DriveTime Automotive Group ownership is eliminating its subprime auto finance company that originated paper with franchised and independent dealerships for the past five years. GO Financial president Colin Bachinsky said the company stopped accepting applications from dealerships late on Wednesday.

During an exclusive phone conversation with SubPrime Auto Finance News, Bachinsky emphasized why DriveTime owners chose to wind down GO Financial, which launched back in 2011. Bachinsky explained the reasoning behind ownership's decision in light of GO Financial pushing out a pair of securitizations last year.

“This is not a performance-based decision at all,” Bachinsky said. “There’s obviously been some negative news tied into the ABS market over the last six months. This is not at all in our belief regarding the stability or the overall sentiment of the ABS market. It has nothing to do with that. It’s all to do with the uses of resources and capital.”

GO Financial currently has about 65,000 accounts in its portfolio, which the company still will continue to collect payments from those consumers until terms are expired “to maximize the return on that asset that we’ve built,” according to Bachinsky.

“We’re happy to see that those loans are continuing to perform and those pools are continuing to perform better than expected and better than what the ratings agencies placed those expectations,” Bachinsky said. “Our securitizations are performing better than expected, and we have not seen any deterioration in our portfolio. We would expect that positive continuing.”

Bachinsky explained that GO Financial soon would finalize the underwriting process stemming from the dealership applications it accepted through Wednesday. By May 27, he expects that the company would have all of its originations completed.

“If we have some straggling documentation requests over the next several months, we’ll be working through those with our dealers. We have a project plan pulled together to mitigate our risk there,” Bachinsky said.

Bachinsky told SubPrime Auto Finance News that DriveTime leadership discussed what to do with GO Financial for the past several months and reached a decision last week. GO Financial’s 530 employees were notified on Monday.

Bachinsky indicated that GO Financial will retain about 250 workers who will manage the current outstanding portfolio, oversee collections and handle other chores associated with customer service. The company plans to have its account holders continue to make payments as they have been while keeping its online payment portal open as well.

“Nothing changes for those people. They will continue to pay GO just like normal,” Bachinsky said.

What eventually will change are the positions for GO Financial’s workforce. Bachinsky highlighted that more than 90 percent of that group is destined for posts within DriveTime’s portfolio of companies. That collection includes:

— Carvana, an online vehicle retailer with a growing network of distribution locations in states such as Florida and Texas.

—SilverRock Holdings, which provides F&I products such as extended vehicle service contracts, global positioning system (GPS) theft recovery products, guaranteed asset protection products (GAP) and auto insurance solutions to consumers through independent and franchised dealers as well as the newly rebranded.

—Bridgecrest Acceptance, which launched earlier this year as a licensed third-party servicer for servicing installment contracts for DriveTime and other affiliated finance companies.

 “It’s definitely difficult, being a part of GO since the very beginning,” Bachinsky said. “From that perspective, it’s difficult, but I recognize it’s a business decision. It’s just a continuous evolution of our overall model and family of companies.

“The good news is we’re a part of this larger group of growing companies,” he continued. “All of those companies are continuing to grow. Our owners are looking at it from the standpoint of looking at the different businesses that are growing and what resources are available; just trying to reallocate those resources both in the form of capital as well as people back toward these other businesses.”