BlueYield to Bring Peer-to-Peer Lending to Auto Finance

BlueYield Inc., an Aliso Viejo, Calif.-based direct auto company, is in the process of preparing its systems to onboard “nontraditional” lenders looking to get into the auto finance space, according to Chief Executive Jeffrey Danford, who described this move as a response to investor demand.

“We’re now looking into what I call the P-to-I space, peer to investor,” Danford told Auto Finance News. “We’ve had interest from various types of investors that say, ‘We would like to acquire auto loans, similar to what we might be doing with a Lending Club or Prosper,’ and obviously the auto loan sector is huge.”

BlueYield currently works directly with customers through the application and origination process, after which the auto loans are funded and serviced through its 17 lender partners, Danford said. But while the company’s current lenders are equipped to provide the servicing of loans in-house, BlueYield will outsource the servicing for its nontraditional or peer-to-peer lenders, he said.

Although the company hopes to add these “nontraditional funding sources” to its systems this year, Danford does not yet have a specific timeline for when it will start to offer auto loans through its new investors. “We’re essentially looking to bring auto loans to the peer-to-peer space,” Danford said.

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