SAN FRANCISCO -- Volvo Car Financial Services U.S. plans to begin offering financing to customers with subprime credit scores in the second or third quarter.
"We are seeing some demand from our dealers for a substandard credit underwriting standard," CEO Dan Romagnoli told Automotive News at the National Automobile Dealers Association convention here last month.
He said the company wants to approve more customers with scores between 640 and 680, the middle to top of the near-prime category, and to begin approving customers with scores between 639 and 550, the last being the bottom of the subprime category. Credit scores lower than 550 are generally considered to be deep subprime.
Romagnoli said the demand for subprime lending has been spurred by Volvo's lease-retention business, called the 360 program.
The program is driving more off-lease vehicles back into dealerships, Romagnoli said. That, in turn, is increasing the captive's used-car financing.
With subprime lending, Romagnoli said, "We'll be able to satisfy that need with the financing we have today as well as the new financing we'll put into place."