Axos Bank is venturing into direct lending via a fresh partnership with Carvana that will redirect the bank’s direct loan applicants to Carvana’s website. The online used vehicle retailer already has a similar partnership with Regions Bank.
The partnership, which was signed in the second half of 2020, will begin with a pilot expected to last 90 days, Anthony Capizzano, senior vice president of direct consumer lending at Axos, told Auto Finance News. Axos, a digital bank with assets of $14.4 billion, will pre-screen its current customers and target them through an email campaign containing a link directing them to the co-branded landing page on Carvana’s website.
“We’re sending out offers to the people who we think have the propensity to be in market and, through that, will offer them the Carvana experience,” Capizzano said.
Axos was attracted to Carvana by the synergy between the Axos and Carvana platforms and customer journeys, Capizzano said, noting that the online retailer’s back end service was a major selling point.
“Carvana’s front-end experience has earned praise from customers, but in our view what’s unique — and attractive — is their back-end experience,” Capizzano said. “A lot of these companies will have a great front end — slick, user friendly, great — but [the challenge is], how do you go about the very antiquated process of titling the vehicle, taking a trade in, or other systems lenders have to deal with? How do you do that in a very easy, fluid manner while still staying compliant?
“Everything we do [at Axos], everything we build, is digital. If you can’t access something on your cell phone fully, we don’t release it into production,” Capizzano said. “Carvana is very much the same way. It has to be digital.”
Once the pilot stage ends, Axos will evaluate the results before rolling its direct lending platform to its larger consumer base, Capizzano said, but did not provide a definitive timeline.
Axos Bank also originates indirect loans to prime consumers, and had $269 million in total auto outstandings as of yearend 2020.
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