One of America's biggest buy-here, pay-here auto retailers enters the Chattanooga market today with a new dealership at 4517 Hixson Pike.
America's Car-Mart, which operates 134 dealerships across the country, will open its first Chattanooga dealership at 9 a.m. today on the site of a former National Car Wash, which shut down a couple of years ago. Char Lunsford, a 17-year employee and former regional manager for America's Car-Mart, said the new dealership will help bring affordable, flexible-financing car buying to the Hixson area.
"We'll have about 40 to 60 cars on our lot at any one time," Lunsford said Monday. "We do our own financing on all of our cars so we're able to offer hard-working people access to late-model cars even if they have been turned down for credit at other dealerships. We're excited about Hixson simply because there are so few options available with what we offer."
Lunsford said the used cars on Car-Mart lots range in price from $4,000 up to $50,000 and buyers finance their purchases through Car-Mart with either weekly, biweekly or monthly payments.
Lunsford, who helped open Car-Mart's first Tennessee store in Jackson, Tenn., in 2005, said the company may add other locations in the Chattanooga market.
Buy-here, pay-here car retailers typically finance cars for buyers who don't qualify for conventional loans. The usually charge higher interest rates to cover the higher risk from such buyers.
In the fiscal year that ended April 30, America's Car-Mart reported net income of $21.1 million on sales of $489 million. In its most recent financial report, Car-Mart said the average vehicle sold this spring for $9,785.
The company opened 10 stores last year and is opening two more this month.
"Our new dealerships are performing well and we are excited to be adding great new towns to our footprint," said William "Hank" Henderson, president of America's Car Mart.
Despite such gains, however, the Car-Mart reported higher loan charge offs this spring than a year ago and the company's most recent quarterly results fell short of expectations.
"To us, success means that our customers have equity in their vehicle quickly and as a result own an asset at the end of the contract term," Henderson said in a report to shareholders in May. "Unfortunately, in many cases our competition does not share this same view of customer success and that market dynamic is certainly pushing up our default rates."
Started in 1981 in Bentonville, Ark., Car-Mart now has more than 52,000 customers financing their car purchases nationwide.