Deals from Drive Financial Services and DriveTime, two regular nonprime auto ABS issuers, will no longer be in danger of being confused for one another. That is because the Dallas-based Drive Financial recently sued Phoenix-based DriveTime in order to force that company to stop using the name DriveTime in relation to its ABS deals, according to a source close to the situation.
Drive Financial, which is partly owned by Bank of Scotland, felt the name DriveTime was too similar and wanted to ensure there was no confusion where the two companies business lines cross, such as in the non-prime auto ABS market.
Under the terms of the suit, DriveTime must designate its ABS transactions as coming from DT Auto Finance, instead of the full name DriveTime. DriveTime also has a retail auto sales division, but will not have to change its name in connection with the activities of that division, because Drive Financial has no equivalent business, and is only involved in auto finance.
Drive Financial bills itself as "a specialized consumer finance company engaged in the purchase, securitization and servicing of retail installment contracts originated by automobile dealers," and deals mostly with nonprime loans. DriveTime says it strives to be "the auto dealership and finance company of choice for people with less than perfect credit."
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