Investing
Wall Street Warns of Trouble Brewing in Auto Loans as Prices Dip
- Red flags show up in Wells Fargo, Ally, Fifth Third results
- ‘We still feel really good about new loans,’ Ally CEO says
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The largest US banks are warning of trouble ahead in auto loans as dropping prices for used cars risk leaving borrowers underwater.
Wells Fargo & Co. said that higher loss rates for loans it originated late last year contributed to an increase in write-offs for the period. Ally Financial Inc., the country’s second-largest auto lender, saw charge-offs for retail auto loans quadruple in the third quarter. And Fifth Third Bancorp said it’s pulling back on originations.