The collaboration, announced Monday (Nov. 13), combines Dignifi’s financing and payment options with Dealer Pay’s payment technology, thus “simplifying the financing process and ensuring transparency,” the companies said in a news release.
The partnership offers financing options for repairs, maintenance, parts and accessory purchases, and vehicle service contracts, the companies said.
“DigniFi’s finance options, funded by WebBank, integrated with Dealer Pay’s advanced payment platform will enable dealerships to provide a one-stop solution for customers’ financial needs,” the release said.
“This will give customers a variety of payment options, providing flexibility for customers and driving business growth.”
PYMNTS looked at the challenges facing consumers as they try to keep their cars on the road earlier this year in a conversation with CarParts.com CEO David Meniane, who noted that drivers are getting ever-more pinched as interest rates and debt burdens creep up.
“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.”
Loan terms themselves are growing longer, as consumers work to make that debt more affordable. By the time the loan reaches its end, rolling over into a new car, with rates still high, may be less appealing.
As a result, the average car out there is skewing older, to more than a dozen years on average. Repairs are part of keeping these older vehicles safe and operational.
“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.”
CarParts.com, he added, “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, lets customers spread the cost of repairs over time, with 25% due each installment.
It’s a way to ease the financial strain on customers while making their vehicles receive the necessary repairs. A premium set of pads and rotors, Meniane said, might be sold on the CarParts.com site for $400; a BNPL user pays $101 every two weeks, so the total added cost for the service is about $4.
Meanwhile, recent PYMNTS Intelligence shows that 16% of U.S. consumers — or 40.5 million people — used BNPL for at least one payment in April.
“To these consumers, BNPL eased the acquisition of certain products or services they could not afford otherwise,” PYMNTS wrote. “Forty-three percent of BNPL users revealed they would have either delayed a purchase or opted for a cheaper product if BNPL was not available.”