Credit standards in auto lending are looser than they were a year ago, with many lenders now willing to approve riskier borrowers with more precarious loan structures.

The details: According to an internal memo shared with CDG News, Wells Fargo $WFC ( ▲ 0.03% ) Auto has released new, expanded credit guidelines for car dealers participating in its credit expansion pilot program.

Specifically, borrowers with FICO scores of at least 540 can now be approved for an auto loan with a loan-to-value (LTV) ratio up to 150%.

And borrowers with FICO scores between 500-539 can be approved with an LTV up to 110%.

https://news.dealershipguy.com...s-sources-2025-09-30


What could go wrong

24.99% APR for 96 months
Altima & Hellcat owners will be lined up around building

Wells is just dipping in the shitty credit buyer pool, which is huge. If you have a steady job/income and can fog a mirror, you can get a loan.

540?
Don't you get that as a 16YO with a gym card?

Well, cars got insanely expensive over the past few years and they're sitting on lots without buyers now and the panic button is getting pressed I think.

We bought a 2017 Honda Odyssey van with 29,000 miles on it in July of 2020 for around $25,000 with a 3% loan rate.

I just looked up what a 2022 Honda Odyssey with 29,000 miles goes for now and it's crazy, they now want like $38,000 -$42,000 for the same age van with same miles. And rates are easily double now if not more.

There are and have been all kinds of banks lending to subprime borrowers. It's a huge market. Why wouldn't Wells Fargo want to get in on the action? You may pay 27% APR on a car already 10 or more years old, but they will lend it to you.

Car loans for 27% an yet they pay 4% +/- doe CD's?

And let’s not forget how well Cash For Clunkers worked out. Taking affordable used cars out of the market that lower income people could afford the payments on or pay in cash for.

Forcing them into car loans they could not afford even with lowering the requirements for loans, extending the payment times.

Leasing, there were people that leased cars thatnever changed the oil during the two years of the lease agreement. Not unusual to see one returned to the dealership with three different tire brands and or sizes on it, the lower the tier pricing (Chevrolet, Pontiac) the more likely it went directly to the wholesale line unless we had to put in a motor which again wasn’t unusual and GMAC or the other leasing company were on the hook for it. If the lease holder could pay for an oil change or a tire they damn sure couldn’t pay off the bill to mitigate the damage on the turn in.