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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
S&P views Boeing Capital as a captive finance company of Boeing, given its portfolio mix.
Bob Sattler, vice president of Hyster Capital (www.hyster.com ), the captive finance company for Hyster Co., says he's seeing more refinancing activity than new-truck transactions.
For example, if Fitch believed that CFSC had become less core to CAT's strategic operations and/or adequate financial support was not provided to the captive finance company in a time of need.
When a customer funds from a captive finance company, such as TFS, it allows TFS to leverage its relationship with Toyota and the dealer network in order to remarket a customer's used lift truck equipment before financing the new trucks.
--A change in the perceived relationship between CNHI and CNHI Capital, for example, if Fitch believes that CNHI Capital is no longer core to CNHI's strategic operations or that adequate financial support will not be provided to the captive finance company in a time of need;.
The ratings reflect the company's satisfactory profitability, good asset quality, and integration with its sole parent, Taiwan Acceptance Corp, which is the captive finance company of Yulon Motors Co.