The CarMax chain of 38 used-car and new-car superstores is adopting a posture of independence from its Circuit City Stores parent and, like a kid moving away from home, is taking potshots at what it calls "pressure practices" of traditional dealers.

Shareholders of Circuit City Stores approved the spinoff of CarMax, Inc., into a fully independent entity at a special meeting September 10 in Richmond, Va., headquarters of each.

Founded in 1993, CarMax has steadily grown into a national network whose 38 stores in 12 states specialize in preowned vehicles but they also have 18 new-car franchises. Its net profit improved from a $9.3 million net loss in fiscal 1997 to a $90.8 million profit in fiscal 2002 on revenues of $3.52 billion.

In a proxy statement on the separation agreement, CarMax called its F&I practices more customer-friendly than those of traditional dealers. Among the F&I techniques it ascribes to conventional dealers are "Frequently offering inflated financing terms to customers and not clearly separating components of the financing transaction," and paying sales and F&I personnel "higher commissions for negotiating higher prices and for steering customers to vehicles with higher gross margins."

CarMax says it sales consultants are paid a fixed dollar amount per vehicle sold, offer "low fixed prices on extended warranties" and review all terms, rates and options with customers rather than in a lump sum manner.

CarMax uses as F&I providers an inhouse lending unit; Bank of America; and the captive financing subsidiaries of six automakers with which it has franchises -- GM, Ford, DaimlerChrysler, Nissan, Toyota and Mitsubishi. Its nonprime lenders include TransSouth Financial, Wells Fargo Financial Acceptance and AmeriCredit Financial Services.

CarMax President W. Austin Ligon says the company plans to open 22 to 30 stores over the next four years. The group has entered nine midsize markets, such as Raleigh, N.C., and San Antonio, Texas, a policy which it believes offers the highest return on investment of all store types.

Approximately 87 percent of CarMax's annual sales emanate from used vehicles. Ligon, 51, joined Circuit City in 1990 as corporate planning vice-president. He helped develop the Carmax concept, becoming its president in 1995. Previously an executive with Marriott Corp., Ligon was paid a $603,653 salary in fiscal 2002, plus a bonus of $562,500.