AutoNation announced along with its second-quarter earnings it had struck a deal to buy captive finance company CIG Financial, and Lithia hailed the progress of its captive Driveway Finance Co. in its quarterly discussion of results.
However, the earnings season also saw major publicly traded rivals Penske and Group 1 refusing to follow suit.
AutoNation announced in July it will buy indirect lender CIG Financial for $85 million and convert it into a captive finance company. The deal was expected to close in 90 days, AutoNation said.
CFO Joe Lower called CIG "complementary to an already strong piece of business." It originated $195 million across 12,000 loans last year.
CEO Mike Manley said he sees the acquisition providing "significant upside" over time to the group's strong finance-and-insurance revenue.
AutoNation, of Fort Lauderdale, Fla., ranks No. 1 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 262,403 new vehicles in 2021.