Cool Springs luxury car wash, car accessories and garage retailer Miles The Auto Spa said Friday it is selling used high-end automobiles on its lot, a move that industry experts think will help boost the company’s overall business.
Miles Johnson, the company’s founder and president, said he plans to sell 15 to 20 used luxury automobiles and sport utility vehicles on his 1.5-acre lot at Bakers Bridge Road.
Advertisement
Johnson said he believes consumers will sell their cars at his business because of the large amount of customers who wash their cars and buy products there as well as a potential for a higher profit for their vehicle.
“Unlike any other car dealer in the country, we have this inbound, constant flow of people who like cars,” Johnson said.
Johnson partnered with wholesale mortgage executive Jeff Yates to form Miles AutoMotive, the sales division that started selling cars in March.
Johnson said the company invested about $50,000 in the division in Web site development, merchandising, advertising and other items. He also has obtained a line of credit to buy used cars, Johnson said, but declined to discuss the details.
Johnson said 30 percent of the cars on the lot would be consigned. Customers pay an upfront $300 or $500 fee to detail their cars and market them at the lot and online.
Profits are split
Before the customer pays the fee, Miles AutoMotive does a market analysis on the car’s minimum sales price. If the car is sold above the minimum price, that profit margin is split in half between the company and the customer.
Miles The Auto Spa opened in February 2007 and Johnson said he invested less than $4 million in that business from his personal funds, Pinnacle Financial Partners and a Small Business Administration loan. Johnson bought the lot about two years ago for $1 million, and his business is near other car dealerships in the area.
Bob Schrum, vice president of the Southeastern Carwash Association, which represents operators in the Southeast, said he thought Johnson’s idea was “ideal” because Johnson will be able to get an upfront fee for detailing from new customers who want to sell their cars.
“It sounds like a perfect fit,” Schrum said, adding that it could boost business at a time when consumers are bringing 10 percent to 25 percent fewer vehicles to car washes. But Johnson said sales at The Auto Spa remain strong, with gross sales revenue in the first 10 months of business exceeding $1 million.
Gross sales for its second year will be between $1.5 million and $2 million, he projects.
Wendy Lee can be reached at 259-8092 or wlee@tennessean.com