Carputty Rolls Out Flexloan to Expand in Nonprime Markets

Carputty recently introduced a new loan called Flexloan, and it aims to reach more people who’ve had trouble getting car loans.

The company partnered with Westlake Direct so it could extend its reach to subprime borrowers. Carputty already has its Flexline product, a variable line of credit that assists individuals who are funding multiple cars. Flexloan is unique — this is a single-vehicle loan created for borrowers establishing or repairing their credit.

Flexloan is an innovative single-vehicle loan, but with some variations. The loan is offered from around $8,500 up to $42,000, with terms of two to six years (24 to 72 months). That leaves individuals options to select an auto and choose comfortable payments.

Patrick Bayliss, Co-Founder and CEO of Carputty, said: “This marks a seminal moment for Carputty. As we continue to forge partnerships across the automotive ecosystem, the overwhelming demand for our Flexline model validates our vision for the future of auto financing and ownership.”

Why are subprime lenders interested? Smarter credit models broaden the customer base for the lender without introducing additional risk. They can use this AI product to price better and reduce defaults. This, in turn, allows subprime lenders to reach overlooked customers. 

Aligning with Westlake Direct is important because, as one of the big players in the nonprime auto industry, it’s associated with dealerships that sell to subprime buyers. With that kind of reach, Carputty is able to offer Flexloan to wider audiences, particularly where markets are thin.

The company’s move into California gives it access to the largest car market in the country. Carputty uses a tool (V³ Valuation) that keeps track of a vehicle’s current value. It helps customers decide whether it makes financial sense to trade or refinance their vehicles.

Carputty can afford to make these moves thanks to the funding it received last year.

Carputty did not fund its growth solely out of retained earnings. Last year, it received new financing of more than $80 million. Most of that was in the form of a $75 million warehouse line. The borrowing enabled the company to expand its products and reach.

“As we continue to forge partnerships across the automotive ecosystem, the overwhelming demand for our Flexline model validates our vision for the future of auto financing and ownership.” — Patrick Bayliss, CEO of Carputty

Investors include TTV Capital, Fontinalis Partners, and Porsche Ventures. The cash gives Carputty room to grow as well as create new underwriting and pricing features designed to speed up approvals and reduce payment shock.

Flexloan can help subprime borrowers afford car purchases. A successful rollout should help car dealers increase approvals with fairer pricing. Subprime borrowers have another way to get a less costly car.