Car repair financing company Sunbit offers F&I loans

Popular consumer auto service and repair financing company Sunbit is getting into the finance-and-insurance game.

Sunbit, which says it works with nearly all of the top 25 dealership groups in the country and more than 6,400 stores nationwide, now offers loans to customers seeking to finance F&I products.

More than 100 dealerships have been offering customers Sunbit for F&I products in an early access program dating to early 2022. Sunbit plans to expand the option to the rest of its dealership network.

Unlike Sunbit's service and parts financing, the F&I financing option carries an interest rate of "0 percent no matter what," according to Rob Bollinger, Sunbit head of national dealer groups. The company makes money by charging dealerships a fee for facilitating the transaction, Sunbit Chief Revenue Officer Tal Riesenfeld said.

Riesenfeld told Automotive News the system had a 90 percent approval rate — everyone with a 500 credit score or more — and requires only a soft credit check, a less detailed look at the customer that doesn't register on the consumer's credit the way a traditional "hard" credit application would. (Sunbit does report to credit bureaus whether the customer is making payments on an approved loan, but the loan request itself doesn't register.)

Consumers can borrow up to $8,000 depending on their credit profile — Bollinger estimated the average service contract ran $2,750 — with payments spread over six-, 12- or 18-month terms. Most borrowers are approved in the "single-digit thousands" range, Riesenfeld said.

Sunbit does not charge back dealers if the customer refuses to pay or ends the contract early, Riesenfeld said.

"Since day one GMs asked us if they could utilize our product in the financing department, customizing our solution to F&I departments is a natural next step," Riesenfeld said in a statement in March. "People want F&I products because it gives them peace of mind. We help them to buy those products and not break their monthly budgets."

Many consumers are able to finance their F&I coverage within an auto loan, a transaction that means more dealer reserve from the financing itself in addition to the margin from selling the F&I products. But according to Riesenfeld, Sunbelt isn't targeting that market.

Riesenfeld said the company is eyeing customers who can't finance F&I products within their car deal and consumers seeking F&I coverage on a vehicle they already own, such as a car with a factory warranty about to expire.

"That's a huge market," Riesenfeld said of the current vehicle owners.

Service departments today promote such coverage to customers, Riesenfeld said.

"Those customers are being [referred] to the finance department," Bollinger said.