to work with Alfa on the software implementation. This partnership was fundamental to the success of the project. The relationship between the two teams was very strong throughout, and there was a high level of trust between them, ensuring close collaboration and communication.

We thought the Alfa team was a good cultural fit based on the sales process, but you don’t truly know until you get into the implementation. From day one, the Alfa team fit in seamlessly. I could not have been more pleased with the collaboration and partnership.

Mike Callahan

It was of utmost importance that the CAF team gain an extensive knowledge and understanding of the software. In addition to continued knowledge transfer through the close side-by-side work between Alfa and CAF across all areas of the implementation project, Alfa also provided training using a ‘train the trainer’ approach. This training, coupled with the CAF team’s excellent ownership and thorough training program, enabled them to teach users efficiently and effectively how to use the new system. CAF employees were kept abreast of the entire project and had their expectations effectively managed. As a result, CAF employees have been extremely satisfied with using Alfa Systems.

From Mike Callahan’s point of view:

Our associates love working in Alfa and it will only get better as the system will allow us to continue to evolve the associate and customer experience.

Mike Callahan


Implementing the new accounting and finance systems in Alfa Systems was a great success. CAF went live with Alfa Systems in October 2021. Following this, the project moved into a Post-Implementation Support period. This means that CAF is still actively supported by the Alfa implementation project team and Alfa’s Global Support Team. In 2022, CAF is targeting new initiatives such as implementing a customer service web portal and a new external general ledger, in addition to performing regular upgrades to the latest version of Alfa Systems to benefit from the new features Alfa is continually adding to the software. These projects will be supported by Alfa and the team looks forward to continuing the partnership.

Mike Callahan shared in reflection of the project:

We replaced a core system that had been in use for over 30 years. The peripherals built around that system were also replaced and were 15-20 years old. We’re extremely pleased that we have a modern foundation that we can continue to build upon. We are confident that the decision to partner with Alfa was the right one and are excited to have Alfa as a partner in this journey.

Mike Callahan