Captive Finance Company

What Does Captive Finance Company Mean?
A subsidiary whose purpose is to provide financing to customers buying the parent company's product.

Investopedia explains Captive Finance Company
The captive finance company is usually wholly owned by the parent company. Although there are numerous examples of these, the best ones occur in the automotive industry. Each of the "big three" automakers has a captive finance company. General Motors has General Motors Acceptance Corporation (GMAC), Daimler Chrysler has Chrysler Financial, and the Ford Motor Company has Ford Motor Credit Company (FMCC).

Related Terms

Bailout
Bank
Finance
Money
Parent Company
Subsidiary
Wholly Owned Subsiduary
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