Who owns drive time

By August it had closed more than rental franchises, leaving about 40 still in operation. The firm planned to completely end that type of business when its last franchise contracts expire within ten years. In June Ugly Duckling became a public corporation. It was underwritten by Cruttenden Roth Inc. Later in the month more stock was sold for a total of 3. In Ugly Duckling continued to raise money through stock sales and other means. Some stock analysts were surprised by the success of this offering, since many stocks in the subprime auto sales and financing industry had declined recently by about 30 percent.

In the February 12, Wall Street Journal, one of Kramer Spellman's managers stated, "There are good companies and bad companies and I think we're seeing some of the shakeout. That same article described how Ugly Duckling was taking advantage of the problems in other car financing companies.

In early Mercury Finance admitted to "accounting irregularities. Whatever their problems Under the terms of that Revolving Credit Facility, GE Capital had the power to limit Ugly Duckling's decisions such as incurring more debt, making loans or cash advances to company leaders, paying dividends, and merging with another firm. Ugly Duckling aggressively opened several used car dealerships in Petersburg, Florida area.

The same week it also opened its first dealership in Las Vegas. Later in the year it added two other dealerships in New Mexico. By August 1, , Ugly Duckling operated a total of 24 dealerships in Arizona, New Mexico, Florida, Texas, and Nevada, which made it the largest public "buy here, pay here" chain in the nation.

In addition, Ugly Duckling by August 1, , operated a total of 64 branch offices in 17 states. These offices had purchased finance contracts from about 2, third-party dealers through Champion Financial Services, Inc. The finance contracts purchased by Ugly Duckling from third-party dealers usually required customers to buy casualty insurance within 30 days of purchasing a vehicle.

Most bought insurance on their own, but Ugly Duckling was able to purchase a policy for them and then charge them the premiums.

The firm through its Drake Insurance Agency subsidiary contracted with American Bankers Insurance Group to force customers to get their car insurance.

By the end of December Ugly Duckling had signed up through this process about 1, customers. Although not a major part of Ugly Duckling operations, the firm was considering expanding its services to cover life, disability, and unemployment insurance. In September Ugly Duckling announced that it was adding a third revenue generator to its portfolio, to supplement its used car sales and Champion Financial income. It formed Cygnet Finance, Inc. Ugly Duckling's leaders felt that many of the nation's independent dealers were undercapitalized and had trouble gaining access to more traditional sources of financing, so Cygnet could bridge that gap.

By the end of Cygnet had hired a former GE Capital employee to be Cygnet's vice-president, tested its proprietary software used to closely monitor participating dealers, and enrolled its first independent dealer in its finance program. To promote these various services, in November Ugly Duckling hired two new advertising firms. With the number of Spanish speakers rapidly growing in the Southwest, that last move was indeed timely.

Since loan defaults were an obvious problem in Ugly Duckling's industry, the firm used its Champion Acceptance Corporation to verify loan application data and use collection techniques for both owned and serviced loans.

This expansion was reflected in the number of company employees. From employees on December 31, , the firm had increased to 1, employees by early September Although Ugly Duckling had made major strides in just a few years, it faced some tough competitors in the late s.

The used car business really boomed in the s, with many players entering this volatile industry. The basic incentive was that used cars earned about a 10 percent profit per car, compared with just 2 percent for each new car sold. Many new car dealers and rental car agencies began selling their good used cars.

In addition, several large companies entered the used car market. For example, Circuit City started CarMax, a huge chain of used car dealerships. Of course, many of these operations sold newer cars to more affluent customers than those targeted by Ugly Duckling.

Although Ugly Duckling gained most of its revenue from used car sales, that percentage dropped significantly from 82 percent in to 71 percent in The firm in saw major increases in its revenues from interest income, gain on sale of loans, and servicing and other income.

Since the company financed almost all the cars it sold, one analyst in the November 11, Washington Post said Ugly Duckling was "a bank masquerading as a used-car lot. After building up a 10 percent holding and gaining voting control from one of National's majority owners, Garcia sold his shares back to the company at a premium. Ugly Duckling closed its Champion Financial Services branches in early to focus on lending operations at its own dealerships.

At the time, the company was providing financing or collections assistance to two bankrupt auto lenders, First Merchants Acceptance Corp. CEO Greg Sullivan told the Arizona Republic that Cygnet, which provided financing to other dealers, was sold off to make Ugly Duckling more of a pure player in used car sales for investors. Garcia soon formed the Zoomlot. Ugly Duckling's other businesses, apart from the dealership chain, were divested by December Ugly Duckling also was embracing the Internet as a way to connect to its own customers.

According to Sullivan, many were leery of applying for a car loan in person due to the potential embarrassment of rejection. This allowed the transaction, from car purchase through the life of the loan, to be managed through one source. Ugly Duckling sold 46, used vehicles in According to Sullivan, it was the only dealer actively acquiring others that year. By the beginning of , the chain had 72 dealerships, making it one of the largest of the country's 60, independent car dealers.

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