Capital One 2004 Annual Report Download - page 13

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A car buyer carrying a Capital One Blank Check®can go shopping
with no jitters about loan approvals and no doubts about financing
costs. The loan is a done deal, often completed in minutes, delivering
great value and giving the consumer as much bargaining power as a
buyer with cash. By simplifying the car loan process, we’re changing
the whole experience of buying a car.
Capital One Auto Finance now has a $10 billion loan portfolio and
is a big contributor to the Company’s bottom line: $163.8 million in
net income for 2004, up from $99.3 million in 2003 and $10.3 million
in 2002. And as we’ve grown, charge-offs have dropped from 4.62%
for 2003 to 3.28% for 2004.
We entered the business six years ago as part of our long-range
strategy of diversifying beyond credit cards. Auto finance is a great fit
with Capital One’s strengths in direct marketing, risk analysis and
information technology – a combination that lets us tailor each loan
to the customer’s financial circumstances.
We market the loans by direct mail and cross-selling, through car
dealers and on the Internet. Capital One is the largest online auto lender
and the largest direct marketer of auto loans, and with the acquisition
of Onyx Acceptance Corporation®in early 2005, we have become the
second-largest independent auto lender in the United States. The Onyx
acquisition also diversifies our asset base, and it greatly strengthens
and expands our dealer relationships in the Southwest and on the
West Coast.
Looking down the road, we see possibilities for substantial growth.
The auto finance category of financial services is almost twice as big as
the credit card sector. The auto companies’ financing subsidiaries furnish
about a third of U.S. auto loans, but the rest of the market is highly
fragmented, creating a significant opportunity for Capital One to build
market share by offering consumers innovative, no-hassle products
and great value.
With a Capital One Blank Check®
consumers everywhere are
measuring momentum in mph.
10
auto finance
managed loans ($ in billions)
2004
$10
2003
$8
2002
$7
2001
$4
net income ($ in millions)
2004
$164
2003
$99
2002
$10
2001
($35)