CEO Says BNPL Helps Consumers Pay Big Bills to Repair Aging Cars

As consumers struggle to make ends meet, the burden of unexpected car repairs can be overwhelming. 

David Meniane, CEO, said in a recent interview that, though it’s tough to gauge where we are in the macro-economic cycle, there are some longstanding trends in place.  

Consumers are getting ever-more pinched as interest rates and debt burdens creep up. Keeping the wheels on the road is a challenge. 

“Monthly payments are going up,” he said of the loans consumers take out to finance their vehicles, “even as the value, or the car prices, are coming down.” The loan terms themselves are getting longer, as consumers try to make that debt more affordable, and at the end of the loan, rolling over into a new car, with rates still high, may be less alluring.  

The end result is that the average car out there is skewing older, to more than 12 years on average. Repairs are part of keeping older vehicles running and safe.

“The average age of a car might be 12 years,” Meniane said, “but there are perfectly great cars out there that are 18 to 20 years old.”

The aftermarket — where operates as an online provider of all manner of auto parts and accessories — is ripe for a digital, eCommerce overhaul, Meniane said.  

The conversation with PYMNTS came just days after the company posted its 14th consecutive quarter of growth. And as has been documented here in recent months, the platform approach has been a data-driven one that seeks to streamline the parts-buying experience for both the do-it-yourself auto enthusiasts and the do-it-for-me customers who want to tap into the company’s network of auto repair partners. (The do-it-for-me market, he said, represents a significant opportunity, as it is several times larger than the DIY market.)

In the case of the DIY audience, the eCommerce platform offers instructional videos and a staff of 150 experts reachable by phone to help guide customers through a repair. 

The typical DIY customer, he said, might be imagined as the “Mechanic Mike” who “lives in Texas that has two kids, probably one or two cars, usually a pickup truck like the Ford F150 or Chevy Silverado.”

These customers, he said, take pride in maintaining their vehicles and ensuring the safety of their loved ones.

BNPL Eases the Pressures

The majority of U.S. consumers live in the paycheck-to-paycheck economy, which means that the unforeseen car repair — or even the anticipated one — can be dauntingly expensive. Frequently, getting rotors and brake pads, for example, has an undercurrent of urgency, which can make paying for it all stressful.

Indeed, “our brakes business,” Meniane said, “is our fastest growing segment.”

But there are a significant number of consumers for whom a $500 expense might be prohibitive, where disposable income simply is not on hand., he said, “has been aggressively offering buy now, pay later options … that allow the paycheck-to-paycheck consumer to pay over six weeks.”

Buy now, pay later (BNPL), he said, allows customers to spread the cost of repairs over time, with only 25% due each installment. This flexible payment plan aims to alleviate the immediate financial strain on customers while ensuring their vehicles receive the necessary repairs. A premium set of pads and rotors, he said, might be offered on the site for $400; the BNPL user pays $101 every two weeks, so the total added cost for the service is about $4.  

Asked by PYMNTS how the company gauges and adjusts for risk, he said that the company’s financial partners take on that risk, and given the short-term duration of the BNPL offers, there have not been any issues tied to the performance of those arrangements. 

Looking ahead, he told PYMNTS that there is room to explore cross-selling possibilities. The data and analytics has, he said, lend themselves to “start predicting what parts are scheduled to fail depending on what area of the country you live in. And so what we want to become is more than just about selling the part,” he said. “it’s about giving you all the information, and it’s predictive maintenance information.” 

He noted to PYMNTS that the app-driven approach by, marked by 80% of the firm’s business coming through mobile channels, lends itself to a proactive approach that broadens and deepens customer relationships.

“If you put the customer at the center of everything you do,” he said, “the economic environment may be challenging, but there are plenty of opportunities for us to be lean, smart and to deliver value.”