Major Lenders Getting Careful On Car Loans, Tesla Cuts Prices in China, Not-So Hole-In-One
- Author
- More Than Cars Media Network
- Published
- Mon 24 Oct 2022
- Episode Link
- None
We’re firing up the engines (and batteries) this Monday as we cover the shifting landscape with auto loans. We also talk about the reasoning behind Tesla’s price cuts in China, as well as a lucky swing that turned unlucky for one Ford store.
- The tides are shifting for major auto lenders as an increase in write-offs and pull back in originations are noted across the country.
- Wells Fargo & Co. - higher loss rates for loans it originated late last year led to an increase in write-offs for the period
- Tightened underwriting standards when they saw last year's originations starting to have problems. This led to a 40% drop in origination
- Ally Financial Inc. saw charge-offs for retail auto loans quadruple in Q3
- Said charge off rates could climb to 1.6% from current 1.05% although still below pre-pandemic levels
- Fifth Third Bancorp said it’s pulling back on originations citing dropping used car prices and risk of being upside down
- Chief Credit Officer, Richard Stein said Fifth Third is seeing more consumers -- subprime credit scores, outside the companies typical borrower, try to get concessions from lenders to keep vehicles
- Wells Fargo & Co. - higher loss rates for loans it originated late last year led to an increase in write-offs for the period
- Tesla cuts prices by over 9% on some on Model Y and Model 3 vehicles in China citing falling material prices and overcoming recent production glitches
- Model Y now costs the equivalent of $39,880, down from about $43,750, while the long-range version has an even bigger discount. A standard Model 3 fetches about $36,710, down by about $1,930 bringing levels closer to what they were in March
- This announcement came a day after CEO, Elon Musk warned of a “brutal recession” an an earnings call
- Competition in the Chinese market is much hotter than it is in the US market where Tesla still holds a commanding lead in EV deliveries
- A Ford dealer in Arkansas is in a legal battle with a consumer who sunk a hole-in-one at a golf tournament for, he thought, a brand new F150
- Austin Clagett stood in front of the $53k pickup for a photo after sinking his hole-in-one on Oct. 8 at Morrilton Country Club
- On its Facebook page, the Dealership said that it provided the truck "for display/advertising purposes only" because it didn't have enough lead time to obtain insurance for a giveaway. "Without our knowledge," the store wrote, "Morrilton Country Club promoted that this new truck would be available as a winning prize at the event despite our agreement that it would be for display purposes only."
- Screenshots show the Country Club posted the contest and the Dealership liked the post which has since been deleted
- Autoblog reported that Norwood provided video of a club employee calling Jay Hodge Ford after Clagett's hole-in-one. "Oh, don't tell me," a dealership worker said, and the club employee responded, "Unfortunately, it happened."
Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.
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