Bank of America is selling off-lease vehicles directly to consumers on the Internet and at used-car stores.
PriceAutoOutlet.com is Bank of America's e-commerce marketplace, listing for sale the bank's best off-lease vehicles. The marketplace is noteworthy because most financial institutions send off-lease vehicles to auctions and do not own used-car stores.
For example, Banc One Credit Co. leaves the task of getting rid of off-lease vehicles to dealers.
'We are an indirect lender; all of our business is generated by dealers,' said Charles Tapp, Banc One's national remarketing manager. 'They are the retail experts. We are the finance source.'
Bank of America spokeswoman Jerri Franz said the company is not trying to compete with dealers. She said the company found it can make more money on vehicles it sells at Price Auto Outlet than those it sends to auctions, but she would not reveal numbers.
About 60 percent of Bank of America's off-lease inventory goes to Price Auto Outlet stores and 40 percent goes to auction. Bank of America has about 850 vehicles in its inventory at any time, and the four lots sell about 500 vehicles a month, said Floyd Robinson, president of Bank of America's automotive group.
Price Auto Outlet used-car lots are in Linden, N.J.; Anaheim, Calif.; Orlando, Fla.; and Bethpage, N.Y. A fifth store in Greensboro, N.C., is listed on the Web site but is not fully operational.
Vehicles offered on the Web site are 2 to 3 years old and have received a 128-point inspection. Each comes with a six-month/6,000-mile limited warranty and a 72-hour replacement or exchange guarantee. Prices are not negotiable, and are said by the company to be below typical retail prices.
About 55 percent of the vehicles Price Auto Outlet sells are leased, 38 percent are loans and 7 percent are cash purchases.