The latest step forward comes from AutoGravity, a start-up based in Irvine, Calif., whose smartphone app for auto financing is gaining some traction. The app allows consumers to apply for and obtain approval for auto financing in a matter of minutes, and is now accepted at thousands of dealers across the country. It has been downloaded more than 500,000 times via the Apple and Android app stores.
In July, Volkswagen’s credit arm bought a stake in AutoGravity for a reported $30 million. That follows an equity investment by Daimler, parent of Mercedes-Benz, in February. AutoGravity started as a project within Daimler’s financing arm and was set up as an independent company in 2015.
The app addresses one of the most tedious steps in the car-purchasing process: waiting around, sometimes for hours, while the dealer tries to line up a loan. Nowadays, it’s often quite a sum. Americans borrowed an average of $30,689 to buy new cars in July.
Individual banks also make it possible to apply for loans by smartphone or online. But AutoGravity generates loan offers from up to four different institutions, allowing users to compare rates, payments and costs.