OneMain Financial grew its direct auto portfolio by 35% year over year to around $3.38 billion in receivables, the company reported in its second quarter earnings report.
“[Direct auto] is about 22% of the portfolio this quarter versus around 18% a year ago, so I think we’re getting growth in our direct auto,” Scott Parker, executive vice president and chief financial officer for the lender, said on the call. “It’s something that we continue to improve the effectiveness of our selling and explanation and customer awareness. But it’s very hard for us since people don’t walk in looking for a direct auto, it’s a product that we sell. It’s really a matter of our execution and effectiveness of taking customers with that profile and explaining the benefits of the product.”
OneMain Financial formed in 2015 when Citi Financial Credit Co. agreed to sell its assets to Springleaf Financial Corp. in order to form the new lender. OneMain Financial now offers personal loans both unsecured and secured as well as a direct lending portal, which allows for greater loan amounts and lower APRs than the secured loan products can provide, according to S&P’s July ABS presale report.
The company does not break out losses and delinquencies on its direct auto products specifically, but on the call, President and Chief Executive Jay Levine noted that auto losses on newer vehicles have remained “sub 2%” for a number of years now.