Cox Automotive Inc. announced the acquisition of Texas-based Intersection Technologies Inc., better known in the industry as F&I Express, the companies announced on Monday afternoon.
The acquisition is a move for F&I Express to access more of the resources that Cox can provide, including a large lender and dealer client base. Those clients can now leverage F&I Express to help keep their practices with ancillary products compliant.
“In today’s world, [F&I Express] has been a big benefit from a compliance standpoint [for lenders] because a lot of the lenders are under scrutiny from different states or sometimes on a federal basis around these [ancillary] products,” Brian Reed, chief executive and co-founder of F&I Express, told Auto Finance News.
Specifically, financing aftermarket products opens lenders up to various compliance issues. For example, the vehicle service contract or guaranteed asset protection insurance agreement has to be canceled in the event the loan is paid off early or the vehicle is repossessed. To that end, the lender has to go in and file for cancellation for the aftermarket products so that it can take the unearned premiums and apply it back to the customer account.
“In the past, it has been tough, it can be an operationally challenging process for lenders to do, and what we’ve done is developed a platform called Express Recoveries that connects the lenders to all these different aftermarket F&I providers to cancel their contracts, so that makes it more efficient,” Reed said.
Lenders work with multiple companies, customers, and contracts in different states that have different compliance standards, which makes it hard to create a “one-off type of situation and solution that a lender could apply everywhere,” Cheryl Miller, vice president and general manager of F&I Solutions at Cox Automotive Inc., told AFN.
“With the Express Recovery solution, lenders are giving this integrated way to bring all [compliance] requests into one place and facilitate getting these refunds back to meet their compliance requirements,” Miller said.
While specific financial terms of the deal are undisclosed, F&I Express will operate as a wholly-owned subsidiary of the multi-brand player. The acquisition is based on a partnership that started in 2013 when Autotrader and Intersection Technologies leaders first decided to partner together to further digital retailing initiatives.