Car-Mart to launch online credit application

by Jeff Della Rosa (JDellaRosa@nwabj.com) 106 views 

America’s Car-Mart expects used vehicle prices to remain elevated through tax season and tax refund amounts its customers receive to increase from last year as the Bentonville-based buy here, pay here used car dealer works to improve its website, executives said.

In a recent earnings call, Jeff Williams, president and CEO, said the higher refunds should more than offset any issues related to customers not withholding enough of their income for taxes, resulting in a net increase in refund checks. Through late February, the company had yet to see an impact on sales from tax refunds.

The company is working to add a credit application to its website and should be available in the next few months, Williams said. It will also add pictures of vehicles and other features. He doesn’t expect the improvements to be a big investment for the company, which has been working on them for the past six or seven months.

Vickie Judy, chief financial officer, said vehicle quality has helped to drive traffic at dealerships, and the price of vehicles has risen as a result of higher wholesale vehicle prices. The prices rose 2.9% in 2018, according to J.D. Power Valuation Services.

Vehicle quality has helped to reduce losses related to net charge-offs as customers will keep vehicles that operate properly, Judy said. Also, the company’s collections efforts have improved because of better visibility into the number of calls being made. Judy explained the next step is to improve call quality.

The company in December amended its revolving credit agreement to increase its borrowing power, from $200 million to $215 million, and reduced the interest by 10 basis points through May, Judy said. The terms were extended to December 2021. Company debt was $171 million at the end of the third quarter.

The company reported Feb. 19 that earnings for the third quarter of fiscal 2019, which ended Jan. 31, fell 18.6% to $10.88 million, or $1.55 per share, from $13.36 million, or $1.82 per share, in the same period in fiscal 2018. Revenue rose 9.4% to $161.05 million.

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