Q3 Auto Originiations Up at Wells Fargo, Chase Auto Finance
Wells Fargo and Chase Auto Finance grew third-quarter auto originations by 10% and 19%, respectively, with a Wells Fargo official noting that new auto sales were at their highest levels in a decade.
SAN FRANCISCO and NEW YORK — Wells Fargo reported last week a 10% increase in third-quarter auto originations from a year ago, while Chase Auto Finance realized a 19% increase in originations from the year-ago period.
Wells Fargo’s third quarter auto originations, which were up 2% from the prior quarter, totaled $8.3 billion, with bank officials noting that new auto sales were at their highest levels in a decade.
“Auto loans were up $39 billion, or 7%, from last year,” said John Shrewsberry, Wells Fargo’s CFO. “We had record new originations in the third quarter … reflecting the strong auto market while we have remained disciplined in our approach.”
Wells Fargo’s net charge-off rate was 31 basis points of average loans, up slightly from the prior quarter due primarily to seasonally higher auto losses.
Auto originations for Chase Auto Finance grew to $8.1 billion in the third quarter, with officials noting that loans skewed toward the prime space.
Net income for Chase’s card, commerce solutions and auto finance divisions totaled $1.1 billion, a 6% decrease from a year ago, according to the company. Combined net revenue totaled $4.8 billion, a 2% increase. Additionally, noninterest expense for card, commerce solutions and auto rose 8% to $2.2 billion, driven by higher auto lease depreciation and higher marketing expense.
Chase stated that third-quarter results reflected a continued steady growth in new-vehicle sales and stable used-car values.
“We saw average loan and lease balances up 9% and the pipeline is good,” said Marianne Lake, JP Morgan Chase CFO. “Finally, on credit, the net charge-off rate for the quarter was 241 basis points, and we expect net charge-offs of around 250 basis points over the medium term.”
Overall, JP Morgan Chase reported net income of $6.8 billion, or $1.68 per share for the third quarter 2015 — an increase of22% from a year ago. Net revenue fell 6% to $23.5 billion.
Wells Fargo reported net income of $5.8 billion, or $1.05 per diluted common share — up 1% from a year ago. Revenue was up 3% at $21.9 billion.
More F&I
How AI-Powered Coaching Is Transforming F&I Performance
See how AI-powered coaching can turn F&I customer conversations into actionable insights that support compliance, performance and profitability
Read More →
Sell Value, Build Trust
In this video, Trent White explains why selling on value, not fear, builds lasting customer trust, reduces cancellations, and drives long-term success.
Read More →
F&I Sales Give Dealers First-Half Lift
Product business shored up total profits to avoid an overall revenue tanking as product penetrations held steady, StoneEagle reported.
Read More →
Targeted Training Drives Results
Today’s technology, instead of threatening F&I managers, can actually make them better, according to an industry veteran who’s watched market setbacks roil the unprepared.
Read More →
Double the Change, Double the Chance
When an F&I manager gets a customer refusal, it’s a wise move to tweak more than one thing in the product offering.
Read More →
Just Do It
F&I managers need training, but instead of resisting application or expecting perfection, they should improve by simply acting on what they learn.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Leading with Purpose
In this video, Trent White explains how understanding your people’s 'why' is a key leadership responsibility of F&I professionals and how that mindset drives dealership engagement, trust and performance.
Read More →
Integrating Nontraditional F&I Products
The niche presents a strategic advantage for auto dealerships as they move to adapt to fast-changing consumer expectations in today’s market.
Read More →
Trust Is Personal
Technology, no matter how efficient, can’t replace what the human F&I manager can do, which is to bridge the divide between cyberspace and the in-store experience.
Read More →