Car seller targeting the credit-challenged

Las Vegans who complain about driving in the metropolitan area should ponder the predicament of low-income, small-town residents who have no car and no access to intracity bus or taxi service.

Randy Henderson, founder and chairman of Alternative Motors, has thought about those stranded, rural residents. He is building a business designed to satisfy their needs and making Las Vegas his headquarters.

Alternative Motors sells used cars and trucks to small-town residents and typically provides two-year loans to finance the sales.

"We're just trying to provide basic transportation and help these people get back on their feet," Henderson said in a telephone interview Friday. "These are people who have absolutely no transportation."

Most customers have no vehicle and many have no bank accounts, he said. Community banks, which previously made car loans in small-town America, often are too strapped financially to make the loans to high-risk customers with low credit ratings.

An estimated 85 million Americans were under-banked or had no banking relationship in 2007 before the credit crunch began, and Henderson figures the numbers have grown since them.

"It's just a huge market, even before the credit crunch," he said. "It's so large, no one can put a finger on it."

Competitors typically are "mom and pop" used car dealers who rely on third parties to provide financing. However, he said used car loans for low-credit customers are hard to get.

Alternative Motors raises money for its loans through private placements of debt.

Henderson has competitors who both sell and finance used cars, but they operate mainly in large metropolitan areas. He intends to focus on small towns.

The company's top 10 competitors serve only 2 percent of the market, he said.

Henderson declined to disclose a range of interest rates charged to customers, saying it varies by state and customer.

Alternative Motors was established in September 2008 when the private company bought an existing used car sales business in Pryor, Okla. The company intends to start 12 Alternative Motors stores in Oklahoma, Texas, Florida, Indiana, Georgia and Illinois over the next 12 months.

In Las Vegas, he intends to hire 15 professionals for back-office and corporate operations this year. The company already employs nine workers at 6697 Coronado Palms Ave.

Henderson formerly worked in Las Vegas as vice president of SBA Communications, a $3.4 billion asset company that owns and leases cell phone towers to companies, including AT&T.

"I just fell in love with the community," Henderson said. "It became very evident very quickly that it's just a business- friendly environment."

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.