Web-based indirect lending follows the business model used by financial institutions marketing installment loans at auto, boat, RV and other dealers of high-ticket items. The successful lenders will integrate their lending presence tightly with the end-product Web site itself.

Not surprising the first bank/merchant partnerships have sprung up in the online car sales marketplace, already a multi-billion dollar business in the United States.
Auto-By-Tel, the granddaddy of virtual auto sales (screenshot below), processes nearly 75,000 automobile purchase requests per month. At $20,000 each that’s $1.5 billion per month. Financing is provided by Chase Auto Finance, Key Corporation, and Triad Financial. Leases are from GE Capital.

ABT features “One-Click Financing and Leasing.”
Note the customer testimonial below the menu:
The Auto-By-Tel Acceptance Corporation rate was one and one-half points lower than the bank I’ve used for 25 years!

Collin Wood
Hood River, Oregon

CarFinance.com is featured on CarSmart’s front page.

Another example of Web-based indirect lending is at the popular car information site, CarSmart www.carsmart.com (screenshot below). Visitors to this online emporium will naturally be drawn to the CarFinance.com logo featured prominently on the CarSmart site. The financing site is operated by Barnett Bank at www.carfinance.com (screenshot below).

CarFinance.com is operated by Electronic Vehicle Remarketing, a subsidiary of Barnett Bank.

But, you don’t have to be a Barnett or Chase to become an indirect cyberlender. According to the latest count on Yahoo (below), there are 241 Auto Buyers’ Services and 143 Automobile Buying Directories online. In addition, 4,493 dealers are listed online. By comparison, there are only 125 financing sources listed and 93 of those are lease agents. Among the remaining 32, only two are insured depository institutions; one is a non-bank financial services provider; and five are the captive financing arms of car manufacturers (see table below).