The nation’s largest used-car dealer is turning to online financing to try and improve the slow in demand caused in part by cheaper fuel prices and a strong job market.
CarMax is planning to unveil a new online financing solution for 10 stores in the United States to help them pre-qualify for a loan. This process would come before a visit to the store, and presumably would help customer conversion rates.
The online option immediately followed CarMax’s report on Tuesday that revenue and profit was lower than expected, as was store traffic and unit sales. CarMax’s sales woes track with other used car dealerships across the country who are struggling, while new car dealerships are thriving.
In late 2015, AutoNation – the largest American new car dealer – launched its own online financing option, which allowed customers to go online to get a value on their trade-in, determine car payment amounts and apply for credit.
While the initiative is still in its infancy, experts have certainly warmed to the idea, saying that conveniences like online financing tend to lead toward more customer conversions.
Let us know! Would you consider an online pre-qualifying option for your dealership, or are you already using one?