Wells Fargo auto loans review: Now only available through dealerships

Man driving in his car, smiling Image: Man driving in his car, smiling

In a Nutshell

Wells Fargo offers financing for new and used cars through its network of dealers. The lender offers up to 100% financing for those who qualify and loans for as little as $2,500, according to a company representative. But you can’t apply directly with Wells Fargo, and the bank doesn’t offer loans for private-party purchases, lease buyouts or refinancing.

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Pros Cons
Up to 100% financing available Dealer network excludes most independent dealers
Considers people with fair credit Limited loan options
Offers loans for as little as $2,500  

What you need to know about Wells Fargo auto loans

Since mid-2019, Wells Fargo has transitioned from offering auto loans directly to consumers to an indirect financing model, which requires you to apply for a Wells Fargo auto loan through a dealership. The lender partners with thousands of dealers across the U.S.

Limited loan options

Wells Fargo offers only new- and used-car loans through its network of dealers. It no longer offers auto refinance loans — so if you want to refinance, buy out a lease or buy a vehicle from a private party, you’ll need to consider other lenders.

Because you can’t apply for a Wells Fargo auto loan until you get to the dealership — and you’ll  fill out a general credit application that the dealer may send to multiple lenders — it may be a good idea to shop around with some direct auto lenders before you go car shopping, so that you can better compare the terms the dealership offers you.

Dealer network made up mostly of franchise dealers

In the past, Wells Fargo partnered with both franchise and independent car dealerships. Franchise dealers may sell both new and used cars, while independent dealers typically sell only used cars.

But in response to the COVID-19 pandemic and economic downturn, the financial institution has suspended applications from most of its independent auto dealerships. This means that if you want a loan with Wells Fargo, your options may be limited to the vehicles offered by your local franchise dealerships.

Wells Fargo doesn’t maintain a list of partner dealers on its website, so it’s impossible to know if dealers in your area are in the bank’s network unless you call the dealership directly.

You may not need a down payment

Wells Fargo offers up to 100% financing to borrowers who qualify, according to Natalie M. Brown, communications senior manager with Wells Fargo. This can be helpful if you don’t have cash for a down payment or don’t want to drain your savings account.

But keep in mind that putting money down on a vehicle could save you money in interest because you’re financing a lower amount. It can also help you avoid having negative equity in your car as it depreciates.

A closer look at Wells Fargo auto loans

Here are some of the finer details that will help you compare Wells Fargo Bank with other auto lenders.

  • Loan amounts start at $2,500, according to Brown. This is lower than the minimum loan amount many lenders offer.
  • Repayment terms can be as long as 75 months, said Brown. Just remember that while a longer loan term could mean lower monthly payments, you’ll probably end up paying more in interest over the life of the loan.
  • Wells Fargo allows you to change the due date on your loan payment once. This may come in handy if you find yourself short on cash one month or want to line up your car loan payment due date with your paycheck schedule.
  • Wells Fargo considers people with fair credit. Nearly 34% of auto loans issued in the first quarter of 2020 went to people with FICO credit scores under 680, according to the bank’s Q1 2020 quarterly report.
  • Some vehicles aren’t eligible for Wells Fargo financing, including large commercial-type vehicles (like dump trucks) and vehicles that auto manufacturers have discontinued, according to Brown.

Is a Wells Fargo auto loan the right fit for you?

For most people, getting a Wells Fargo auto loan may not be intentional. When you apply for a loan through a dealership, it typically sends your credit application to multiple lenders for approval.

If you bank with Wells Fargo and want to keep all of your financial dealings under the same roof, it may be worth asking to work with Wells Fargo specifically instead of another lender. But be sure to talk to the dealer about all of the offers you’ve received so that you can compare their rates and terms.

But if you want to apply for auto loan preapproval before you head to the dealership, you’ll need to look elsewhere — Wells Fargo doesn’t offer that option.

How to apply for a loan from Wells Fargo

Currently, the only way to apply for a Wells Fargo auto loan is to fill out a credit application with one of the dealers in its network. Because the lender doesn’t have a list of partner dealers on its website, though, you may need to call around and ask dealers directly about the lenders they work with.

Before you head to the dealer, consider getting preapproved with some auto lenders who provide loans directly to customers. Getting preapproved can take some time, especially if you’re applying for preapproval with multiple lenders. But it can give you a better idea of whether the interest rates the dealership offers are competitive and help you find the best deal that fits your budget.

Just remember that getting preapproved for a loan doesn’t guarantee final approval, and the estimated rate and terms may change after you submit a formal application. And when you submit a credit application at the dealership, the lenders the dealer sends your application to may run a hard inquiry on your credit, which can affect your credit scores.

Read our article on the best places to get a car loan to get some ideas on where you can start.

Not sure if Wells Fargo is right for you? Consider these alternatives.

If you’re not sure whether a Wells Fargo auto loan is right for you — or you simply want more options before you head to the dealership — here are a couple of alternatives to consider.

  • Capital One Auto Finance: This lender could be good if you want to apply for prequalification before heading to the dealership. Just keep in mind that prequalification isn’t a guarantee of loan approval.
  • LightStream: This lender may be worth considering if you want to buy a used car from a private party or buy out your lease.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Cr… Read more.