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CORRESP
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March 16, 2007

VIA OVERNIGHT COURIER

United States Securities
and Exchange Commission

Division of
Corporation Finance

450 Fifth Street,
N.W., MS 03-08

Washington, D.C.
20549

Attn:
William Thompson, Branch Chief

Re:
Copart, Inc.

Form
10-K for Fiscal Year Ended July 31, 2006

Form
10-Q for Fiscal Quarter Ended October 31, 2006

Filed
October 31, 2006 and December 11, 2006

File No. 0-23254

Dear Mr. Thompson:

On behalf of
Copart, Inc. (the “Company”), I submit this letter in response to the comment
letter dated February 27, 2007 from the staff (the “Staff”) of the Securities
and Exchange Commission (the “Commission”) relating to the Company’s Form 10-K
for Fiscal Year Ended July 31, 2006 (the “Form 10-K”) and the Form 10-Q for
Fiscal Quarter Ended October 31, 2006 (the “Form 10-Q”).

In this letter, I
have recited the comments from the Staff in italicized, bold type and have
followed the comment with the Company’s response. Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Form 10-K or
Form 10-Q, as applicable.

Form
10-K for Fiscal Year Ended July 31, 2006

Note 3
— Discontinued Operations and Goodwill Impairment, page 62

We
have considered your response to comment two in our letter dated February 6,
2007.  In view of the guidance in SAB
Topic 5:E and FIN 46 (R), please tell us in detail how you concluded that the
legal transfer of ownership of the Motors Auction Group (MAG) business and
related assets resulted in a divestiture and deconsolidation for accounting purposes.

The Company
supplementally provides a more detailed background to the Staff relating to the
disposition of its MAG operations to provide proper context for an evaluation
of the Company’s accounting and disclosures.

The Company had two business segments at the beginning
of its fiscal year ended July 31, 2006.
Salvage Vehicle Sales, which comprise the Company’s principal operations
for the sale of vehicles with “salvage” title utilizing the Company’s
proprietary VB2 technology, and MAG (Motor Auction Group).  There were six MAG operating locations (the “MAG
operations” or “discontinued operations”), which conducted weekly live auctions
of used vehicles, primarily with clean (i.e. non-

United States Securities and Exchange Commission

Re: Copart, Inc.

March 16, 2007

Page 2

salvage) title.  These live auctions were open to the general
public and were managed on a proprietary information technology system called
MAX [Motors Auction Exchange].  The Company
acquired the MAG operations at various times in years prior to fiscal
2006.  During the second quarter of
fiscal 2006, the Company determined its MAG operations were no longer strategic
to the continued growth of the Company, and as a result, decided to completely
dispose of the six MAG operating locations.
Throughout the remainder of fiscal 2006, the Company sold three of the
MAG operations to third parties and converted three of the locations to its
Salvage Vehicle Sales segment.  In
addition, all MAG segment management was terminated and the MAX system was
abandoned in connection with the Company’s exit of this business segment.

SAB Topic 5:E
states:

In assessing whether the legal transfer of ownership of one
or more business operations has resulted in a divestiture for accounting
purposes, the principal consideration must be an assessment of whether the
risks and other incidents of ownership have been transferred to the buyer with
sufficient certainty.

When the facts and circumstances are such that there is a
continuing involvement by the seller in the business, recognition of the
transaction as a divestiture for accounting purposes is questionable. Such
continuing involvement may take the form of effective veto power over major
contracts or customers, significant voting power on the board of directors, or
other involvement in the continuing operations of the business entailing risks
or managerial authority similar to that of ownership.

The
Company advises the Staff that it has legally and contractually transferred all
rights, obligations and privileges of ownership of the MAG operations through
the three dispositions and has no remaining involvement in the operations of
the discontinued operations.  The Company
(i) did not retain any equity interest or call options in the discontinued
operations, (ii) did not, through the terms of seller financing or by any other
means, retain the ability to influence the operating and/or financial policies
of the discontinued operations, (iii) does not have any voting rights on the
board of directors of the buyers, and (iv) is not a party to any continuing
contracts or agreements, other than the promissory notes between the Company
and the buyers, relative to the discontinued operations.

