For three and half years Wells Fargo Dealer Services has been the No. 1 provider of retail loans, but now that title belongs to Ally Financial Inc., according to data from the Federal Reserve.
Wells Fargo held about $58 billion of outstanding retail auto loans at the end of June, compared with $59.8 billion at Ally, according to Bloomberg.
The shift reflects Wells Fargo’s continued strategy of purposely pulling back volume in the space and tightening credit, especially as delinquencies rise across the industry and used-car values — where the bank does the majority of its business — decline. Specifically, Wells Fargo dropped origination volume 45% year over year in the second quarter.
Ally is also losing retail loan volume in 2017, but at a slower pace than Wells Fargo. Ally’s second quarter results showed a 25% decrease in new vehicle retail loans from both Chrysler and GM and an 8.6% decline in originations overall.
However, the Federal Reserve numbers don’t tell the full story. The Big Wheels Auto Finance report conducted by Royal Media has ranked Ally higher than Wells Fargo for a couple of years, largely because it factors in lease outstandings as well, which Wells does not originate.
Those leases push Toyota Financial Services to the top of the heap, the 2017 report found. Additionally, the report found that Chase Auto Finance had more retail loan outstandings for the full-year 2016 than Ally or Wells — $65.8 billion, $65.7 billion, and $62.2 billion respectively.
Still, the Federal Reserve numbers underscore the findings of Big Wheels Auto Finance 2017, which is that the top 10 lenders are “poised for shakeup.”
For more on industry trends and growth opportunities, attend the 17th annual Auto Finance Summit, Oct. 25-27 at the Wynn Las Vegas. To learn more about this year’s event, visit the Summit’s homepage here, or to register click click here.
