Unlike other lenders, which are saying they exited the market because of declining residual values for used vehicles, Wells says industry volume was too low for them to earn sufficient returns to stay in the business.
“Volume in the business had fallen off dramatically and it was expected to continue declining,” Wells Fargo spokesman Steve Carlson told Automotive News on Tuesday, July 29.
Carlson wouldn’t comment on the role residual values played in the San Francisco bank’s decision.
Wells Fargo notified dealers of its decision on July 9, Carlson said.
Leases represented less than 8 percent of Wells Fargo Auto Finance’s new loans between January and May of this year.
Wells Fargo will continue to finance consumer purchase loans.