Mazda’s consumer loan and lease financing will make the switch to TFS on April 1, 2020, TFS spokesman Vince Bray told Auto Finance News in an email. The other range of products will launch at different times through the end of FY2021, he said.
The captive had announced on August 28 that it will serve as Mazda’s private-label finance provider, taking over for Chase Auto, which has served as Mazda’s financial arm under Mazda Capital Services since 2010. Prior to Chase Auto, Mazda worked with Ford Motor Credit as its primary financier. Chase Auto also acts as the equivalent of a captive financier through a white-label arrangement with Subaru as Subaru Motors Finance.
The deal marks the beginning of the captive’s private label financing solutions, which “could be extended to other automakers or mobility companies,” Bray said. “At this stage, our paramount focus is on setting up the Mazda business,” he added, noting that an executive team for the Mazda business has not yet been announced.
As the newest player in the private-label financing space, TFS is competing with big banks like Santander Consumer USA, TD Auto Finance and Chase Auto, whose books of business range from $22 billion to $82 billion. TFS boasts a $92 billion portfolio, according to Big Wheels data.
The captive’s move toward providing private-label financing for third-party auto lenders is a “natural extension of our traditional business, and a growth opportunity for TFS,” Bray noted in the email to AFN.
As for the agreement with Mazda, TFS intends to “leverage its existing servicing platform to provide customer service for the newly originated assets and expects to make technology investments to support the Mazda program,” according to an 8-K with the Securities and Exchange Commission. “TFS will not be acquiring any existing Mazda assets or liabilities pursuant to the agreement.”
Additionally, TFS’s obligations under the agreement include “customer service, field sales, customer collections, tax collection and remittance, payment processing, titling, marketing and vehicle remarketing,” the filing noted.