CarFinance Capital, of Irvine, Calif., has signed around 3,000 new-car dealerships in 19 states and is moving into Northeastern markets, Landy says. The company's direct-to-consumer channel, CarFinance.com, is available in 40 states.
Landy discussed the company's growth with Automotive News Special Correspondent Jim Henry.
How's business in terms of originations?
We're in the $45 million-per-month range. For the last few months we haven't seen quite as much opportunity. Seasonality plays a role. In addition, the captives are expanding their risk appetite and going after the more midmarket customer.
Where's your growth coming from?
We are expanding geographically on the indirect side. We have gotten into some Northeast markets and we have seen growth in Florida. There has also been an increase in dealer connections and also in application volume.
How many dealerships do you have signed up?
We are signed up with more than 3,000 franchised dealers. We are active in 19 states. In California, Texas and Florida we are very active. We are sort of marching toward the East Coast, the Carolinas, New Jersey, and Pennsylvania.
What's your FICO range?
We go at the top to about 675, which is more to the near-prime range. A lot of banks and credit unions cut off below 660, 640. They may go below that but the approvals get pretty thin. In general, where they start thinning out we start picking up. Our low-side cutoff is 525. Our sweet spot is about 575 to 625. That represents about 50 percent of our business. From the credit union or bank perspective, they're declining those applications today.
Is it fair to say you mostly finance used cars?
About 35 to 40 percent of what we finance will be new cars. The average balance is about $20,000 and the average age is about 2.2 years. It's a late-model used car.
Do you do much with credit unions?
We work with credit unions in both direct and the indirect category. Fairly consistently, the vast majority, say 80 percent, is indirect.
How is your direct-to-consumer loan business going?
The direct contracts continue to grow. We are adding partners there. It is a pass-through. We partner with a bank or a credit union. They are looking to complement their existing category.