Capital One vs Bridgecrest: Servicing Carvana and DriveTime Subprime Loans
Former Executive at Bridgecrest
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Capital One vs Bridgecrest: Servicing Carvana and DriveTime Subprime Loans(February 24, 2025)
Former Executive at Bridgecrest
Interview Transcript
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Can you elaborate on that for me? Could you provide an illustrated history of Carvana's loan servicing from before you joined, through your tenure, and how you envisioned its evolution? What were the key areas they focused on and aimed to develop?
A great example that might illustrate this is the DriveTime portfolio. At the time of sale, every vehicle had a GPS unit installed, which Carvana wasn't interested in due to reputation concerns. They wanted to operate more broadly in the credit spectrum, even though they still leaned subprime. Repo policies are affected by having or not having a functional GPS device on the vehicle. DriveTime's policies assumed most vehicles had GPS. As Carvana's portfolio grew, and during my two years there, we redesigned more repo-specific policies to account for the fact that Carvana's portfolio, with 0% GPS, had different recovery curves. I think that's an example of what we were working through.
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