SAB Topic 5:E also
states:

Other circumstances may also raise questions concerning
whether the incidents of ownership have, in substance, been transferred to the
buyer. These include: (i) absence of significant financial investment in the
business by the buyer, as evidenced, for instance, by a token down payment,
(ii) repayment of debt which constitutes the principal consideration in the
transaction is dependent on future successful operations of the business; or
(iii) the continued necessity for debt or contract performance guarantees on
behalf of the business by the seller.

The Company sold one of
its six discontinued MAG operating locations through seller provided financing
of $12 million with no down payment.  In
this transaction, the seller provided financing is collateralized by real estate
with an estimated fair value of $6.6 million and personal guarantees by two
high wealth individuals with a combined net worth, based on compiled financial
statements provided to the Company, of approximately $91 million.  These personal guarantees are both joint and
several.  The Company’s only potential
recourse is against the real estate that secures the seller financing and the
personal guarantees provided by the buyers.
There is no recourse

United States Securities and Exchange Commission

Re: Copart, Inc.

March 16, 2007

Page 3

against the MAG
operations and the repayment of the seller financing is not dependent on the
MAG operations.  Further, the Company has
not guaranteed any debt, financing or contracts on behalf of the discontinued
operations.  Finally, the Company hereby
states that it does not intend to reenter the public auction (MAG) business
irrespective of the buyer’s ultimate payment of its debt obligation.

Tell
us in more detail how you concluded that the disposed component is properly
classified as discontinued operations pursuant to the provisions of paragraph
42 of SFAS 144 and the related guidance in Example 5 of EITF 03-13.

[Reproduced
from the Company’s response letter dated February 15, 2007] The Company
supplementally informs the Staff that the Company retains no direct cash flows,
whether through migration or continuation (as defined in EITF 03-13) or by any
other means, associated with the revenue-producing or cost-generating
activities of the disposed business.
Further, the Company has no continuing involvement in the operations of
the discontinued operations, other than that of a mortgagee, and the Company
(i) did not retain any equity interest or call options in the discontinued
operations, (ii) did not, through the terms of the seller financing or by any
other means, retain the ability to influence the operating and/or financial
policies of the disposed business, and (iii) is not a party to any continuing
contracts or agreements, other than the finance agreement between the Company
and the buyers, relative to the discontinued operations.

The
Company’s analysis as to whether the seller-financing results in significant
continuing involvement by the Company follows.

Paragraph
42 of SFAS 144 states the following:

The results of operations
of a component of an entity that either has been disposed of or is classified
as held for sale shall be reported in discontinued operations in accordance
with paragraph 43 if both of the following conditions are met: (a) the
operations and cash flows of the component have been (or will be) eliminated
from the ongoing operations of the entity as a result of the disposal
transaction and (b) the entity will not have any significant continuing
involvement in the operations of the component after the disposal transaction.

EITF 03-13 further clarifies the following in
paragraph 4 (emphasis added):

The Task Force reached a
consensus on Issue 1 that the evaluation of whether the operations and
cash flows of a disposed component have been or will be eliminated from the
ongoing operations of the entity depends on whether continuing cash flows have
been or are expected to be generated and, if so, whether those continuing cash
flows are direct or indirect.
Continuing cash flows are cash inflows or outflows that are generated by
the ongoing entity and are associated with activities involving a disposed
component.  If continuing cash flows are
generated, the determination as to whether those continuing cash flows are
direct or indirect should be based on their nature and significance.  If any continuing cash flows are direct, the
cash flows have not been eliminated and the operations of the component should
not be presented as a discontinued operation.
Conversely, if all continuing cash flows are
indirect (that is, not direct), the cash flows are considered to be eliminated
and the disposed component meets the paragraph 42(a) criterion to be considered
a discontinued operation.  The
assessment as to whether continuing cash flows are direct cash flows should be
based on management’s expectations using the best information available.

United States Securities and Exchange Commission

Re: Copart, Inc.

March 16, 2007

Page 4

The only continuing
operating cash flows from the discontinued MAG operations will be the interest
payments made on the seller-provided financing.
These cash flows are considered indirect and therefore the Company has
concluded that the operations and cash flows of the discontinued MAG operations
were eliminated from the Company.

