Capital One Financial and other lenders have announced plans to curtail their auto financing business, citing a more challenging market environment.
Capital One CEO Richard Fairbanks said during the bank's latest quarterly earnings call that the move is in response to pricing dynamics created by some competing lenders, which has helped profit margins tighten in the bank business. Bank car loans.
The bank said it took out about $10.3 billion in auto loans during the second quarter of 2022, down 12% from $11.7 billion in the first quarter. And auto originations were down 20% from the nearly $13 billion in loans Capital One made in the second quarter of 2021.
"Unsurprisingly, many auto lenders have raised prices as higher interest rates led to higher marginal financing costs, but others have kept prices relatively flat," Fairbanks said.
It was mainly some big players and credit unions that didn't really budge at all in terms of their pricing, Fairbanks continued. As a result, these players have seen a very significant increase in market share.
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