Financial Titans Ignite Web-Based Auto Loans

Three financial giants announced Monday that they have partnered to create DealerTrack, a Web-based system for car dealers to use when processing consumer auto loans.

The founding companies, J.P. Morgan Chase & Co., AmeriCredit Corp, and Wells Fargo & Co., hope the new company will "jump start" the auto industry's conversion to a Web-based car loan process.

DealerTrack will allow dealers to submit a consumer's credit application online to multiple lenders at once and to access real time application and contract status information from each lender.

"This jointly owned company creates the foundation to Web-enable the auto financing process," said AmeriCredit chief executive officer Michael R. Barrington. "We also intend to broaden the base and involve other interested lenders and non-lenders as potential alliance partners in the company."

The new company will be independent from its founding members and will be headquartered in a separate facility in Long Island.

By All Accounts

In addition to consumer loan tracking, the DealerTrack system will allow each car dealer to access online statements with updated financial information for that dealer. According to the companies, this feature will allow dealers to "keep month-end accounting efforts to a minimum."

Dealers will also have access to current interest rates and programs, be able to run payment calculations, compare various loan products and access customer payoff information.

"Lenders now have a more effective channel to conduct business with their dealers via the Web, so that many of a dealer's questions, which previously required a phone call or fax to a lender, can now be resolved by accessing DealerTrack," said Wells Fargo executive vice president Dick Schliesmann.

There are already over 4,000 dealers signed up to use the new platform and, in addition to the three founding partners, DealerTrack is already working with "several other" financial institutions to connect them to the network.

Not a Loan

DealerTrack is not the first time that rival financial companies have joined forces to create a Web-based business to simplify the lending process.

In March, Microsoft (Nasdaq: MSFT) partnered with Chase Manhattan Mortgage, Freddie Mac, GMAC-RFC, Norwest Mortgage and Bank of America to form HomeAdvisor Technologies, Inc, a company designed to simplify the home loan process.

In addition to offering consumers financing information online, the HomeAdvisor Transaction Platform Division combined Microsoft technology with electronic loan decision and processing tools from its partners to streamline and automate all aspects of the mortgage process.