By Diana Asatryan & Larissa Padden
GO Financial will shut down operations tomorrow, Auto Finance News has learned.
“GO is one of several companies within our ownership structure, and our owners have decided to focus their resources and capital in our other core business units,” according to a company document obtained by AFN. Ernest Garcia II and Ray Fidel own 51% of GO Financial.
Mesa, Ariz.-based GO will stop originating loans today, though GO Loan Servicing will remain intact and continue to collect outstanding loans, according to the document. Dealers can withdraw submitted applications that are still pending verification, the company said.
The changes should be invisible to existing GO customers, the company added.
Tomorrow morning, dealers will be notified of the changes, and the loan application feature will be removed from the company’s website, Colin Bachinsky, president of GO Financial, told AFN. GO will complete applications in its workflow by May 27, he said.
“This has everything to do with our owners’ choosing to reallocate their resources on different businesses, like DriveTime, Carvana, or SilverRock Group, and focus on core businesses,” Bachinsky told AFN. “GO was the least connected business, as Carvana and DriveTime are backed with the inventory, and then you have SilverRock, which is an F&I company. GO is a little different, as we were indirect for non-affiliated dealers.”
The decision to exit indirect lending is not an indication of the company’s overall sentiment of the ABS market in the deep subprime sector, Bachinsky said, noting that GO Financial’s securitizations have performed “better than ratings have anticipated.”
More than 90% of GO Financial’s 530 employees have the option to move to a sister company, he added. In 2015, GO Financial originated 47,500 loans.
