Walmart is Now Selling Cars

Walmart (NYSE: WMT) is planning to compete with car dealers. If all goes as plan you will be able to shop for a new or used car; as well as milk and underwear, at some supercenters later this year.

Sales in conjunction with an online platform called Car Saver; and chains like Auto Nation  (NYSE: AN), are scheduled to begin at select supercenters on April 1, Automotive News reported. The car sales are scheduled to be tested at 25 Walmart locations in Dallas, Houston, Phoenix and Oklahoma City.

There will apparently be no sales people at Walmart. Instead you will use Car Saver’s digital platform to select, finance and insurance vehicles. The financing will be offered through a number of lenders including Ally Financial. Car Saver buyers that finance vehicles through Ally will receive a $100 gift card.

The customers will then pick the car up at a dealership which will get a $350 fee for participating in the program. All of the Auto Nation dealerships in Phoenix, Houston and Dallas are planning to participate in the program. Since Auto Nation does not operate in Oklahoma City, competitors will handle the program in that community.

Walmart wants to Sell Cars through a Kiosk

Vehicles sold through retailers: are not new Costco Wholesale (NASDAQ: COST) and Walmart’s Sam’s Club subsidiary have been selling vehicles to members for years. Tesla Motors (NASDAQ: TSLA) only sells cars through its stores – a business model pioneered by Packard before World War II.

No other dealerships were named in the Automotive News story. The deal could be huge for Auto Nation and Car Saver because there are over 4,000 Walmart stores nationwide. It goes without saying that this program might be adapted to other retailers such as Kroger (NYSE: KR); America’s largest grocer.

Kroger operates several grocery chains including Ralph’s, Harris Teeter, King Soopers, Smith’s and Fred Meyer. Like Walmart Kroger also operates supercenters in parts of the country. Other companies that might participate include Target and Meijer which operates supercenters throughout the Midwest.

Automotive News did not say what brands of insurance will be offered through the CarSaver program. CarSaver is a privately held company owned by Sean Wolfington, the co-owner of Honda of Los Angeles and Chad Collier, a former car dealer.

Wolfington, the company’s CEO, claimed that buyers who use CarSaver kiosks will save around $3,000 off the sticker price. He presented no evidence to verify his claims.

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