Westlake Financial Services, a privately held auto lender that started as the buy-here, pay-here division of a Los Angeles Toyota dealership, is now in all 50 states.
Westlake specializes in subprime but has branched out to cover prime-risk loans. The company buys loans from more than 15,000 U.S. dealerships, up 4,000 from a year ago. About 25 to 30 percent of Westlake's dealerships are franchised; the rest are independent used-car dealerships.
Last year, Westlake's expansion plans went into high gear when Marubeni Corp., a giant, multinational trading company based in Tokyo, bought just over 20 percent of the company. Chairman Don Hankey, his family, and an employee stock ownership plan own just under 80 percent. Westlake's portfolio of outstanding loans is above $1.5 billion, after passing $1 billion last year for the first time.
Mark Vazquez, 33, vice president of sales, spoke with Special Correspondent Jim Henry last month.
Massachusetts was your 50th state out of 50. Any particular reason why it was last?
As far as Massachusetts is concerned, from our perspective we go where the dealer demand is, and it just wasn't on our radar for a while.
There hasn't been that much of a demand. But for the last couple of years we started to see more activity from the Massachusetts dealers, like when we would go to NADA [the annual National Automobile Dealers Association convention], they would be asking about it.
It wasn't a regulatory thing or anything like that. It came up on our radar screen last year because of demand from the dealers.
How long have you been doing prime as well as subprime?
We are definitely full-service. In 2010, we started offering a rate of 5.99 percent for up to 72 months. Everybody doesn't qualify for that, obviously. We specialize in subprime. The great majority of what we do is subprime. But we believe the dealerships shouldn't have to turn anyone away. If a customer merits a better rate, we will give them a better rate. We have rates as low as 4.99 percent.
Why branch out?
Not all lenders do what we do. You're not going to send someone with a 500 [low-subprime credit score] to a prime lender, and you're not going to send an 800 to someone else. We will do both. ... We want to be a one-stop shop.
How are you doing with franchised, new-car dealers?
Their focus for the last few years has been on the used-car market, so we have been growing with the franchised dealers. AutoNation, Sonic, Group 1, Van Tuyl, Penske -- we have relationships with all of those. The perception that we have is that we're sort of little, but we're pretty big. [Dealers] don't realize we have that many relationships.