AutoNation CEO Mike Manley: ‘Important’ to have captive lender

AutoNation is “aggressively looking” into restarting a finance company as a source of profits and strategic advantage as it looks to grow its used-vehicle business.

“I think it’s important for the largest automotive retailer in the country to be able to offer finance through a captive where we can tailor-make services, where we can make sure that the relationships that we build with our customers are deep, where we can be flexible to make sure that we account for different cycles, different changes in buying habit,” Manley said last week on an earnings call. “So I am strongly in favor of that.”

A captive lender also is important to competitor Lithia Motors Inc.’s growth plans, and other big retailers are mulling the idea. They are typically profit centers for automakers, though Fiat Chrysler, which Manley led as CEO for two and a half years, didn’t have one.

Manley said he felt it made sense to explore a captive given AutoNation’s volume and plans to expand the AutoNation USA platform of used-vehicle-only stores from 10 today to more than 130 by the end of 2026.

“And I think this is an area where, let me say, ‘aggressively looking’ is probably as close as I would put it right now, because it’s something that I think really could add value in multiple ways, not just from a profit contribution perspective,” he said.

Other large publicly traded groups discussed the idea of a captive during earnings calls this month.

Penske Automotive Group Inc. CEO Roger Penske was asked during a Feb. 9 earnings call what opportunities he saw for his group in the next five to 10 years. “We have opportunities to add, I think, a finance company at some point, maybe,” Penske said.

Asbury Automotive Group Inc. closed on finance-and-insurance product provider Total Care Auto in December but does not have a captive finance company. Asked about the possibility during an earnings call last week, CEO David Hult described Asbury as “in the really early stages” of studying whether a captive would be worthwhile. “It’s too early to tell at this point,” he said.






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