LAS VEGAS — Direct lending models are “not efficient,” said Tim Russi, president of auto finance at Ally Financial Inc.
Lenders that “have to generate all the applications — that’s not necessarily the best model the industry can produce,” Russi said in a fireside chat at the 2016 Auto Finance Summit Thursday. “When the consumer wants to connect with you, you have to get them to connect with you, whereas right now we outsource that to the dealers, and they absorb that cost,” he said.
Ally has built a direct lending product over the “last few years,” in response to consumer demand.
However, “today, direct lending is not the predominant lending; it’s indirect,” Russi said. “We’ve generated a business model that’s highly effective and efficient at delivering, at the point of sale, finance for a $30,000-a-year [income] consumer while they’re in the dealership — that’s pretty impressive.”
