FORT WORTH, Texas (June 26, 2002) — Cash America International Inc. has sold its Rent-A-Tire Inc. subsidiary to Los Angeles-based Rent-A-Wheel for about $3 million.
Rent-A-Wheel owners John Bowlin and Don Sebino intend to keep the Rent-A-Tire name in Texas and Arizona, but will expand the stores' product offerings and services to mirror those offered at the nine Rent-A-Wheel stores in the Los Angeles suburban area, Mr. Bowlin said.
“Our vision is to be the best rim shop in Texas,” Mr. Bowlin said, “by offering the latest wheel styles at affordable prices. Rent-A-Tire didn't offer a wide enough selection to be successful.”
In addition, he said, the consolidated purchasing power of the expanded group should help keep costs in line.
Rent-A-Wheel was started five years ago by ex-Marine Corps colleagues Bowlin and Sebino, both 34, who created the business concept after studying the market for tires and wheels in southern California, Mr. Bowlin said.
Rent-A-Tire operates 20 locations in Texas and two in Phoenix. Rent-A-Tire was part of Cash America's business since it opened four prototype stores in the Dallas-Forth Worth market in 1995. But in September 2001, Cash America decided to sell the business in order to concentrate on its core pawn business. At that time, the firm had 43 Rent-A-Tire locations, but subsequently it closed 21 of them.
Rent-A-Wheel offers a variety of tire and wheel packages at weekly rental rates. Customers may purchase products outright, Mr. Bowlin said, or opt to finance them for 52 weeks. Rent-A-Wheel offers various incentives to customers that can keep the lease-to-own prices in line with outright purchase prices, Mr. Bowlin said. For instance, customers who choose to pay off their balance receive a 50-percent discount off the balance; likewise, customers who make 10 consecutive payments get to skip the 11th payment.
And in fashion-conscious Southern California, Rent-A-Wheel offers customers the chance to change their wheels after three months.
Rent-A-Wheel offers a range of tires, but features the Falken brand, Mr. Bowlin said, along with a dozen or more wheel brands. The stores do not offer automotive services beyond tire and wheel mounting and balancing, rotation and tire repair. The chain does offer free rotation, free flat repair for the life of the product, and free mounting and balancing.
Rent-A-Wheel advertises primarily on the radio, Mr. Bowlin said, a practice it likely will continue in Texas and Arizona.
Rent-A-Wheel stores are about twice the size, revenue-wise, of the Rent-A-Tire locations being acquired, Mr. Bowlin said. The 43 Rent-A-Tire stores operating prior to September 2001 reported about $35,000 in average monthly rental income during the first part of 2001, according to Cash America financial documents. The average size of the remaining 22 stores is measurably larger, Mr. Bowlin said.
For the January-September 2001 period, the Rent-A-Tire business recorded revenues of $13.7 million but suffered losses of $11.1 million during the same time frame, Cash America documents show.
Rent-A-Tire was founded on the premise of allowing customers—typically aged 18- to 35-year-old males—the option of renting new tires and wheels without a credit check or deposit. Customers could return the merchandise at any time with no further charges or eventually own the products.