The Company also
considered the guidance in paragraph 9 of EITF 03-13, which states (emphasis added):

If the operations
and cash flows of a disposed component have been (or will be) eliminated from
the ongoing operations of an entity as a result of a disposal transaction (see
paragraphs 4-8 for guidance on making that determination), an entity should
evaluate whether the ongoing entity will have significant continuing
involvement in the operations of the component after the disposal
transaction.  The Task
Force reached a consensus on Issue 2 that continuing involvement in the
operations of the disposed component provides the ongoing entity with the
ability to influence the operating and (or) financial policies of the disposed
component.  The retention of risk or the
ability to obtain benefits should be considered in the overall evaluation of
whether the ongoing entity has the ability to influence the operating and (or)
financial policies of the disposed component.
However, the retention of risk or the ability to obtain benefits
associated with the ongoing operations of the disposed component does not
indicate by itself that the ongoing entity has the ability to influence the
operating and (or) financial policies of the disposed component resulting in
continuing involvement.  An
interest in the disposed component or the existence of a contractual
arrangement or other type of arrangement with the disposed component should be
evaluated to determine whether the ongoing entity has continuing involvement
with the disposed component.

[End of Reproduced
Content from the Company’s response letter dated February 15, 2007]

The
Company also considered the guidance in Example 5 of EITF 03-13, in which the
following example is analyzed:

An
entity owns several commercial buildings that are being leased to third-party
lessees. The buildings are of the same type and are located in the same
geographic region. For that entity, the building is the lowest level at which
the operations and cash flows can be clearly distinguished, operationally and
for financial reporting purposes, from the rest of the entity. Therefore, each
building is a component of the entity. The entity commits to a plan to sell one
of the buildings. The building is classified as held for sale at that date.

The
ongoing entity will purchase another commercial building in the same geographic
region as the sold building. The ongoing entity does not anticipate that any
lessees from the sold building will terminate their leases and migrate to the
new building; however, the ongoing entity believes that certain lessees from the
sold building will also be lessees in the new building. The seller provides the
buyer financing in the form of a 5-year loan equal to 20 percent of the
purchase price, which provides the seller with recourse to the buyer’s assets.
The loan bears a market rate of interest, the rights conveyed are customary for
these types of loan agreements, and the buyer is considered to have high credit
quality. The ongoing entity will not otherwise be involved in the operations of
the disposed component.

This example differs
from facts in the Company’s transaction in that 1) the seller in the example
financed 20% of the purchase price and 2) the seller in the example continued
in the activity of the discontinued operations through other business
activities.  The example evaluates
whether

United States Securities and Exchange Commission

Re: Copart, Inc.

March 16, 2007

Page 5

the nature of the
financing creates a continued involvement in the business and concludes that it
does not because (i) the agreement is not significant to the overall operations
of the disposed component, since the loan amount is equal to 20 percent of the
purchase price, the loan is recourse to the buyer’s assets, and the buyer is
considered to have high credit quality, (ii) the extent to which the ongoing
entity is involved in the operations of the disposed component is limited to
the loan agreement, and (iii) the rights conveyed by the loan agreement do not
enable the ongoing entity to exert significant influence over the disposed
component.

With respect to
(ii) and (iii) above, the Company retained only those rights normally enjoyed
by a mortgagee.  The Company has no
ability through the financing agreement, or otherwise, to exercise any
influence or control on the operational or financial decisions of the
buyer.  With respect to item (i) above,
the example suggests that a lower percentage of seller provided financing is an
indicator of an absence of seller involvement.
The Company does not disagree.
However, the example does not indicate that a higher percentage of
seller provided financing alone would lead to a presumption of continued seller
involvement.  The Company has evaluated
the specific facts and economic substance of the seller financing, and as stated
above, the seller provided financing is substantive as it is secured by real
estate with an estimated fair value of $6.6 million and is backed by personal
guarantees from two high wealth individuals that are considered credit
worthy.  Further, the interest rate for
the notes, based on an evaluation performed by an independent appraiser, is
appropriate for the risk.

Based on the above analysis, the Company concluded
the requirements of paragraph 42 of SFAS 144 and related guidance in Example 5
of EITF 03-13 have been met and presentation of the disposed MAG operations as
discontinued operations is appropriate.

Please
address the following in your response:

·                  How you concluded that the risks and incidents of
ownership have been transferred to the buyer despite the apparent absence of
any significant financial investment in the business by the buyer,

As note