Wells Fargo Dealer Services, a different division that buys auto loans from 11,000 U.S. dealerships, was not part of the shakeup, said Caren Roberson, director of corporate communications for Wells Fargo Dealer Services in Irvine Calif.
Roberson said that dealers working with Wells Fargo Dealer Services should experience “business as usual,” with no disruptions.
The indirect loan business “is completely unaffected,” she said. .
In indirect lending, the dealership acts as a middleman, submitting the customer's credit application to multiple auto lenders. Dealers make money either by marking up the customer's interest rate and taking a cut of the profit or by receiving a flat fee. Dealers do not get a cut of direct loans.
If anything, the closings at Wells Fargo Financial could represent positive news for dealers because they mean less competition for dealers in the subprime segment.
In addition to being the No. 2 auto lender, Wells Fargo is No. 1 in used vehicles, according to Experian Automotive.