The new offering from CarFinance.com will allow its lender partners to pick and choose the financial products they offer through the portal, Hewitt said.
“We’re designed to be the consumer landing page where you come to CarFinance.com and you [consumers] may be looking for refinancing, dealer purchase, private party, lease buyout, cash out refi, or commercial financing,” Hewitt said. “We are built to give a lending partner that kind of modularity. … [As a lender] I may not want to participate in all six of those transaction types, but I might say I want to participate in a select three.”
CarFinance.com is preparing to split from its parent company, Flagship Credit Acceptance, to become an independent company, AFN reported last week. Flagship and CarFinance combined to originate $264.1 million last quarter. About $30 million of loans are now being originated quarterly on CarFinance.com.
Hewitt wants to make CarFinance.com an online destination for automotive financing, and that includes offering services to the lender.
“Our lending partners can choose from a menu of services we provide, including both a platform as a service or software-as-a-service,” he said. Lenders “can choose from staffing services, platform marketing, lead generation, credit underwriting, loan decisioning, credit execution, loan validation, loan funding, or title management. Or you can look at different parts of our software licensing.”
For now, CarFinance.com can only facilitate direct deals, but the company is working on a dealer-purchase platform and adding lenders so that Flagship will be just one of many finance providers on the site, Hewitt said. A “dealer-purchase platform” means CarFinance.com works directly with the dealer to facilitate a loan.
Unlike other direct lending platforms that give the consumer multiple loan offers, CarFinance.com presents only one: the offer CarFinance determines gives the best value to the consumer. As more lenders join the platform, the company may switch to a dual-offer system.
“Ultimately, there are a lot of things that can confuse the consumer on a multiple-offer arrangement,” Hewitt said. “It’s different in each financial situation. In refinancing, it might be APR and term, which are the deciding factors. In that case, our first presentation would be on the lower rate. But we would also let the consumer know there’s an option available with a longer term that’s going to result in a lower monthly payment.”
Hewitt declined to name the other lenders on the website, but said that CarFinance.com is able to serve as a full-spectrum lender through its associates.