Captive finance company

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Captive finance company

A company, usually a subsidiary that is wholly owned, whose main function is financing consumer purchases from the parent company.

Captive Finance Company

A subsidiary financial institution whose primary or sole operation is the provision of credit for customers of the parent company. For example, a captive finance company owned by a dental corporation may make loans for the expensive dental services. Captive finance companies have historically been prominent in the automotive industry, easing the purchase of cars from whichever company owns them. Captive finance companies are typically wholly owned subsidiaries.
References in periodicals archive ?
* Captive finance companies, banks more aggressive competitors.
There are 624 captive finance companies operating in the islands, managing $19 billion in assets and writing in excess of $4 billion in premiums every year.
It seems likely that these firms were financing motor vehicle loans using the captive finance companies of manufacturers.
Fitch believes CFSC's comprehensive funding platform, in combination with the financial strength of its parent, is consistent with other captive finance companies.
It offers comprehensive remarketing solutions to auto manufacturers, captive finance companies, lease and daily rental companies, financial institutions and wholesale auto auctions throughout the US and Canada.
Moody's currently rates 11 Chinese auto ABS transactions sponsored by auto captive finance companies which are partially or wholly owned by global auto manufacturers.