Banks boost auto lending
There's no letup in sight in the battle for dealer business among banks, captive finance companies and credit unions.
Photo credit: BLOOMBERG
Wells Fargo and Chase, two of the biggest auto lenders, continued to expand in the fourth quarter, while regional player Huntington Bank posted record volume.
For dealers that means no letup in sight in the competition for their business among banks, captive finance companies and credit unions.
"It's incredibly competitive, and that's very good for the dealer and the consumer," said Rich Porrello, segment director of auto finance at Huntington Bank of Columbus, Ohio.
Huntington offers auto loans in 15 states from Ohio to New England. In 2010 the bank started expanding from its core six-state footprint in the Midwest.
Porrello said the bank had a record fourth quarter and full year in 2012 for auto loan originations, up 12 percent in the quarter to $880 million and up 12 percent for the year to $4 billion. Through the third quarter, Huntington was among the top 20 U.S. auto lenders, according to Experian Automotive.
The biggest banks in auto lending in the third quarter were: No. 1, Wells Fargo; No. 2, Ally Financial, the preferred lender for General Motors and Chrysler Group, although Chrysler has said it is close to signing a new preferred lender; and No. 3, Chase Auto Finance.
Wells Fargo was also the biggest lender overall in the third quarter, topping the captive finance companies, Experian said.
Wells Fargo's auto loan originations in the fourth quarter rose 8 percent from a year ago to $5.4 billion. Chase's originations for the quarter were up 12 percent to $5.5 billion.
Ally hasn't reported fourth-quarter results yet.
Porrello said industry auto loan growth should continue in 2013.
"Interest rates being low and used-car prices being high" are a good combination "in terms of high performance," he said.
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