In a sign of rising competition for less creditworthy borrowers, used car dealer CarMax said it would begin offering subprime auto loans in the fourth quarter of its fiscal 2014.

Until now, CarMax has outsourced financing for its subprime customers, but it said today it would launch a test program that will make a projected $70 million of loans over the next 12 months. These subprime loans would be funded separately from its current loan portfolio and would not be included in the company’s current public securitization program.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.