The world of auto finance is changing.
A few years ago, the only real choice for buying a car was to go through a traditional lender like Wells Fargo or Bank of America. But today, a new wave of auto finance companies is capturing the market.
Carvana is one of the most prominent players in this space, but we here at Leasly are here to challenge them using our own dealer-owned financial captive model.
Here is how we’re going to stack up against the competition.
Carvana: The Auto Finance Disruptor
Carvana’s business model relies on a concept called “vertical integration.”
In short, they cut out the middleman in regards to dealers and lenders. This helps them in two major ways.
First, they’re able to get vehicles at a lower cost because they’re not dealing with the markup that dealerships typically charge. Second, they can offer financing directly to customers without having to go through a lender like Capital One or Bank of America. Carvana has complete control of its financial capabilities including credit score decisions, underwriting tasks, insurance, and the like.
Here are a few other things they bring to the table:
- Carvana’s main selling point is that they offer a “no-haggle, no-hassle” experience when it comes to buying a car.
- Carvana has a large selection of cars to choose from and their prices are typically lower than what you would find at a traditional dealership
- You can get a car in as little as 24 hours and they have a seven-day return policy
Carvana’s “vertical integration” business model might not seem like an obvious advantage to consumers right away, but it’s a big deal.
The reason is that it gives Carvana a lot more flexibility in how they structure loans. While they don’t have complete autonomy in how they structure those loans, customers will often be able to get a lower APR than they would from a traditional lender. And that’s important because the auto finance industry is incredibly competitive.
Leasly: A Revolutionary New Way to Finance a Car
Carvana laid the groundwork for the new wave of auto finance, but we here at Leasly are taking it one step further by giving customers even more freedom and flexibility when it comes to financing their cars.
The key to our success is our dealer-owned financial captives (DOFC).
What that mouthful of a term means is that we have wholly-owned finance subsidiaries that exist for the purpose of making loans to customers.
This might not sound like a big deal, but it is.
It allows us to structure loans in a way that is more advantageous for customers.
In fact, through Leasly’s online retail app customers will be able to structure their own deals for an exceptionally tailored checkout process. And seeing as the next generation of car buyers expects that anything can be done through a mobile device, we’ve focused heavily on making our app user-friendly and convenient.
What makes us stand out from Carvana, however, is that we aren’t interested in sidelining car dealers and lenders despite our stance on decentralized auto finance.
We want to work with car dealers by providing them with the resources they need to succeed in a rapidly changing industry. This includes letting customers shop from your inventory, and even allowing them to buy accessories and parts from your store as they’re shopping for a new car.
No other company allows customers to make a complete transaction, but we’ve made it possible on the highest quality interface.
Decentralized Auto Finance: The Winner
Carvana has a huge leg up on traditional auto finance companies, but we here at Leasly are aiming to become the go-to choice for anyone looking for a more flexible and customer-friendly experience.
We believe that our stance on working with dealers and lenders will help us to succeed where Carvana has failed.
The bottom line is that we want to give customers the freedom to choose how they finance their car. And we believe that, in the end, decentralized auto finance is the way to go. After all, what could be more customer-friendly than that?
If you’re looking for a new car, be sure to check us out at Leasly. We might just be the company you’re looking for.
Until next time,
The Leasly Team.