The Cars.com automotive market platform (CARS) announced Thursday, November 4, that it has signed a definitive agreement to acquire the CreditIQ automotive FinTech platform.
The move will provide instant financing for consumers, dealers and lenders, and will create additional revenue streams for Cars.com, the company said. By facilitating entry into the automotive finance market, the acquisition will expand CARS ‘Total Addressable Market (TAM) beyond the automotive advertising and dealership technology markets in which it operates today.
“This latest technological addition to our scalable platform represents our entry into the fast growing, multi-billion dollar auto finance segment, which aligns with our vision to create a frictionless omnichannel experience for buyers and sellers.” said CARS President and CEO Alex Vetter. Thursday (November 4) in a conference call with investors and analysts. “We are excited to enter this market with a powerful digital solution that enables lenders to better compete for auto loans online, saving consumers time and helping bring transactional capabilities to our partner dealers. “
Granting of pre-approved loans
Following the acquisition, dealers will have access to CreditIQ’s advanced digital finance technology, which facilitates the completion of the online finance process on the CARS platform through Dealer Inspire’s 5,200 websites, its Online Shopper digital retail platform and Cars.com Marketplace. The technology also offers automated lending decisions from dealer preferred lender networks, which CARS says is a market differentiator specific to the CreditIQ offering.
“Dealerships will be armed with pre-approved loans, which will save them valuable time in their finance office, enabling them to improve dealer efficiency and enhance the customer experience,” Vetter said during the call.
Consumers will have access to the new interactive online loan selection and approval marketplace that provides instant financing offers and enables a complete purchase transaction from their own homes.
Relieve a key pain point
“Using this technology, consumers can be pre-approved online and obtain financing from the comfort of their own homes, relieving a pain point in their car buying journey,” Vetter explained.
Lenders will have access to a large audience of car buyers in the market. CARS reports that it receives 142 million visits to Cars.com and 247 million visits to Dealer Inspire dealer websites each quarter.
“CreditIQ has developed cutting-edge auto finance technology that will leverage the large audience of highly motivated and in-market car buyers who visit the CARS platform and allow us to generate additional revenue from a new set of clients – lenders. ” noted.
Create a lender-based income stream
For CARS, the acquisition will expand its digital solutions, create a new lender-based revenue stream and increase CARS attribution, the company said in a statement. presentation published with the call for earnings.
“One of the direct benefits of this acquisition will be improved attribution of sales,” said Vetter. “By helping dealers generate more CreditIQ technology related sales, we will further demonstrate Cars.com’s overall sales effectiveness.”
CARS expects CreditIQ technology to be integrated into the CARS platform during the first quarter of 2022. The company will monetize the platform upon deployment, generating revenue directly from lenders on a per-transaction basis.
CreditIQ has also built a Loan-as-a-Service (LaaS) framework that allows auto dealers, marketplaces, OEMs and software vendors to use the same advanced FinTech capabilities.
CreditIQ CEO Bill Liatsis said in a Press release, “We’re excited to join forces with a company that shares our dealer-centric approach, helping retailers be more competitive through the use of better technology. Integration with the CARS connected platform allows us to continue to equip a much broader audience of consumers, dealers and lenders to succeed in the growing digital finance industry.