The news: Klarna partnered with Tekion, a platform serving the entire automotive retail ecosystem, per a press release.

This integration will expand installment payment options for consumers dealing with costly auto repairs.

How we got here: The average car costs per year $900 to maintain and repair, per ConsumerAffairs—and those expenses are often unexpected.

• Brake pad replacements for every 30,000-50,000 miles now cost on average $342 per wheel.
• Full tire replacement every 50,000 miles costs on average $907.
• An alternator replacement could range in price from $250 to $1,300.
• And a catalytic converter replacement could range anywhere from $900 to $4,500.

Why this matters: Most US adults depend on their vehicles for work commutes and running errands, making auto repairs a necessity. However, the average cost of repairs and maintenance often exceeds what an average US household could pay off in a monthly credit card statement. 

Embedding Klarna’s installment plans at US car dealerships gives consumers a chance to avoid revolving credit on big-ticket items—and could lock in new BNPL users who have favorable experiences during a high-stress situation.

Implications for payment providers: Guiding consumers through financial milestones like car ownership and homebuying can deepen consumer relationships, leading to  further lending and payment opportunities. 

Providers that offer consumers financial education about the lifetime commitment of major purchases like auto repairs and insurance can lock in more trust and deepen commitments within their ecosystem during moments of high emotion.