McLEAN, Va. — Capital One Auto Finance's involvement in the auto lender market has expanded throughout the years since the company first entered the business in 1998 with the purchase of subprime lender Summit Acceptance Corp.

Not long after first entering the market, Capital One expanded the spectrum it finances through its 2001 acquisition of PeopleFirst, a super-prime lender. Next, in 2005, the company sought to cover the entire lending spectrum by purchasing prime/near prime lender Onyx, and also integrated Hibernia's prime portfolio that same year.

"Capital One Auto Finance has grown tremendously over the years since first entering the auto lending business in 1998," Steve Thibodeau, vice president of Capital One Auto Finance, recently told SubPrime Auto Finance News.

Capital One Auto Finance has very strong brand recognition, according to Thibodeau, who characterized his company as positioning itself to be an "end-game" player in the auto finance business.

"Additionally, we are known for our rapid decision making capabilities, as well as our continuous efforts to improve customer experience," he noted. "This has never been more evident than in the integration of Onyx and Hibernia.

"As a company, we have made the concerted effort to integrate the best practices of Onyx and Hibernia and combine them with the best practices of Capital One. With this in mind, we believe we can integrate into a full-credit-spectrum lender and serve our dealer customers in the best way possible," he added.

Capital One is Seeking Dealers

The company is constantly seeking out new long-term relationships with dealer groups and independent dealers who have a track record of success, Thibodeau highlighted.

"Through Onyx, we have learned how successful partnerships with independent dealers can be, and we look forward to expanding the number of partnerships with independents in the near future," he told SubPrime Auto Finance News.

Through the recent expansion into a full credit spectrum, Thibodeau said Capital One is in a strong position to become a dealer's primary lender of choice.

"Capital One has an extensive and powerful sales organization, and we encourage our dealer customers to utilize this group to answer any questions they may have about our programs, company or about our full-credit-spectrum offerings," he commented.

"Additionally, we encourage our dealer customers to please visit our Web site and visit us in person at the upcoming National Auto Dealer Association's conference," he continued.

Capital One's Business Model

Discussing his company's business model, Thibodeau said, "Through the course of evolving into a full-credit-spectrum lender, Capital One has always embraced information-based strategy to drive its successful business model. IBS incorporates three core tenets of state-of-the-art technology, testing and analysis and flexible operations and strategies, to drive smart business decisions."

He went on to explain that the company's IBS program has helped to ensure that Capital One is providing "the right program, at the right time, at the right place, for the right reason."

The goal of this strategy is to ensure the most competitive pricing for the largest cross-section of consumers, covering the entire credit spectrum, Thibodeau said.

"Capital One's IBS business model has proven to be successful thus far; however, we are always looking to improve upon our dealer's customer experience," he said. "As we continue to evaluate the best practices from Onyx and Hibernia and integrate the best practices from Capital One, we are looking forward to integrating smart model-based decisioning with a personal component to improve our dealer customer experience.

"Through our recent acquisitions of Hibernia and Onyx, we have been able to build a very talented buyer organization, with experience across the full credit spectrum and long-standing relationships with dealerships across the country," he continued. "We are working quickly to integrate our multiple finance operations so that we can provide dealers with a full-credit-spectrum program through buyers they know and trust."

Looking Ahead

Thibodeau referred to Capital One as one of the largest independent auto lenders in the nation, in addition to noting that the company is also one of the largest direct mail and online vehicle financing providers.

"In the next few years, our company's goal is to aggressively grow our loan portfolio even further," he said. "In the last year and a half, we've made some acquisitions that have added to our growth right off the bat. Those acquisitions, combined with other cutting-edge programs that we designed, will allow us to continue our growth trajectory into the future.

"Additionally, as we grow into a full-credit-spectrum lender and one of the largest lenders in the nation, we have the economies of scale, which enable us to continue our growth and become a primary lender of choice for our dealer partners," he continued.

Although relatively traditional in some respects, the company also works to break new ground, Thibodeau said. For example, the company recently introduced DriveOne, at, to help drive incremental sales to the company's dealer partners.

"We understand that it is important to have a win-win relationship with our dealer partners, and we will continue to strive to develop programs that have significant value to our dealers and which will help drive vehicle sales for these partners," he pointed out.


This summer, Capital One Auto Finance announced it has partnered with Zag to cater to the growing number of consumers going online to research vehicles. Through the partnership, Capital One launched DriveOne.

Capital One Financial Corp. said it discovered through a recent study that more than 60 percent of Los Angeles-area car buyers are frustrated by the purchasing process. Company executives noted that 66 percent of study participants said they found price negotiation and financing the most stressful aspects of purchasing a vehicle, and 93 percent of consumers questioned said they would prefer to conduct their buying process, including financing, online.

In response to this demand, Capital One said it partnered with Zag to leverage a technology and services platform that enables consumers to locate their desired vehicle and arrange financing online, with the price being guaranteed by a participating dealer at no higher than Kelley Blue Book's New Car Blue Book Value, or what the unit is currently selling for. Through the program, consumers can locate a participating dealer and arrange financing.

"Consumers are increasingly using online tools to research various aspects of a car's purchase, making more informed buying decisions," explained Jack Nerad, executive editorial director and market analyst for Kelley Blue Book.

"Capital One's DriveOne process puts the purchasing power in the hands of car buyers by moving vital parts of the transaction — from research to financing — online," he continued. "This is a significant evolution in the auto-buying process."

Working with Zag, Capital One's DriveOne program offers consumers the ability to "build" their vehicle of choice. After consumers "build" or configure a vehicle online, executives said they will receive a Kelley Blue Book New Car Blue Book Value price for a new unit from a participating dealer. If it's a used vehicle, the consumer will receive a quote.

At the dealership, consumers may choose the vehicle they identified and qualified consumers can fund their loan online directly through Capital One, or they can elect to use alternative financing. Moreover, DriveOne said it provides consumers with a tool that can estimate the value of trade-ins.

"DriveOne was designed to meet the changing needs of the industry, and offers a win-win for both consumers and dealers," explained Dave Lawson, chief executive officer and president of Capital One Auto Finance.

"Consumers get a simplified auto-buying process, with the convenience of online shopping and the elimination of frustrations associated with haggling over price," he continued. "Dealers get an incremental sales base to build their business and expand their offering."

Brian Reed, vice president of Capital One Auto Finance, added, "The survey suggests that area car buyers aren't taking advantage of the online tools that can impact their wallets. And we know that shopping around for financing, in particular, can uncover significant opportunities to save money and hassles. The savvy consumer is one who is equally as aware of their financing options as their vehicle options."

Need More Information?

In conclusion, Thibodeau said, "If there are dealers that are looking for additional lenders, we encourage them to reach out to our sales organization, visit our Web site at, or visit our booth at the upcoming NADA convention."