In 1996, Garcia listed the company, then based in Phoenix, Arizona, on the NASDAQ Stock Exchange,[10][18] where the company traded as „UGLY”; [19] This raised $170 million for the company. [20] By this time, the company had gained regional renown; William Gibson, an analyst for Cruttenden Roth, told Investor`s Business Daily in 1996: „You go to Tucson or Phoenix and people know The Duck. He is an icon in these cities. [16] Just because you`ve been unlucky and have bad credit doesn`t mean you don`t have it. DriveTime has been based in Phoenix since its inception and moved its headquarters to a new 97,000-square-foot space in Tempe in November 2015. Carvana then moved to DriveTime`s former factory in Phoenix. [8] [41] Also in 2015, the company created a new sister company, SilverRock Group, which provides insurance and warranty services. [13] GE Capital increased its line of credit to $100 million in 1996. With new sources of funding, Ugly Duckling launched a major expansion program. The company purchased five dealerships and $25 million in financing contracts from Seminole Capital Corporation in the Tampa/St. Petersburg area.
For $26.3 million, Ugly Duckling purchased assets of E-Z Plan Inc. of San Antonio, Texas. It also opened its first dealerships in Las Vegas, Nevada, and two dealerships in New Mexico. As of August 1997, the company had 24 dealerships in five states and 64 branches in 17 states. Through these stores, Champion purchased finance contracts from 2710 dealers. Many of these contracts required accident insurance; Ugly Duckling got into the insurance business and bought policies for those who were required to do so. Ugly Duckling`s Drake insurance agency did this through American Bankers Insurance Group and offered other types of insurance as well. [16] DriveTime is a privately held company headquartered in Tempe, Arizona.
[3] The company`s business model focuses on selling owned vehicles to car buyers. [4] It uses a proprietary credit scoring model to finance in-house car purchases from its dealerships,[5][6] including subprime loans. [7] In 2013, DriveTime became the majority owner of Carvana; The two companies are operated completely separately. [44] Carvana was founded in 2012 and rolled out nationally in November 2013. [45] The Phoenix-based company is an online used car dealership. Car buyers use Carvana`s website to view inventory, request financing, and arrange collection or delivery. The company has deployed car vending machines in major cities such as Atlanta, Georgia, and Nashville, Tennessee, where customers can pick up cars purchased online. [36] [46] The start-up can rely on DriveTime`s existing infrastructure, such as service facilities. [47] [48] In 2017, the company changed its business model to focus on offering customers new low-mileage vehicle models. Ugly Duckling had two car dealerships in 1992, one in Phoenix and one in Tucson. The company bought three more dealers, but added four new ones, giving them a look comparable to a standard dealership rather than the unpleasant appearance of most subprime lots.
[16] A dealership closed in 1994 because it did not live up to the new image. Ugly Duckling also tried an experiment in Gilbert, Arizona, selling newer and more expensive cars, but eventually sold this dealership in 1995. [16] By 1999, however, Ugly Duckling had left the financing industry; Garcia bought Cygnet and Champion closed. At the same time, Ugly Duckling developed its own software, and CEO Gregory Sullivan said that in 1999, this company was the only one to buy car dealerships. Markets added included Orlando, Florida, and Richmond, Virginia. In 2005, Austin, Texas and Norfolk, Virginia were added, with locations in Charlotte, North Carolina and Nashville, Tennessee.[16] [31] [Non-primary source required] As the business expanded, Auto Dealer Monthly and AutoTrader.com recognized Fidel as the leading independent retailer. [32] [Non-primary source required] At the end of 2006, DriveTime had more than 90 locations in nine states. [22] The company opened its 100th DriveTime dealership in Concord, North Carolina, northeast of Charlotte in 2007. [33] The Company also announced the completion of a new credit service center in Mesa, Arizona, replacing another in Gilbert, Arizona, with 100 employees hired immediately and another 300 planned. [34] [Non-primary source required] Ugly Duckling became profitable and increased its workforce from 652 in early 1997 to 1776 nine months later.
A larger percentage of the company`s revenue came from financing, and the Washington Post of November 11, 1996 declared Ugly Duckling to be „a bank masquerading as a second-hand parking lot.” [16] Thomas S. Duck, Sr., retired from insurance sales and founded Ugly Duckling Rent-A-Car Corp. in 1977. Until 1985, when the car rental business was hugely successful and companies like Budget Rent a Car did well,[16] Duck`s company was the fifth-largest car rental company in the United States,[15] with 600 franchises. Finally, Ugly Duckling filed for bankruptcy in 1989; [15] Ernest Garcia II, who studied business administration at the University of Arizona in Tucson and was convicted of his role as a straw borrower in the collapse of the Lincoln Savings and Loan Association,[17] founded Duck Ventures, Inc. in 1990 and purchased the assets of Ugly Duckling. He went on to found Ugly Duckling Holdings, Inc. and made Duck Ventures a subsidiary. [16] In 1994, Ugly Duckling purchased Champion Financial Services from Steve Darak and appointed Darak Chief Financial Officer. The company had a new source of revenue – buying installment contracts from other merchants who were still considered subprime, but from wealthier clients than Ugly Duckling usually had. [16] DriveTime buys 150,000 cars each year at various auctions.
[8] After the auction, the company subjects purchased cars to a 14-day inspection at one of its 24 inspection centers. It makes the necessary repairs before sending the vehicles to its dealers. About 8% of cars purchased at auction do not pass the inspection process and are not sold through their dealers. [9] DriveTime encouraged its employees to start new businesses. In the early 2010s, she launched GO Financial. The new company started in 2011 as a DriveTime division, offering risky retail financing before becoming its own company. [4] In 2013, DriveTime launched Carvana as an e-commerce used car dealership operated by Ernie Garcia Jr. in Phoenix. [36] [37] CarMax of Richmond, Virginia, filed a lawsuit in U.S. District Court, alleging that DriveTime offered bribes to CarMax sellers for each customer they referred to DriveTime, in violation of RICO. Jon Ehlinger, DriveTime`s general counsel, denied the charge, saying the company would fight „vehemently” to clear his name. [35] Employees are also encouraged to start start-ups.
Sister companies spun out of the company include GO Financial, Carvana and SilverRock Group. [13] Go Financial is a subprime loan financier. It is located in Mesa, Arizona. It was founded in 2011 and split into a separate company in 2013. Cox Enterprises, which owns the online marketplace AutoTrader.com, and Kelley Blue Book, the automotive valuation and research company, bought a stake in GO Financial. [4] It serves 2,800 merchants in 46 states. The company is owned by its president, Ernest Garcia II, who bought the company then known as Ugly Duckling in 1991, and Ray Fidel, the former president and CEO. [10] [11] The company has approximately 138 locations in the United States and employs more than 3,800 people in 2015. [2] In addition to its headquarters in Tempe, the company has a call center in Mesa, Arizona, and a collection center in Dallas, Texas.
[12] DriveTime Automotive Group Inc. is an American used car dealership and financial services provider. It is based in Tempe, Arizona, and sells and finances cars to customers across the country. The company was previously known as Ugly Duckling and was renamed DriveTime in 2002.