OttoMoto: Revving Up Indirect Lending for Independent Dealers

By John San Filippo

In the fast-paced world of auto financing, innovation is key. While established players cater to the needs of large franchise dealerships, a significant segment of the market – independent dealers – often lacks access to the same tools and resources. Enter Atlanta-based OttoMoto, an increasingly influential company that’s revolutionizing the indirect lending landscape. CEO Paul Nicholas and COO Carol Docalavich recently spoke with Finopotamus to shed light on OttoMoto’s unique platform and its potential to transform the relationship between credit unions and independent car dealerships.

From the Skies to the Streets: A Founder’s Unconventional Journey

Paul Nicholas

Nicholas’s path to founding OttoMoto is anything but typical. A former pilot, his career took a sharp turn after 9/11, leading him to the automotive industry. He spent 12 years immersed in the complexities of franchise dealerships, gaining firsthand experience in every facet of the business, with a particular focus on finance.

“I wore every hat in the dealership, but specialized in finance,” Nicholas explained, highlighting the breadth of his experience. This immersive experience, coupled with his subsequent work building indirect lending programs for financial institutions, gave him a unique vantage point. He identified a glaring gap in the market: the lack of efficient tools and resources available to independent dealerships, leaving them at a disadvantage in the financing process.

“It was kind of the Wild West,” Nicholas remarked, referring to the fragmented and inefficient pre-OttoMoto landscape. This realization sparked the creation of OttoMoto, a company driven by a mission to bring transparency and trust to a complex industry.

Streamlining Operations for All

While independent dealerships are OttoMoto’s primary focus, the platform’s benefits extend far beyond this segment. Franchise dealerships, often grappling with the challenges of finding and retaining seasoned F&I (finance and insurance) managers, can leverage OttoMoto to digitize and optimize their processes, improving efficiency and profitability. 

Carol Docalavich

“If it’s like a 680 [credit score] or above, everybody can do that, right?” Nicholas pointed out. “But how we’re helping them is determining best vehicle, best lender for that person below 680.” Even buy-here, pay-here dealerships, a unique segment of the market, find value in OttoMoto’s comprehensive suite of tools. The platform addresses the challenge head-on, providing a structured, guided process from application to documentation, ensuring compliance and simplifying complexities.

Empowering Credit Unions

OttoMoto recognizes the diverse needs of credit unions and offers a tiered approach to partnership, Nicholas noted. This allows credit unions to customize their engagement with the platform, selecting the features and services that align with their specific goals. “There’s multiple different ways they could reach out to us directly,” he explained. Credit unions seeking targeted solutions can utilize individual tools such as digital deal jackets and stipulation collection, streamlining specific aspects of their operations. Others, he added, can leverage OttoMoto’s vendor risk management and dealer onboarding capabilities to strengthen their due diligence processes and expand their network.

“We have a vendor risk tool that helps them onboard dealers efficiently and compliantly,” Nicholas added. For credit unions seeking a more comprehensive solution, OttoMoto offers a guaranteed title remittance and fraud prevention program, providing a secure and efficient pipeline for loan applications from vetted dealers. “We’re not trying to go in and change how anybody’s doing it now,” Nicholas reassured potential partners.

Adapting to Existing Infrastructure

Recognizing the importance of seamless integration, OttoMoto has designed its platform with flexibility and adaptability in mind. The modular approach allows credit unions to select and implement specific components of the platform without disrupting their existing systems.

“We do have certain aspects of the app that can be used a la carte,” Nicholas confirmed. Some lenders, for instance, leverage OttoMoto for dealer onboarding and KYC (know your customer) and fraud prevention tools, even if they are not yet utilizing the platform for processing loan applications. This modularity minimizes disruption and allows for a phased integration process, focusing primarily on connecting with the credit union’s loan origination system (LOS). “Typically, we’ve just had to go into the LOS,” Nicholas noted when asked about integration with a credit union’s existing technology stack.

Empowering Independent Dealers

Docalavich brought a fresh perspective to the auto lending industry, informed by her extensive background in franchising. She recognized the untapped potential of independent dealers – a substantial network of entrepreneurs who often lack the technological advantages afforded to their franchise counterparts.

“They seemed to be this underserved, forgotten 100,000 businesses,” Docalavich observed, emphasizing the market opportunity. “OttoMoto literally took those 12, 14 tabs [dealers had open] and puts it into one URL,” she added, highlighting the platform’s efficiency benefits. By consolidating multiple processes into a single, intuitive interface, OttoMoto dramatically improves efficiency and reduces operational overhead. Furthermore, the platform educates dealers on best practices for building strong lender partnerships, fostering a more transparent and collaborative ecosystem, she said.

Beyond Auto: A Vision for Embedded Finance and the Future

OttoMoto’s vision extends beyond simply streamlining the auto lending process. The company aims to become a central hub, connecting consumers, dealers, and lenders in a more seamless and efficient manner. Docalavich highlighted the company’s long-term goal of embedding finance within the broader ecosystem, envisioning OttoMoto as “that nucleus” connecting all stakeholders.

“We definitely want to be that nucleus in connecting the consumer to the dealer and the lender,” she stated. While the current focus is on the auto lending market, OttoMoto’s ambitions reach further, encompassing other asset classes such as powersports, RVs, marine, and aircraft. “We even have bought here, pay here and we have tools for refi lenders as well,” Docalavich pointed out. This expansion, coupled with their innovative approach to indirect lending and their commitment to empowering independent dealers, makes OttoMoto unique in the automotive finance space.