Leasing Startup Carvoy Introduces Online Captive Financing

LAS VEGAS — Online new-car marketplace Carvoy quietly introduced the ability for consumers to apply for a loan on its website earlier this year, after only having made leasing and cash offers available since the startup launched, Chief Executive Daniel Yuabov told Auto Finance News.  

Much of the website’s branding still only shows lease offers, however, when consumers go through the application phase online there is a button to see one financing offer from the manufacturer’s captive, Yuabov showed AFN in a demo.

Carvoy works exclusively with captives to make the online offers, and consumers can only choose among the OEM’s new-car inventory. However, the company is working to introduce used-car inventory as well.

“Instead of showing stock photos of the car, we can show you real images of the car, miles, different APR rates you might qualify for, and different F&I products,” he said during a meeting at the National Automobile Dealers Association Expo. “The used-car side is way more profitable [for the dealer]. You are going to have more F&I products, and on the frontend you can make a little more money, but you’re being very fair with your financing rate.”

The risk involved with having a used car will likely drive consumers to purchase more of these service contracts, Yuabov said, but if the monthly price is lower it’s a trade-off consumers will be more than willing to take.

“You’re going to have consumers that select the maintenance plan, that select the wheel and tire plan, and consumers that do more because it’s not a new car,” he said. “They know it’s not a new car, but as long as it’s a more impressive payment, they’ll be willing to take that type of vehicle.”  

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