Auto lending is a segment that has seen a lot of traction in the last couple of years, but most of the innovation has centered around improving the new and used car financing process. One of more innovative players in this space is Confident Financial Solutions (CFS) and they are tackling a different niche within auto, car repairs.
Today, they announced a partnership with WebBank. WebBank was one of the first banks on the fintech scene having first partnered with LendingClub and Prosper almost a decade ago. Now they work with many fintech companies to provide banking services across a variety of lending verticals.
Traditionally consumers have relied on credit cards or even worse, payday loans to finance unexpected auto repairs. CFS and WebBank together have launched a product that allows the service center to offer financing at the point of sale. The process is all done on a smartphone in four steps with the consumer receiving a decision in just a few minutes for up to $7,500. Similar to WebBank’s other relationships, they are the ones who actually issue and hold the loan as a nationally-licensed, FDIC-insured, state-chartered bank. What makes this relationship unique is that WebBank will hold the loans on their own balance sheet.
Richard Counihan, CFS’ CEO included this statement in the press release:
CFS, over the past four years, has grown to be one of the nation’s largest providers of installment loans to consumers made through auto repair service centers and car dealerships. As such, we understand how hectic things can get in a service department. This innovative solution will help improve service advisor productivity and enhance the customer experience at an often tension-filled moment. What’s more, this fueled-by WebBank solution will aid our expansion plans as it supports our drive to offer ‘auto loans you can trust’ to more people in more places.
While this type of partnership with a bank isn’t unique, the niche that CFS is targeting is. According to a recent survey by AAA, 1 in 3 motorists or 64 million US drivers are unable to pay for an unexpected repair cost without going into debt. It is important for consumers to have access to more options at cheaper costs when they face vehicle repair bills.
There is a lot to like about this point of sale or “point of need” model as the company likes to call it. By building relationships with service centers across the US, CFS will be able to tap into millions of Americans without having to acquire customers directly.