Dollar Thrifty Automotive Group Inc. is serious about the used-car business and wants 40 franchised used-car dealerships by the end of the year, the company said at the National Automobile Dealers Association convention.
The Tulsa, Okla.-based company also introduced a host of strategic partners who will provide the new chain of Thrifty Car Sales stores with everything from floorplan financing to extended warranties and Internet Web sites.
Joe Cappy, chairman of Dollar Thrifty Automotive Group, said the Thrifty Car Sales chain is an opportunity for auto dealers to capitalize on the Thrifty name. It also provides Dollar Thrifty with a cheaper outlet for the risk vehicles in its Thrifty and Dollar rental fleets.
Annually, the Thrifty fleet includes about 10,000 risk vehicles; the Dollar fleet has about 13,000.
Cappy, who was a top executive at both Chrysler Corp. and American Motors Corp., estimated his company can save $300 to $500 per vehicle by selling them at Thrifty Car Sales stores instead of at wholesale auctions.
Cappy said Thrifty Car Sales can succeed where the AutoNation USA and CarMax chains have failed. Instead of 'big-box' superstores, the Thrifty chain will consist of 'small-box' stand-alone stores with 50 to 100 vehicles per dealership. And instead of company-owned stores, Thrifty will depend on entrepreneurs - both franchised and independent dealers - who will use their own capital.
Jay Betz will oversee the chain as president of Thrifty Car Sales Inc., a sister company to Thrifty Car Rental. Both are based in Tulsa.
So far, the company has opened four dealerships and expects to have 10 by the end of the first quarter of 1999.
Betz said he expects to attract top automotive dealers by offering them a package that includes:
Retail financing from Bank of America Auto Group.
Floorplan financing through Bombardier Capital.
Vehicle certification and warranty programs from Automobile Protection Corp.
Computer support from Manheim Auctions Inc.
Thrifty Car Sales also plans to use the Dollar Thrifty remarketing team to give dealers a wide range beyond its risk vehicles, ranging from late-model vehicles to 6-year-old vehicles.
Betz said Thrifty Car Sales franchisees will pay an undisclosed one-time fee for the franchise and a royalty on each vehicle sold. They also will pay into a dealer-directed national advertising fund.