Almost none. Dealerships will arrange financing for you, but the actual financing comes from a third party financial institution. The dealership walks away from the deal with the full cash value of the sale; and maybe a kickback from the bank. The concerning thing with vendor financing is that the vendor is supposed to be in the widget business, not the financing business. If they are getting into the financing bussiness, that is generally a sign that the professional financers don't want to get involved; which is not a good sign.

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ak217 2 hours ago | parent | next [-]

captive lender originations account for between 20% and 30% of the us auto loan volume depending on whether you count the loans or the volume

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ralph84 2 hours ago | parent | prev | next [-]

You're being deliberately obtuse. Every auto manufacturer has a captive finance arm. That captive finance arm may be operated by a financial institution, but the financing is subvented by the auto manufacturer. Chase isn't offering 0% financing on a Subaru because they like the car, they're offering it because Subaru pays them to.

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dofm an hour ago | parent [-]

This is, nevertheless, a quite different story. Nvidia does not have a captive finance company.

The concern has to be that ordinary financial institutions might not make such loans to startups, and that therefore Nvidia is using vendor finance to create sales that otherwise would not happen.

Rather than the auto loan system, where essentially the front face of an entire finance industry has moved into the dealerships but you can still get a car loan outside it.

	▲	conductr an hour ago \| parent [-]
		> Nvidia does not have a captive finance company You don’t need to when you have a few dozen customers you’re doing this for. You meet with them and plot world dominance over cocktails. Auto companies have the structure they do to support 1000s of dealerships and millions of customers.

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a34729t an hour ago | parent | prev [-]

Bullshit. Most of our economy is financing. Airlines are literally credit card companies with some aircraft leases attached.

	▲	dofm an hour ago \| parent [-]
		Right but aren’t you kind of underscoring the point? It’s not really the kind of vendor finance we are talking about then; it’s really just the finance industry moving into loaning other things, moving the storefront into another business. It’s pretty highly regulated. Vendor finance of the kind Nvidia is doing is different: they are the single vendor for one thing, they are loaning to startups who otherwise might not get funding from banks, it’s coming from the same balance sheet as the product, and these loans are materially causing GPU scarcity. In general, vendor finance of the kind Nvidia is doing is indicative of an uncertain market, and when it’s the only vendor and it causes the price of the thing to rise, that’s obviously bad. The industry is very aware that it relies on this for its continuing growth and stability.