SAN FRANCISCO - Competition is heating up in the online credit application business as promising new players enter the arena.
Thousands of dealers and dozens of the largest auto lending institutions have turned to the Internet to speed the credit application process. The demand has lured new entrants to the business and prompted two established players to merge.
This year, the Big 3 captive finance companies, with Toyota Financial Services, plan to launch RouteOne, an online credit application that would be free to dealers.
And another financial software company, Bankers Integration Group Inc., of Laguna Niguel, Calif., actually is paying dealers to participate.
Big banks also have joined the fray. National City Corp., of Cleveland, just launched its own online credit application process on its Internet automotive shopping site.
The jolt of new competition has DealerTrack Inc., of Melville, N.Y., preparing to acquire competitor Credit Online Inc., of Baltimore, and to merge the two companies' technologies, which are similar.
"RouteOne is a formidable competitor," says Howard Tischler, CEO of Credit Online. "The captives could require dealers to participate in RouteOne. We have to earn dealer business."