Auto Loans

Wells Fargo Auto Loan: In-Depth Review

Walking into a dealership without doing loan research can make it easy for a salesperson to convince you that you can only qualify for a high interest rate. Instead, by already having a couple offers from a bank or credit union, you’ll know the rate you deserve. LendingTree also offers a financing guide that can give you an idea of the APR you may qualify for based on your credit score.

Most lenders have an online auto loan application process, and using one to get preapproved for a loan will let you know what to expect before you go to buy a vehicle. Here we’ll review Wells Fargo’s auto loan: the company, its rates, how it compares to others and how to apply.

What is Wells Fargo?
Wells Fargo auto loan details
A closer look at Wells Fargo auto loans
How to apply
The fine print
Bottom line

What is Wells Fargo?

Henry Wells and William Fargo founded Wells Fargo to provide banking to the miners of the California gold rush in 1852. It is the third largest bank in the U.S. as of December 2017 in terms of assets. It serves over 4 million auto finance customers and offers banking, credit cards and loans for individuals and businesses.

Wells Fargo is still working on repairing and improving its reputation following a large fraud scandal that came to light in 2015. Salespeople opened accounts, such as auto insurance, for members without their knowledge in order to meet aggressive sales quotas. In July 2017, Wells Fargo announced it would send $80 million to auto loan customers in adjustments and remediation, as the company charged nearly 490,000 people for vehicle insurance when they already had it. The Wells Fargo annual report released in March 2018 is titled “Rebuilding Trust.”

Wells Fargo auto loan details

Wells Fargo auto rates are as low as 3.90% APR  for a new car, and 5.26% APR for a used one if the vehicle is purchased at a dealership. Its refinancing and lease buyout rates start at 5.33% APR and 5.08% APR, respectively. If you’re buying from a private party, not a dealership, the rate is as low as 8.47% APR.

The rate you receive will depend on your credit history, your debt-to-income ratio and the term of the loan. Wells Fargo auto loan payment terms can range from 12 to 72 months in yearly increments. For a vehicle that’s seven years old or older, the longest loan term you can get is 48 months.

Wells Fargo also extends personal loans for recreational vehicles: RVs, motorcycles, boats, airplanes and miscellaneous recreational vehicles such as snowmobiles and Jet Skis. These personal loans are secured by the vehicle you’re purchasing, and like business equipment loans, which companies use to buy vehicles, they generally have higher interests than a regular auto loan. You can find Wells Fargo auto loans for businesses under its small business and commercial lending departments. These equipment loans have rates as low as 6.75% and terms from 24 months to 72 months.

Wells Fargo offers customer relationship discounts if you make automatic payments from a Wells Fargo deposit account. For a personal loan on a recreational vehicle, Portfolio by Wells Fargo customers can receive up to a 0.5% rate discount.

A closer look at Wells Fargo auto loans

Advantages of the Wells Fargo auto loan

  • Choice of dealerships: Wells Fargo partners with 14,000 auto dealers, which is a little higher than average. Capital One, another one of the largest U.S. banks, partners with 12,000.
  • Rate discounts available: Wells Fargo offers customer relationship discounts. To qualify for any discount, you have to have a Wells Fargo qualifying relationship and make automatic payments from a Wells Fargo deposit account that you have before or open at loan booking. If you are purchasing a recreational vehicle (which falls under a personal loan and not an auto loan), and you are a Portfolio by Wells Fargo customer, you can qualify for a 0.5% rate discount. If you are just applying for a personal loan for a recreational vehicle or a business loan for a company vehicle, you can qualify for a 0.25% rate discount.
  • Range of terms: Wells Fargo offers a term as short as 12 months and as long as 72 months. For comparison, JPMorgan Chase, one of the largest auto lenders in the U.S., only offers as short as 48 months.
  • All types of vehicles qualify: You can have a Wells Fargo loan for all types of vehicles, from motorcycles to yachts.
  • No down payment: Wells Fargo does not always require a down payment. Its online payment calculator assumes you’ll finance 100% of the value of the car.
  • Poor credit considered: You don’t have to have great credit to apply for a Wells Fargo auto loan. On its online Wells Fargo auto loan payment calculator, you can select a range for your credit score. You can also read up on how to shop for the best auto loan if you have bad credit.
  • Valid for private buyers: You can use a Wells Fargo auto loan to buy a car from a private seller and to buy out a leased car.

