RocketCos. is expanding into the auto loan business — at a time when that market is booming — with a new push to sell cars to its existing mortgage customers.
Rocket, whose mortgage arm is the nation’s largest home lender, announced a partnership with fintech company AutoFi on Wednesday. AutoFi’s platform allows customers to browse and select cars online before heading to a dealership, working with lenders to ensure buyers are pre-approved for loans.
AutoFi’s lending partners include JPMorgan Chase, Ally Financial, Ford Motor Credit, Royal Bank of Canada and Santander, according to its website.
Rocket Companies CEO Jay Farner said the partnership will increase the company’s access to vehicle inventory through the AutoFi network’s more than 2,000 dealerships. That access is “critical in today’s high-demand auto market,” Farner told analysts on an earnings call.
The vast majority of Rocket Auto’s current sales do not come from the company’s existing customer base, an earlier move the company made to ensure the auto division could turn a profit on its own “before really look at our customer base,” said Farner.
But with a few years of experience under its belt, Rocket Auto has just “started to scratch the surface” in cross-selling, he said, adding that expanding vehicle inventory through the AutoFi partnership will be essential.
Rocket Auto, which started in 2017, facilitated the sale of 13,600 auto units in the first quarter, up 5,300 from the first quarter of last year. The AutoFi partnership will allow Rocket to help arrange financing and insurance for customers purchasing vehicles, the company said in a press release.
Announcement comes amid pandemic auto loans boomand marks a new step in the digitalization of the car buying experience.
Rocket Cos., the parent company of Rocket Auto and mortgage giant Quicken Loans, staged its IPO last year.