Wells Fargo, worried about defaults, stops making loans to most independent car dealerships

Hugh Son@HUGH_SON

 POINTS

• Wells Fargo, one of the biggest lenders for new and used car purchases in the U.S., sent letters to hundreds of independent auto dealerships last month telling them that the San Francisco-based company was dropping them as a customer, according to people with knowledge of the situation.
• A Wells Fargo spokeswoman confirmed that the bank, which only makes auto loans through car dealerships, will no longer accept loan applications from most independent shops. Independent dealerships typically sell used cars, unlike franchise dealerships that focus on new vehicles from specific manufacturers.
• The bank had “an obligation to review our business practices in light of the economic uncertainty presented by COVID-19 and have let the majority of our independent dealer customers know that we will suspend accepting applications from them,” Natalie Brown, the spokeswoman, said in an email.
• Before the pandemic took hold, Wells Fargo was growing its auto lending business. Auto loan origination at the bank climbed 19% in the first quarter to $6.5 billion.

WATCH NOWVIDEO02:45Wells Fargo taps brakes on its auto loan business

Wells Fargo is tapping the brakes on its auto loan business, CNBC has learned exclusively.

The bank, one of the biggest lenders for new and used car purchases in the U.S., sent letters to hundreds of independent auto dealerships last month telling them that the San Francisco-based company was dropping them as a customer, according to people with knowledge of the situation.

A Wells Fargo spokeswoman confirmed that the bank, which only makes auto loans through car dealerships, will no longer accept loan applications from most independent shops. Independent dealerships typically sell used cars, unlike franchise dealerships that focus on new vehicles from specific manufacturers……more here

Click here for reuse options!
Copyright 2020 Hiram's 1555 Blog