Drawbacks of the Wells Fargo auto financing

  • Higher rates: Wells Fargo auto loans start at higher rates than competitors. For example,  Capital One offers as low as 3.24% APR.
  • Poor satisfaction scores: Wells Fargo Dealer Services ranks close to the bottom in the 2017 J.D. Power Consumer Financing Satisfaction Studies in both the mass market and the luxury market. For the luxury market, it ranked 12 out of 14. For the mass market, it ranked 19 out of 24. In both markets, it was below average in every category that had a score.
  • Approval time: Approval can be as fast as 15 minutes but may take up to a week.
  • Reputation: Because of the fraud scandal, which involved auto loans, Wells Fargo does not have the best track record in being honest and transparent in their processes.

How to apply

To apply for a Wells Fargo auto loan, you have to be a U.S. resident, at least 18 years old (19 in Alabama) and have a consistent source of income. If you live in Louisiana, you’re out of luck — Wells Fargo does not offer auto loans in that state. Here’s the basic info you’ll need to provide:

  • How much you want to borrow
  • Your Social Security number
  • Your contact information
  • Your employment details
  • Your income information

If you have not been at the same job for at least three years, you’ll need the information of your previous employer. You should also know whether you want a cosigner for the loan, and, if so, have all of this information about your cosigner available, too.

If you’re looking to be preapproved for a loan and haven’t picked out the exact car you want, this is all you’ll probably need. If you know which vehicle you want, have the year, make, model and mileage for the car.

A Wells Fargo auto loan representative will contact you as soon as 15 minutes after you submit your application. You may learn immediately whether you were approved, and, if so, the details of the offer, or you may need to provide more documents.

If you are not a U.S. citizen, you’ll need your visa or resident card, as Wells Fargo wants to make sure the time you are allowed to stay in the country exceeds the term of the loan. If you recently started your job, or if your pay varies because you’re paid hourly or on commission, Wells Fargo auto loans may ask for proof of income. And if you have not lived for very long at the address you used on your Wells Fargo loan application, you may have to provide proof of residence.

For more information on the type of documents you’ll need to complete the loan after you’ve applied, you can see this article on car loan documentation.

The fine print

The Wells Fargo auto loan site is easy to navigate. It offers a guide to vehicle financing, an “understanding your loan” page, a question-and-answer page and a Wells Fargo auto loan payment calculator that you can play with before deciding to apply. If you want one that lets you see different terms all at once, and enter more specific data, such as down payment and the value of a trade-in vehicle, you can use the LendingTree auto loan calculator.

For the Wells Fargo auto loan rate discounts, you cannot apply for the loan at a dealership, you have to apply directly to Wells Fargo. If you cancel your Wells Fargo checking account or cancel your automatic payments from your Wells Fargo account, the rate discount may be canceled.

The minimum amount required to finance with Wells Fargo is $5,000; the maximum amount is $300,000.

Wells Fargo auto loan payments are applied to the loan in a specific order. At first, more of your payment goes toward paying the price of the loan than the price of the car. Then it goes toward the interest on any auto insurance you may have. Similar to other lenders, you are required to have full coverage auto insurance, meaning insurance has to cover the car if it’s totaled. If you do not have it, Wells Fargo will add it and include it to your monthly auto loan statement. If you do not pay the additional amount for the auto insurance, it accrues interest and any money you pay on the loan goes toward that interest before it goes toward the principal, the price of the car. After your payment covers the two types of interest and the principal of the car, it is applied to the cost of the auto insurance that Wells Fargo adds, if insurance is added.

To reduce the amount of interest you’re paying, you can pay off the loan early. You can also make separate payments on the principal. There is no fee or penalty for prepayment on a personal loan for recreational vehicles, but there may be a small percentage penalty for a regular Wells Fargo auto loan depending on the state you live in.

There is a $99 Wells Fargo auto loan origination fee, which is financed in the loan and reflected in the APR. The Wells Fargo auto loan for business charges a $150 fee at the start of the loan, but the bank sometimes waives it. There are late fees and non-sufficient fund fees, as well as phone payment fees, which are $6 for making a payment with an automated system phone, and $12 for making a payment over the phone with a person.

Bottom line

If you have great credit and money to use as a down payment, you’ll want to look elsewhere for lower rates. If you have not-so-great credit, little to no money for a down payment, interested in buying a recreational vehicle or you want to buy from a private seller, Wells Fargo is an option.


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