Dealerships are flocking back to captive finance companies, which have gained their highest market share in almost 15 years while banks and credit unions have lost shares, according to just-released first-quarter auto finance results from Experian Automotive. F&I managers are directing business to captives, right along with the twin comeback in new-vehicle inventory and factory-backed incentives. Of course, incentives are a key advantage over banks and credit unions, except for some banks, which sometimes participate in manufacturers’ incentive programs because they provide captive finance-style services to OEM partners. Leasing, another auto finance product dominated by captives and a few partner banks, is also making a comeback and is also fueled by factory-backed incentives, Experian says. Used-vehicle loans were a mirror image, with banks and credit unions virtually tied for No.1 at 28% share each in the first quarter.

Source: Forbes June 03, 2024 13:37 UTC