LAS VEGAS – This year will mark the fulfillment of a promise made by Volvo Cars of North America to its U.S. retailers as it announced the establishment of Volvo Car Financial Services (VCFS). Later this year, the new captive arm will start to provide Volvo retailers in 50 states with a variety of financial services products funded through Bank of America.
Based in Rockleigh, N.J., the captive will provide retail financing and leasing on both new and pre-owned Volvo vehicles. The programs will feature both financing at standard market rates and promotional offers supported by Volvo Cars of North America.
Though VCFS will have its own separate credit policy and credit staff, the new captive will partner with BofA to provide funding for its financing products. Bof A will become an exclusive provider for certain VCFS automotive loan and lease securitizations in the U.S. In addition to funding, VCFS will license BofA’s proprietary underwriting and risk-based pricing technology to support the credit process. The partnership will also provide Volvo retailers with co-branded commercial financing products such as inventory floorplan, working capital loans, and real estate loans later this year.
While VCFS will originate and fund retailers directly on contracted retail and leasing products, the servicing of contracts will be managed by CenterOne Financial Services LLC, a division of World Omni Financial Corp.
“Launching a true captive finance arm is the most important step we will make this year to support our dealer network and customers,” Volvo Cars CEO John Maloney said. “This is a key initiative in our long-term growth plan. We expect to have the commercial loan products available within six months and the consumer loan and lease products available before the end of the year.”
