DaimlerChrysler's "maverick" online direct lender, Giggo.com, has become a subsidiary of PeopleFirst.com in a transaction providing for a $20 million loan from DC and transfer of 77% of DC holdings in the Dallas-based company.

Giggo, which facilitates direct loans to purchasers of all brands of vehicles, and recently rankled some dealers in a pungent series of full-page magazine ads aimed directly at consumers, plans to remain online as a seeker of higher-risk vehicle purchasers, including subprime.

Based in San Diego, PeopleFirst says the Giggo acquisition will enable it to reach the $1 billion mark in vehicle loans next year. About 80% of the originations will come from PeopleFirst and the rest from Giggo, according to PeopleFirst co-founder and CEO Gary Miller.

Giggo's president, Brian Reed, is president of the combined firm. PeopleFirst's president and COO David Zeller, is the combine's COO. CFO Randy Ellsper-mann, retains that title for both ventures.

The reorganized board will include three new members from DaimlerChrysler.

Giggo.com, which sources other lenders with its Internet-generated leads, is preferred provider of online credit applications on the web sites of No. 1 consolidator AutoNation Inc., and Associates Auto Finance.

In view of the new alliance, says Mr. Reed, giggo.com has postponed plans to expand overseas and enter the mortgage field.

"We want for the present to focus on auto lending," he says. "You can only do so much."

Two of the oldest subprime financing companies have become "preferred providers" in a growing trend of automakers and dealer networks linking directly to sources not served by captive companies.

WFS Financial Services joined forces with Sonic Automotive, of Charlotte, NC, which last December purchased 29 FirstAmerica dealerships in northern California and Nevada already affiliated with the Irvine, CA-based lender.

DaimlerChrysler Financial contracted with Credit Acceptance Corp. to establish a pilot operation at 37 DC dealerships. Both are headquartered in Southfield, MI.

WFS, which services more than $6.7 billion in auto loan contracts on both nonprime and prime sectors, says it is the fourth largest company in its field.

WFS CEO Joy Schaefer says the connection with Sonic's 112 dealerships in 13 states "reinforces our commitment to provide relationship services through preferred national accounts."

Sonic's 2000 annualized revenue "run rate" rose to more than $6 billion with the FirstAmerica purchase, making it the likely second-largest megadealer network in the U.S. behind AutoNation Inc.'s 290 stores.

Donald A. Foss, founder and chairman of Credit Acceptance, expressed hope that the DC pilot program would grow to a national format by year-end. CAC last year also launched a subprime customer-leasing program, which produced $12 million in receivables in the first quarter of 2000.