Car Capital Secures $ 150 Million Support For Instant Auto Loan Approval Technology
Large New York Private Equity Firm Provides $ 150 Million Line of Credit Over Next Three Years to Grapevine Startup That Makes Auto Dealers Easier to Provide Instant Auto Loans Regardless of Background credit.
Car Capital announced on Tuesday the “milestone transaction” with subsidiaries of Fortress Investment Group. Fortress is also investing more than $ 6 million in the business.
The equity and debt investments will allow Car Capital to fund more dealers and “underserved consumers” wishing to buy vehicles, according to the company. Its dealer-exclusive electronic auto loan system allows dealers to instantly approve 100% of customers.
“We are very happy to partner with Fortress, [which] has a long history of providing capital to fintech and automotive companies, ”Car Capital co-founder and CEO Justin Tisler said in a statement.
Fortress Investment Group, founded in 1998, had more than $ 54 billion in assets under management as of September 30, 2021. It works with 1,800 institutional clients and private investors around the world.
Car Capital received a $ 20 million line of credit from Medalist Partners last year. It operates as a subsidiary of Car Capital Technologies, which has raised more than $ 190 million in six funding rounds, according to tracking site Crunchbase.
Consumer Reports and True Car estimate that 20-25% of all auto loans fall into the sub-prime category, with buyers with bad credit often paying higher interest rates. That’s more than 5 million car loans per year.
Even though car prices have skyrocketed during the pandemic, the average auto loan rejection rate fell 4.2 percentage points to 3.7 percent in 2021, according to the latest report from the Federal Reserve Bank of New York.
North Texas is a major auto credit market. Dallas-based venture lender Santander USA, Plano-based Capital One and Fort Worth-based GM Financial are among the nation’s largest auto finance companies.