The Benefits of Using Cryptocurrencies at Dealerships
United Auto Sales of Anchorage, Ak., has caused a bit of a stir.
That’s because the high-volume, used-car dealership recently began accepting Bitcoin, and a couple other “cryptocurrencies” as a form of customer payment.
“It’s a good conversation starter,” said Arsalan Malik, the dealership’s general manager, in an interview with Fixed Ops Business. “We’ve gotten a lot of press from it.”
Malik has been a believer in digital currencies like Bitcoin for a while now. And, once he heard businesses in America’s lower 48 were accepting Bitcoin as payment—like Pizza Hut and Subway—the dealership general manager decided United Auto Sales, owned by Mohammad Malik, should follow suit. The Alaska facility has accepted Bitcoin since late last year.
“And we’ve sold six cars because of it,” the GM said. “We use it as a tool to benefit the customers a little bit more. Most of our customers use it as their down payment.”
The process works like this: the dealership utilizes an app called Coinbase, which many cryptocurrency users use for transactions. The dealership is able to see the amount in a customer’s digital “wallet,” and money is moved from a customer’s wallet to the dealership’s.
United Auto Sales also uses cryptocurrencies like Litecoin and Ethereum, but Arsalan Malik said the majority of his dealership’s customers—perhaps 70 percent—are familiar with Bitcoin. He said the “electronic money” is essentially a cross between PayPal and stocks.
“I think one Bitcoin is about $9,000 right now,” he noted. “And, say the [customer’s] down payment is $3,000. What we do is we just go on the Internet, see what the current market price is, and divide that. … And they send it to my ‘wallet.’ It’s basically a QR code that they just [use to] transfer it over. And we receive it instantly.”
While not all customers are yet comfortable with digital currencies—no client has used one to pay for a repair at United Auto Sales, Malik noted—the GM feels Bitcoin should eventually be considered by dealerships everywhere.
“Right now it’s more like an anomaly,” Malik said of Bitcoin. “Everybody’s just kind of talking about it and … getting intrigued. And I think, 1 or 2 years from now, everyone’s going to know about it, and really it’s the way of the future, and it’s just going to be a new form of payment.
“And, if you’re looking to sell more cars, then I would definitely add that to your dealership.”