Dallas-based Santander Consumer USA Inc., one of the nation’s largest subprime auto lenders, will remain the preferred provider through 2025 of loans and leases to buyers and dealers of Jeep, Ram, Fiat, Chrysler, Dodge, Maserati and other brands of Stellantide car manufacturers.
Stellantis, the company resulting from the merger of Fiat Chrysler and the French PSA group in January 2021, recently agreed to extend the contract with Santander Consumer, doing business as Chrysler Capital. Stellantis acquired its own finance arm last year, suggesting it could let Santander Consumer’s former 10-year contract expire in April 2023.
“This is an example of how we operate as a global company,” said Mahesh Aditya, CEO of Santander Consumer. “A lot of our ability to talk to big European manufacturers like Stellantis has been boosted by our head office in Spain. We have strong relationships with Stellantis and Ferrari.
Madrid-based Banco Santander, SA, which has 153 million customers in the United States, Europe and Latin America, owns the auto finance company, which Santander Holdings USA Inc. privatized last August as part of of a deal valuing the company at $12.5. billion.
“We wanted to be able to strengthen and expand the business and we can do that by better combining some of our consumer deposits from our banking franchise with our automotive business here to allow us to be more competitive on a wider range of lending activities,” said Santander U.S. CEO Tim Wennes.
Netherlands-based Stellantis bought Houston-based financial services group First Investors Financial Services late last year and renamed it Stellantis Financial Services US Corp. The two-year extension places Santander Consumer in a “complementary” role to Stellantis’ company.
“While Stellantis announced in 2021 the creation of its own captive finance arm, SC and Stellantis have continued to enjoy a mutually beneficial working relationship,” Aditya said in a statement.
In his latest regulatory filing before going private, Santander Consumer said it issued $11.1 billion in Chrysler Capital loans in the first nine months of 2021 — a figure that accounted for 53% of its retail installment contracts. He also generated $5.8 billion in Chrysler Capital leases.
The United States was the most profitable country for Banco Santander last year and Santander Consumer was its most profitable arm in the United States, according to its latest earnings report. Santander Consumer has $60 billion in assets and over three million customers. The auto lender which started in 1997 has about 5,000 employees, who work mostly out of the Santander Tower in downtown Dallas.
The contract extension follows the announcement of a new partnership in March for Santander Consumer to provide customer and dealer financing programs for Mitsubishi Motors North America, Inc., based in Franklin, Tennessee, which reported a 45% increase in retail sales for the first three months of 2022.
As a provider of new and used vehicle financing, Santander Consumer has benefited from the dramatic rise in car prices during the pandemic. The average price of a used car jumped more than 35% from March 2021 to March 2022, according to data from the US Bureau of Labor Statistics.
In the coming year, the company will focus on creating an easier and smoother car shopping experience for customers through its partnership with San Francisco-based financial technology company AutoFi, Aditya said. The new technology includes tools to streamline the financing process, including a feature that shows the consumer in advance all of the cars on a dealership’s lot that fit within their budget.
“What we’re going to see more and more of is the sales process becoming more automated and digital,” Aditya said. “So instead of having to go to a dealership, pick out a car, and spend two to three hours trying to get a loan, AutoFi dramatically shortens that process because it creates a process of many, many interactions. faster between dealer and lender.”