Wal-Mart Enters Car-Selling Business
By Hannah Lutz. Published on January 23, 2017 .
Wal-Mart Stores Inc., the nation’s largest retailer, is jumping into car sales through partnerships with dealership groups, including AutoNation Inc., the nation’s largest new-vehicle retailer.
CarSaver, an online auto retail platform, will launch the program April 1 at about 25 Wal-Mart Supercenters in four markets: Houston, Dallas, Phoenix and Oklahoma City. Ally Financial is the program’s preferred lender.
CarSaver’s digital platform allows car shoppers to select, finance and insure a vehicle through its website or on a touch-screen kiosk, backed by bilingual auto advisers available by phone. Staffers at CarSaver Centers — set up inside Wal-Mart stores across from checkout lanes and alongside other services, such as vision centers and nail salons — will explain the car-buying program to Wal-Mart customers.
Customers will be able to select a new, used or certified pre-owned vehicle and apply for financing and auto insurance on the kiosk at the CarSaver Center, on their mobile device via CarSaver’s website or by calling an 800 number.
CarSaver then will connect customers with a local, certified dealer and schedule an appointment to visit the dealership. If a shopper doesn’t contact the dealership, an auto adviser reconnects with that shopper.
Upon making a sale, the dealership pays CarSaver a “success fee” of $350 in most states. No sale, no payment to CarSaver. Depending on state law, payment may come in the form of a subscription fee.
If customers use a lender that is integrated into CarSaver’s platform, dealers still receive dealer reserve, the retail margin dealerships make for arranging an auto loan. The dealership also evaluates trade-ins and sells any F BZ Results, which was acquired by what is now CDK Global; and VIN Solutions, which was acquired by Cox Automotive.
Assuming the launch is successful, CarSaver hopes to be in Wal-Mart Supercenters nationwide within two years, matching customers with 10,000 certified dealership partners.
Ally Financial signed onto the program as the preferred lender after participating in the pilot. Ally’s dealer clients can apply to join the program before other dealers, and they will receive a $1,000 credit per month for six months on their CarSaver bill. Customers who finance through Ally will receive a $100 Wal-Mart gift card.
The Wal-Mart program gives Ally an opportunity to build another channel and improve the customer experience, said Tim Russi, Ally’s president of auto finance.
“We’re all collectively trying to find a better customer experience. CarSaver is really taking a lead in trying to create that through the buying program to try to provide comfort, transparency, fairness to the consumer,” he said. “With the reach that Wal-Mart has, this could be a very large-scale buying program, and I think dealers are going to want to participate in it.”
AutoNation’s Mr. Cannon said the program offers the right balance for the dealer and the consumer. “I think it’s going to be successful, and we’re ready to get going.”
Hannah Lutz is a reporter for Automotive News.