As Ford Motor Credit Co. pulls back on used-car and subprime lending, two other companies are expanding in those areas.
Household Automotive Finance Co. and bank-based Wells Fargo Financial Acceptance Inc. both said they stand to gain as Ford Credit phases out its leading subprime subsidiary, Fairlane Credit LLC of Colorado Springs, Colo.
"The subprime auto industry is a tough business," said Tom Reddick, director of e-commerce for Household Automotive in San Diego. Household Automotive's managed receivables have grown to around $7 billion compared with only $883 million in 1997. In 2001, its auto receivables grew about 40 percent to $6.4 billion. The lender's goal for 2002 is to grow another 25 percent.
"You need to know exactly what you're doing," Reddick said. "If you don't have the management team in place to do it, you can lose profits very, very easily."
Household Automotive is a subsidiary of Household International in Prospect Heights, Ill.