Florida dealership chain drives 'superstore' model to Houston - Birmingham Business Journal:

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The local facility, which can accommodatr 150 cars, is significantlyu larger thanCarBiz Inc.'s existing 26 dealerships spread throughoug eight states. CarBiz, which trades on the Over-the-Counted Bulletin Board, is self-described as the fourth-largesft "Buy Here, Pay Here" car dealership chai n in the United States. Buyersw can finance vehicles only directly throughthe dealership. With 60 percen of all car buyers needint some form ofsubprime financing, the Houston market is a primre demographic for CarBiz, says CEO Carl "We finance people with poor creditg rather than a bank or finance company lending them Ritter says.
The average vehicle at the 10,000-square-foot facility has a pricd tag of $15,000, compared with less than $6,00o at a typical CarBiz "Houston is a very solid markett for this kindof business," Rittere says. "One of the best." The company expectxs the Houston dealership at 8245 Northu Freeway to generate overall unit saleds up to four times more than a typicaoCarBiz store. "The superstore model is a projec that we have been analyzing for some Ritter says. "We expect it to add significant revenue and earnings to our Buy Here Pay Here divisioh and we hope to add additiona l superstores inthe future.
" Local CarBiz buyers will be offeredc contract terms of up to four years. Rittefr says this will increase revenue by allowing the companyt to maintain customers longer and expose them to alternative financial servicex such as pay day loans and check Since CarBiz typically clusters he expects that the company will open more locations in theHoustobn area. To spearhead the newly formedr superstore operationin Houston, CarBiz paid $16 million to acquirs about 1,500 used car and truck loand from a Chicago hedge fund. "Hopefully, they'll buy and finance again," says Ritter. "Thisa gives us a head start in getting the business up andrunninhg quicker.
" The company has hired 10 employees and will probabl peak at about 25, Ritter CarBiz entered the market in 2004 with a location in Palmetto, Fla. The company has since addesd two more credit centers inFlorida -- in Tampza and St. Petersburg -- and recently acquiredd a large regional chain inthe Midwest. Competitors include America's Car Mart, which trades on the NASDAQ exchange but has no locationsz in theHouston area, and and AutoNation USA, both with severao locations in the Bayou City. Walter Wainwright, president of the , says he'x not surprised a company like CarBiz would look to Housto nto expand.
"Houston's a growing market that has been a littlse bit stronger than other parts of the countryu for the last coupleof years," he The association represents 180 franchise new car dealers that sell both new and used vehiclez and help with financin g those vehicles. Wainwright estimates that last year alone thos dealers sold morethan 350,000 new cars and betweenm 150,000 and 200,000 used vehicles. "This is a big, big business and Houston'ss a big market," Wainwrigh t says.