Stellantis ramps up U.S. captive finance arm

Rising interest rates have made consumers particularly attuned to the financing portion of a vehicle sale, turning Stellantis' effort to roll out a new captive lender into an even bigger deal for many of its retailers.

At Huntington Beach Chrysler-Dodge-Jeep-Ram in California, about 50 transactions each month now use Stellantis Financial Services. Tommy Rodriguez, the store's finance director, said having another bank competing for each loan helps customers find the best deal and increases the chances of closing each sale.

The dealership, one of the pilot users of Stellantis Financial, still does about 60 percent of its financing business with Ally, but the new captive has handled more sales than store officials expected it to at this early stage. The lender has been quick to respond as deals come together, Rodriguez said.

"They follow up pretty good," he said. "We get pretty much automatic responses. If we don't get an answer within the first couple of minutes, they're pretty receptive of our phone calls and pushing it to get it through."

Around 1,600 of the automaker's more than 2,600 U.S. dealerships have begun using the in-house lender, Stellantis North America COO Mark Stewart said this month. It launched after Stellantis' November 2021 acquisition of F1 Holdings Corp., the parent company of First Investors Financial Services Group, for about $285 million.

Since then, Stellantis — formed about eight months earlier by the merger of Fiat Chrysler Automobiles and PSA Group — has been steadily rolling out the new financing option to its U.S. dealerships. Many dealers have been working primarily with Chrysler Capital, which operates as part of a private-label agreement with Santander Consumer USA formed in 2013.

Most major automakers have their own internal lender to help dealers and the factory drive sales and lower costs.

"It's a definitive competitive advantage to have it," Stewart said Dec. 5 at the Automotive News Congress in Detroit. "We've got great relationships with [Chrysler Capital], Ally, Chase and the other guys, but we have launched now already with over 1,600 dealers, so we've been ramping up through the course of this year. … We've more than doubled that business this year, so we feel very good going into next year."

Stellantis CEO Carlos Tavares had made it clear going into the merger that exploring the establishment of a captive finance arm in the U.S. would be a priority. Tavares told Automotive News in January 2021 that "if sales finance in the U.S. is something that can help to improve the profitable business that we have in the U.S. ... we'll look for a solution, and hopefully, we'll be able to find one."

Tommy Moore Jr., CEO of Stellantis Financial Services, said in an emailed statement to Automotive News that it's "making great progress in executing our vision to build Stellantis Financial Services into a full-service captive."

Moore said the unit now offers "a full suite of retail loan products, having launched prime and near-prime loans this year."

The lender has begun fleet financing, which supports the sale of commercial vehicles for the small fleet business. It also is launching a lease product and will unveil a dealer floorplan option soon.

Stellantis Financial is preparing to help dealerships transition to electric vehicles, which will require hefty investments for stores to install the necessary infrastructure.

"We expect to roll out a financing product this January that allows dealerships to finance upgrades to meet electrification initiatives," Moore said. "This follows the recent news that our Stellantis U.S dealers are working in partnership with Future Energy to address their specific EV infrastructure needs."

Randy Dye, who owns Daytona Dodge-Chrysler-Jeep-Ram and at Maserati-Alfa Romeo of Daytona in Florida, said the introduction of Stellantis Financial has been well organized. This gives Dye hope that "they can grow into a full-on captive — that they can buy the volume and they can handle the volume."

Dye said the rollout has happened at a good pace to help it, and the dealerships using it, succeed.

"They didn't go after too much business compared to the infrastructure that they had to handle the business," Dye said. "They set their expectations and they have managed to those expectations, and I don't think they set them too high."