Major Lender Halts Auto Financing in Canada
SAN FRANCISCO — Wells Fargo Auto Finance has decided to pull out of the Canadian auto finance industry, effective immediately, SubPrime Auto Finance News' sister e-publication, Auto Remarketing Canada recently discovered.
"Wells Fargo Auto Finance announced to dealers on Nov. 12 that, effective immediately, it had decided to exit the indirect lending business in Canada," Steve Carlson, assistant vice president of communications, told Auto Remarketing Canada.
"Wells Fargo continuously reviews its operations and makes changes to align capacity with changing business needs," he added.
This move follows a third quarter where Wells Fargo Financial reported a loss of $33 million compared with a net income of $135 million in the same period a year ago, as reported earlier in SubPrime Auto Finance News.
According to officials, the loss reflected "higher credit costs, including a $162 million credit reserve build as a result of continued softening in the real estate, auto and credit card markets."
In Wells Fargo Financial's third-quarter earnings report, Dave Kvamme, president and chief operating officer, stated: "Losses in our auto portfolio increased this quarter, driven by a decline in used-car values. Across all of our businesses, we continue to take actions to reduce credit risk and right-size our expense base."