Pagaya, a financial technology company, publicly announced the expansion of its consumer credit offering into auto loans, with hundreds of millions of dollars already invested in the space and multiple lending partners, including Flagship Credit Acceptance and Foursight Capital, both leading providers of auto finance solutions.
Read More: iProov Partners With TRUSTDOCK to Bring Genuine Presence Assurance to e-KYC Across Asia-Pacific
Led by Pagaya’s new General Manager of Auto Finance, Robert McDonald, the expansion comes at a time when American consumers rely on their cars more than ever and are purchasing new and used vehicles in droves. The automobile’s importance has been elevated during the pandemic. It is no longer just a means of transportation, but a safe way to experience concerts, weddings, rallies, movies, and graduations.
“Pagaya’s investment in auto finance ultimately increases the availability of credit to borrowers. This means that auto manufacturers and auto dealers will be able to get more cars on the road, Pagaya’s lending partners will be able to better monetize their marketing spend, and more consumers will have access to better-priced loans,” said McDonald. “Everyone wins.”
McDonald was previously Vice President, Head of Auto and Equipment-Structured Finance at Goldman, Sachs & Co. He brings a wealth of invaluable experience, which will help drive Pagaya’s expansion in this space.
In addition to unlocking new opportunities for marketplace lenders, this move into auto finance has enabled Pagaya to work with original equipment manufacturers (OEMs) and their wholly-owned captive finance companies to bring more borrowers into their ecosystem. Upwards of 60% of a captive company’s borrowers remain loyal for future vehicle purchases. Pagaya’s ability to partner with OEMs to increase consumer conversion into an OEM’s ecosystem creates sustainable long-term value.
“We are excited to take the lead in this space and to provide better options for lending platforms looking to issue more loans and for consumers in need of a reliable means of transportation,” said Gal Krubiner, Pagaya’s co-founder and CEO.
Read More: The Future of LegalTech and AI
