By Nathan Gomes

(Reuters) -CarMax is expanding its inventory of newer pre-owned vehicles, as U.S. President Donald Trump’s latest tariffs on new car imports are expected to significantly boost demand for more affordable options.

The company said it was prioritizing inventory in vehicles aged between six and 10 years, while pulling back from older models as more customers now prefer newer cars with modern driver-aid systems.

The move comes as Trump’s tariffs on automotive imports raise concerns over the affordability of new vehicles.

Industry experts say the tariffs could steer budget-conscious shoppers toward the used-car market.

In December, Carmax also boosted its supply of vehicles priced under $20,000.

But CarMax warned that the tariffs could drive up used-car prices, as well as vehicle reconditioning costs due to pricey parts.

Shares of the Richmond, Virginia-based company fell about 20% amid declines in the broader market.

CFRA Research analyst Garrett Nelson called the stock’s selloff a “buying opportunity”, adding that CarMax could be one of the biggest beneficiaries of the U.S. tariffs on automotive imports.

The company reported on Thursday a 6.7% increase in fourth-quarter revenue to $6 billion, slightly above expectations of $5.96 billion, according to data compiled by LSEG.

However, its quarterly profit fell below Wall Street estimates as higher borrowing costs kept some buyers from making big-ticket purchases.

Its adjusted profit of 64 cents per share for the quarter ended Feb. 28 missed analysts’ estimate of 65 cents.

(Reporting by Nathan Gomes and Utkarsh Shetti in Bengaluru; Editing by Leroy Leo and Shinjini Ganguli)