• What a Captive Finance Company Does

    Some drivers may not know what a captive finance company is, but if you are going to be shopping around for financing for a new or used car or truck, you may want to talk with this kind of company.

    What Is a Captive Finance Company?

    A captive finance company is traditionally a separate business that has a unique connection with an auto maker. The role of the captive finance company is to handle financing on the vehicles sold by the auto manufacturer, including outreach and communications with individual borrowers. A conventional captive finance company is owned by the auto maker, but it is a separate business division. Some of today’s big captive finance companies, such as GMAC, the captive finance company for General Motors, are owned independently, but they still offer matchmaking services for the auto maker and its customer base.

    What to Show to a Captive Finance Company

    In a deal with a captive finance company, a borrower should have his or her credit score and financial history available. The shopper will also want to provide proof of any assets that can be used in a financing deal.

    Captive finance companies often provide an appealing alternative to financing through a dealership. Customers who use a captive financing company can often go to a dealership that participates with the auto maker and use the deal they have made to easily finance a vehicle from that manufacturer. Dealerships generally respect the captive finance company as a deal-maker authorized specifically by the auto maker.