Rocket Cos. is expanding in auto lending — at a time when that market is red-hot — with a new effort to sell cars to its existing mortgage customers.
Rocket, whose mortgage arm is the country’s largest home lender, announced a partnership Wednesday with the financial technology company AutoFi. AutoFi’s platform lets customers browse and select cars online before heading to a dealership, working with lenders to ensure that buyers are preapproved 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 more than 2,000 dealers in AutoFi’s network. That access is “critical in today’s high-demand auto market,” Farner told analysts during an earnings call.
The vast majority of Rocket Auto’s current sales do not come from the broader company’s base of existing customers, an earlier decision the company made to ensure the auto division could make profits on its own “before really leaning into our client base,” Farner said.
But with some 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 critical.
Rocket Auto, which was started in 2017, facilitated the sale of 13,600 auto units in the first quarter, 5,300 more than in last year's first quarter. The AutoFi partnership will enable Rocket to help arrange financing and insurance for customers who make vehicle purchases, the company said in a press release.
The announcement comes amid the pandemic’s auto lending
Rocket Cos., the parent company of both Rocket Auto and the mortgage giant Quicken Loans, held its initial public offering last year.
