A leading player in online loan origination and automobile lease financing, Westar Financial Services Inc. is set to increase its Internet capabilities, said sources in the company.
Westar will bring its Internet program, which is based on online originator Driveoff.com's Internet model, to other companies. This program would allow the members of these organizations to access preferential pricing on both vehicle acquisition and financing on an exclusive basis, said R.W. Christensen Jr., chief executive officer at Westar.
"We haven't made an announcement in that area, but we expect to in the next couple of weeks," Christensen added.
Referring to the Driveoff model, Christensen stated, "Take that same technology, that same process, that same approach and apply it to a large organization composed of millions of consumers. Relying on the buying power of these consumers, offer them more preferential pricing, that then becomes our Internet model."
"Based on the people that we're talking with right now, that's huge. Absolutely huge," Christensen noted.
"Driveoff and Westar are the only ones on the Internet offering bundled transactions where the consumer gets the car and the financing simultaneously in real time," stated Christensen. Through this program, a customer can look up financing options and get a definite price quote on a car without identifying himself, he said.
"Driveoff is unique in that capability. They are able to do that because of their own technology and because of Westar's advance technology for making credit and pricing commitments to its customers." Christensen added.
Both companies formed a partnership with First Union Capital Markets in line with the firm's eConduit, a program which allows First Union to purchase auto loans from Driveoff.com.
Westar, which did the first and fastest completely electronic automobile transaction, is also increasing its securitization volume through other channels. The company recently announced that it would offer its auto lease financing model to dealers and clients of AmSouth Bancorporation, thus forming Westar's private-label unit.
Through its SBAS program, Westar has developed a hybrid of a term securitization and a whole-loan sale. "It's the best of both worlds," said Christensen. "We bundle up whole leases and sell them as though they were whole loans. It's based on a certificate rather than the loans themselves. The investor has a certificate and we continue to service the leases. It allows for a more flexible and informal selling arrangement than a traditional term ABS transaction. It is done through our special-purpose, bankruptcy-remote origination trust," Christensen explained.