Retail Partnerships with Carmakers Pay Off for Wells Fargo, Chase

Retail partnerships with automakers resulted in an uptick in loan originations for two of the industry’s biggest lenders, Wells Fargo Dealer Services and Chase Auto Finance.

Wells Fargo reported record-breaking originations to the tune of $6.8 billion in the first quarter of this year, which parent Wells Fargo & Co. said was a 10% year-over-year gain. JPMorgan Chase & Co. announced quarterly originations at its auto-lending arm were $6.5 billion, a 12% increase. Both stated manufacturer partnerships played a vital role in the increase of auto lending, and that they plan to expand upon those relationships and their dealer bases.

Last year, GM extended a pilot program with Wells Fargo Dealer Services to offer incentivized loans through roughly 1,600 stores in its West and South Central areas. In addition to its own indirect auto loan business, Chase supplies private-label loans and leases for Jaguar Land Rover North America, Mazda North American Operations, and Subaru of America Inc.

Wells Fargo ranked No. 2 — behind only Ally Financial — in new- and used-auto loans combined in 4Q12, according to  Experian Automotive, and the lender took the top spot in used-vehicle loans and ninth place in new-vehicle loans that quarter. Chase came in fourth in new and used combined, fourth in used, and fifth in new.