Capital One reported strong auto loan origination growth but fierce competition as it and other major publicly traded auto lenders shared third-quarter results.
Capital One's auto loan originations surged during the third quarter compared with the prior year, rising 29 percent to $11.6 billion.
CEO Richard Fairbank credited the company's digital capabilities and dealer relationship strategy for the growth. He also noted that "there's like four or five planets that aligned in the auto business," which fueled results.
"It's been a very strong thing," he said during an earnings call in October.
But Capital One has kept an eye on competitive pressures, Fairbank said, arguing that the company's auto lending business was more prone to disruption than its credit card interests.
"The auto business, again, has the dealer in the middle of the whole exchange, and the dealer is driving an auction," Fairbank said.
Capital One saw increased auto lending competition from all segments, including large banks, credit unions and smaller independents, according to Fairbank. It played out in pricing, loan terms and underwriting standards. Lenders also were expanding beyond their "pre-pandemic credit box," Fairbank said.