Post intended to explain the word Captive as referenced in the automobile industry.
Captive finance sources are those normally owned and/or associated with the parent manufacturing company. Of all the financing sources available to the consumer, Captives, from a dealerís standpoint, are usually the most flexible, negotiable, and dependable source for providing the end consumer financial arrangements for their vehicle of choice.
As the economy swings and rebounds, banks tend to react with their buying patterns as a direct result of economic trends, one notices from time to time a tightening of credit criteria. As both banks and credit unions re-evaluate their automotive loan portfolios they will from time to time either tighten or relax their credit granting criteria.
The most levelheaded of all automotive financial sources is, in my opinion, always the Captive finance source. Many times in reaction to a particular manufacturerís market share, the parent company (manufacturer), will issue instructions to the Captive source to relax credit guidelines for a particular model, which neither a bank nor a credit union will do.
Below are some examples of Manufacturers and their associated Captive Source.
FORD MOTOR CREDIT CORPORATION (FMCC)
GENERAL MOTORS ACCEPTANCE CORPORATION (GMAC)
MAZDA AMERICAN CREDIT
NISSAN MOTOR ACCEPTANCE (NMAC)
The posting of the above logos and the outbound links does not indicate an endorsement from creditboards by myself or creditboards admin. For informational purposes only.
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