Warburg Pincus is exploring a potential sale of subprime auto lender Exeter Finance in a deal that could value the business between $2.5bn and $3bn, according to a Bloomberg report.

The private equity firm is working with advisers to identify potential buyers as part of its review of strategic options. An initial public offering is also being considered as an alternative exit route.

Discussions remain at an early stage, and no final decision has been made. Warburg Pincus could still opt to retain ownership of the business.

Exeter Finance operates in the US auto lending market, providing financing to consumers with lower credit scores. The company works with more than 15,000 dealerships and serves over 650,000 customers.

Warburg Pincus acquired the business in 2021 from Blackstone, positioning the investment within its broader financial services strategy.

The potential sale highlights ongoing private equity activity in credit and specialty finance, where firms continue to explore exit opportunities amid evolving market conditions.

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