In this installment in the series on the Value of Captive Financing, we explore the ways in which properly leveraged captive financing can protect market prices for assets.

1. Impact of Captive Finance
TFS Concept Template
This model has been conceptualized from Transcendent Research © Transcendent www.transcendent.com.sg
Protect Market Prices
Subsidies offered via Financial
Services provide superior alternative
to cash discounts. By providing a
discount through financing, the market
value of the original asset is not
affected, but the customer still receives
a financial benefit. Furthermore,
captives have greater control over
assets financed through them, allowing
them to control the volume of certain
models reentering the market towards
the end of their contract term as well as
encourage the movement of older
models prior to the release of a newer
one. In this way, captives are able to
protect asset values across the market.
Cash discount Subsidized Finance Offer
• Retail price immediately
negatively impacted for
future sales
• Residual value of all
recently sold assets
immediately reduced
• Existing Customer upset &
loyalty threatened
• No negative impact on new
asset prices
• Flexibility to affect residual
value of assets