AFC HoldCo LLC, an independent auto finance company that provided auto loans through more than 4,000 dealerships in 40 states, is shutting down, reported Automotive News.
AFC's parent company, Mitsui & Co. of Japan, said today it will liquidate the company because of the downturn in auto sales.
The Japanese trading house acquired 87.5 percent of the Wilmington, Del., company for $63 million in 2007 expecting the auto finance business to expand. But it shrank in the wake of the financial crisis.
“We cannot foresee a recovery in auto finance business,” Mitsui said in a statement.
It said the liquidation will have little impact on its financial statements for the fiscal year ending in March.
AFC HoldCo was created in 2007 through a merger of two companies — Affiliated Financial Corp. and BayQuest Capital Corp. The owners of those firms held a 12.5 percent stake in the new company.
The company is unrelated to Automotive Finance Corp., an independent finance company in Carmel, Ind., that is affiliated with the auto auction chain ADESA Inc.
