A Texas company that specializes in supporting car leasing through credit unions has acquired GrooveCar Family of Brands, a Long Island, N.Y., company that provides credit unions with online and mobile platforms that allow members to pick cars and arrange loans.
The buyer, Fusion Auto Finance of Bedford, Texas, and GrooveCar of Hauppauge, N.Y., announced the deal Aug. 10, but did not disclose the price.
Fusion and GrooveCar had previously worked together to create CU Xpress Lease as a joint venture. GrooveCar provided the indirect lending platform, marketed the program to dealers, acted as a liaison on behalf of the credit union, and managed the dealer relationships.
Fusion owns each leased vehicle, bears the value risk when the vehicle leases mature, paying the credit unions full residual value. CU Xpress Lease has a portfolio exceeding $5 billion and more than 100,000 vehicles.
Jim Calvert, Fusion's CEO and majority owner, founded the Dallas-Ft. Worth company in 2004 to offer a leasing option to credit unions. He said acquiring CU Xpress Lease will allow Fusion to make the program more efficient and competitive.
“GrooveCar provides an exciting opportunity for us to strengthen our relationships with our credit union partners and to accelerate our growth plans into new markets,” Calvert said. “We're excited to welcome the GrooveCar team to our organization and look forward to working together to further enhance our product offering.”
The GrooveCar Family of Brands also includes GrooveCar Direct, an online auto buying platform for credit union members. The acquisition also includes CU Xpress Lease CA, CUAutoCoupon and GrooveCar, Inc.
GrooveCar announced on July 31 that it had gained alliances with 22 credit unions encompassing assets of $5.7 billion and 550,121 members during the second quarter. The largest were Bay Ridge of Brooklyn, N.Y. ($200 million in assets, 8,139 members), Educators Credit Union of Waco, Texas ($397.9 million in assets, 27,848 members), Justice Federal Credit Union of Chantilly, Va. ($713.5 million in assets, 58,106 members), Money One Federal Credit Union of Largo, Md. ($124.9 million in assets, 12,544 members) and State Employees Federal Credit Union of Albany, N.Y. ($3.5 billion in assets, 354,607 members).
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