Online used-vehicle retailer Vroom said Tuesday it wrapped up its $300 million acquisition of United Auto Credit Corp., a nonprime auto lender that it will incorporate as its captive finance arm in the first half of the year.
Vroom, which indicated in October its intent to buy the lender, said adding United Auto as an indirect, wholly owned subsidiary will aid its sales growth, improve unit economics and "create long-term value" for shareholders.
More than 500 United Auto employees will be retained, including CEO Jim Vagim and CFO Ravi Gandhi. Vagim will expand United Auto's third-party finance business, and Gandhi will develop the company as Vroom's captive finance arm.
"By integrating an automotive lender like UACC, with rich expertise in the non-prime space, Vroom will be able to serve a broader portion of the customer base," Vroom CEO Paul Hennessy said in a news release. "We believe this will translate to greater efficiency in our marketing efforts and allow us to scale the business faster."
Vroom competitors Carvana and CarMax have a similar setup for in-house financing.
United Auto, which has more than 8,000 dealership partners, will keep doing business under its own name.
Vroom said it financed the deal with cash on hand.