Wells Fargo to Cease Making Auto Loans through Independent Car Dealerships
Wells Fargo
is one of the largest lenders for new and used car buys in the United States.
Wells Fargo informed hundreds of independent auto dealerships through mail in May
that the bank was leaving them as a customer. Wells Fargo only makes auto loans through car dealerships
Wells Fargo cuts back from making loans to independent car dealerships
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.