The Key Benefits of Indirect Auto Lending for Independent Dealerships

By: Web Finance Direct

Does your independent dealership offer indirect auto lending to your customers? In today’s fast-paced market, the ability to offer customers flexible financing options when buying cars can make a huge difference. According to a 2023 report from MIT, there are over one hundred million auto loans currently in the U.S., with a combined value of roughly $1.5 trillion. This has become an increasingly valued selling point for consumers, and if you don’t offer some sort of financing—whether that’s direct dealer financing or indirect auto lending—you may lose business to your competitors who do.

Beyond staying competitive, what are the other benefits of offering indirect auto lending at your independent dealership? Let’s break them down.

Benefits of Indirect Auto Lending for Independent Dealerships

The popularity of indirect auto lending is driven by its convenience for consumers, giving them the ability to easily find their desired purchase and get their loans on the same day.  This style of lending is an excellent solution for independent dealers who may lack the resources to offer in-house dealer financing but still want to offer financing options to customers. Here are some of the perceived benefits of expanding your indirect lending options through a trusted partner like Web Finance Direct.

value of automotive loans growth

Offer Better Rates
70-80% of the total volume of vehicle financing comes via indirect auto lending for a reason. Through indirect auto lending at independent dealerships, customers can choose from a number of different financing offers, allowing your dealership to offer more varied and approachable rates to your customers.

Reduce Overhead Costs & Increase Profits
Looking to offer full F&I services at your independent dealership without incurring all the additional overhead costs? A partnership with Web Finance Direct gives auto dealerships access to an expert F&I team without having to pay for an in-house one. Not only can this reduce your total costs, but it can also help your dealership drive additional profits with minimal effort through back-end offerings such as gap insurance and warranties. Having the ability to offer these kinds of back-end offerings unlocks new financial opportunities since dealers receive a portion of the profits generated by each back-end sale.

Serve a Broader Consumer Base

In addition to offering better rates to consumers, independent dealerships that leverage indirect auto lending are also able to serve a wider range of customers. According to NerdWallet, the average FICO score for used car loans in the U.S. is 638. Through indirect auto lending strategies, however, independent dealerships can sell vehicles to those with less desirable credit. Because indirect lending companies like Web Finance Direct have qualified networks of lenders, they’re able to provide lending options to even those customers who typically do not qualify for in-house loans at dealerships. This is a huge advantage when it comes to serving a wider range of customers.

To discover more of the advantages of indirect financing for businesses of all types, check out our list of benefits here.

Better Customer Service
Indirect auto lending with Web Finance Direct allows independent dealers to spend more time focusing on the things that are most important to them. Among these is providing top-notch service to customers. By outsourcing your F&I and financing servicing, your dealership can focus on providing customers with enjoyable experiences while at your location without having to require potential borrowers to go off-site to source their loans. Additionally, Web Finance Direct can help you connect with qualified lenders to offer your customers more loan options.

How to Decide on an Indirect Financing Service

There are tons of financing companies out there that offer indirect auto lending for independent dealerships. So, what should you be on the lookout for?

A Good Track Record with Profitability 
Many financing services focus on their own profits and take a substantially larger share of profit than the dealers they serve. Financing services with a bigger emphasis on profitability for the client tend to be more trusted by dealers.

A Variety of Products and Services
The best indirect auto lending services for independent dealerships typically offer a wide range of products and services within their system, such as F&I for auto dealerships, correspondent lending for RV, marine, and powersport dealers, and even back-end offerings, like gap insurance and extended warranties. This helps independent dealerships remain competitive in the marketplace while boosting profits and providing a win-win experience for all involved parties.

Prime and Subprime Options
Dealers that are able to direct customers to both prime and subprime loan options could sell to a wider range of potential borrowers. With the right indirect auto lending partner, dealerships can connect with super-prime, prime, near-prime, mid-prime, and subprime consumers. This keeps your dealership flexible and able to serve more customers while being able to more easily adapt to changing markets. By choosing a lender that offers both, you set your business up to withstand the test of time.

Web Finance Direct Checks the Boxes

Ready to take your independent dealership’s indirect auto lending services to the next level? Web Finance Direct offers everything you need to give your customers financing options that work for them. Expand your access to more lenders through our qualified network, access competitive rates and terms, discover our back-end product offerings, and, most importantly, increase your bottom line.

If you’re an independent dealer in need of premium indirect lending and F&I services, Web Finance Direct is the company you can trust. Want to learn more? Connect with us today. Be sure to also check out our new dealer mobile app, which makes indirect auto lending even easier.


What is an indirect loan?

Compared to a direct loan, which is offered to borrowers directly from banks, credit unions, or dealerships, indirect auto loans are typically facilitated by third parties that connect dealers with lenders.

What is an example of indirect lending for independent dealerships?

An example of indirect lending at independent dealerships would be a customer agreeing to buy a used car, submitting their information through the dealership, and gaining access to a variety of loan options that are available through the indirect auto lending company’s network. The consumer makes a choice, the paperwork is completed by the indirect lending partner, and the sale is completed.

How does an indirect loan work?

After selecting their desired purchase, potential borrowers submit their loan application, choose from a selection of approved loan offerings and rates, and then pay off their loan in the agreed-upon timeframe.

How Does Indirect Lending Allow Independent Dealerships to Offer Better Financing Rates?

Because indirect auto lending allows potential borrowers to choose from a number of different loan options, your dealership can provide them with a better variety of rates.

In What Ways Does Indirect Lending Help Independent Dealerships Reduce Overhead Costs and Increase Profits?

By cutting the need for an in-house F&I team, indirect auto lending with a partner like Web Finance Direct can help dealerships connect with more potential borrowers without the need for hiring more staff.

How Does Outsourcing F&I and Financing Services Contribute to Better Customer Service at Independent Dealerships?

By outsourcing F&I and financing services, dealerships can place a higher emphasis on customer service while their indirect lending partners focus on the technical details of each loan.