NextCar Holding Company Inc. and Westlake Financial are partnering up and secured a $400 million debt facility to underwrite its newest strategic effort.
Formed in October by Scott Painter, who also founded other digital auto companies likke TrueCar, Fair and CarsDirect.com, NextCar is a subscription platform while Westlake is one of the country’s largest automotive lenders. The two are linking up to grow the subscription finance business.
“Subscriptions represent an entirely new way to get flexible access to mobility,” said Painter, NextCar’s founder and CEO. “Having strategic partners like Westlake is one of the building blocks for scaling subscriptions in a profitable way.”
Westlake has approximately $12 billion in assets under management, and provides indirect financing through a network of more than 20,000 new and used car dealerships throughout the U.S.
The deal allows Westlake to provide NextCar access to flexible and efficient capital to finance subscriptions. The partnership also offers NextCar loan and collections services through Westlake, as well as access to that company’s dealer network to scale indirect subscription offerings.
For Westlake, the partnership with NextCar will offer access to a new product line that enables a 100% digital transaction.
“Figuring out how to innovate around our financial products with a known entrepreneur like Scott is an exciting development,” said Bret Hankey, President of Hankey Group and Vice Chairman of Westlake Financial.
“We see used vehicle subscriptions similar to how leasing was seen when it was introduced 40 years ago, except the size of the opportunity is much bigger on the used car side and we believe technology and a digitally-driven consumer base will enable much faster adoption.”
“Partnering with NextCar is an exceptional product market fit that puts Westlake on the frontline of financial services innovation,” added Ian Anderson, Group President at Westlake Financial. “A flexible mobility option outside the traditional loan or lease that’s affordable and not bound by terms is a highly attractive value proposition for consumers and forward-thinking dealers,” Anderson added.
Painter set up NextCar Holding Company Inc. in October with the goal of creating a profitable and sustainable vehicle subscription platform. He noted the company was “launched in response to COVID-19,” which essentially highlighted a need: a viable model for a Car-as-a-Service, or CaaS, for people
Westlake handles indirect automotive leasing for credit unions Credit Union Leasing of America and direct-to-consumer auto loans are offered through Westlake Direct. In addition, consumer title loans are offered through another Westlake’s subsidiary and commercial real estate lending is offered through Westlake Capital Finance.