Car-Mart, a US-based used vehicle dealer, predicts that used car prices will continue to be high through the near future and expects tax returns to be higher for their customers possible leading to higher sales.
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.
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