Updated: Mar 24
A fintech company empowering the everyone economy by supporting and investing in BHPH dealers
OKLAHOMA–Carpay, a loan management software company focused on Buy Here Pay Here (BHPH) dealers, closed on a Series A Round in January ‘21, bringing the total raised to $9.9M. The round was led by AutoTech Ventures, with additional participation from Social Leverage, Amplify.LA, Pipeline Capital and FJ Labs.
Brandon Cavalier, Co-Founder and CEO of Carpay shares that “our mission at Carpay is to make credit more accessible to the overlooked and underbanked American consumer, and we do that through these consumers' largest or second largest credit line: their auto loan. When a person with less-than-stellar credit goes to buy a car, and Bank of America or Wells Fargo won't lend them credit, there's a network of used car dealers that will give these consumers a loan to buy the cars off of their car lot; and this model of on-lot financing is called ‘Buy Here Pay Here’ (BHPH).”
While most people have never heard of BHPH, it quietly makes up around $100B of America's outstanding auto debt. Where Carpay comes into this asset class is in two ways:
Carpay's Loan Management Software helps these BHPH dealers manage their loan portfolios and keep delinquencies under control. It helps get late customers caught up, and prevent others from falling behind, by making it easier for the borrowers to pay for and manage their auto loans themselves.
Carpay Credit (launching Q2 '21) will then give these dealers a line of credit secured by their loan portfolio, so that they can stock their lot full of cars and keep issuing more credit to more of these consumers.
Cavalier explains that “by helping the asset-class to be better-serviced, collecting more data, and then using those two improvements to provide dealers access to more capital, the underbanked consumer wins. Without the BHPH dealers, these consumers would have no option for auto loans, so we see the dealers as being very important to the livelihoods of the people that Wall St. overlooks.”
Carpay isn’t just good for consumers, it benefits dealers as well. It has a suite of products to help reduce delinquencies, give time back to management, and provide certain insights into the dealers’ loan portfolios. Since Carpay’s launch in 2016, the company has onboarded more than $1B of BHPH loans to their servicing platform and has given over 100,000 consumers control and transparency into their auto loans that they otherwise wouldn’t have had. The effect? Borrowers from all of Carpay’s dealers are 20% less delinquent if their last payment was made by themselves through Carpay vs. made directly to the dealer through traditional means (over the phone, in-person, mail).
Alexei Andreev of AutoTech Ventures says that "long term, we are very intrigued by the additional business opportunities beyond the enterprise software sales. We believe that the company is uniquely positioned to bring new financial services into the BHPH space, reducing car ownership barriers for all demographic segments of the US economy."
“We're all excited that AutoTech Ventures, Social Leverage, and the other participants in this funding round recognize Carpay's value in the BHPH market and believe in our role in empowering the Everyone Economy.” - Cavalier
Carpay is a loan management software for BHPH dealers. It helps them manage their portfolio by giving their borrowers multiple options to pay, automating all reminders to their borrowers, and giving the dealers a suite of tools to keep their loans performing. Carpay is also expanding its services by providing capital so dealers can grow their businesses. The company was founded in 2016 and is headquartered in Oklahoma. Visit www.carpay.com to find out more.
From Automotive Ventures: