Leveraging Lithia's physical presence is key to Driveway's continued growth, DeBoer said. Today, Driveway customers have access to 210 reconditioning and vehicle storage locations, more than 500 inventory procurement specialists and nearly 9,000 dealership associates that support the digital transactions.
While Lithia's goal is to grow the business its captive captures, the company doesn't plan to step on automakers' toes. DeBoer told investors that manufacturer captive finance offerings are "hyper-important" to their relationship with automakers. Automakers funnel incentive programs, including subvented finance rates and other discounts, through their captive arms.
"We don't plan on attacking that at all," DeBoer said.
Lithia Chief Marketing Officer Tom Dobry told Automotive News that the retailer's lending arm is targeting the used-vehicle space, rather than chasing new-car sales where automaker captives dominate.
Lithia's finance company focuses on risk-heavy customers with lower FICO scores that captive lenders typically avoid.
Still, DeBoer said the company has been working toward enhancing its underwriting processes to grow further into the higher credit tiers.
"We have been in the deep-prime and subprime business for over a decade in Southern Cascades Financial," he said. "And what we really did is build all our decisioning models over the last two years to move into the prime business, which is a hyper low-risk type of environment."