Wells Fargo Auto Loan Review

Couple Finalizing a New Car Purchase
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Taking out a car loan is an important decision that you should carefully consider. Among the many factors to consider is your personal creditworthiness, how much of a loan you need, and the term length of your loan. There are a variety of different options for financing an auto loan. It helps to understand these options and compare lenders when shopping for an auto loan.

Wells Fargo is another of the large banking institutions that offer auto lending services for consumers and businesses. If you are looking for a financial institution to initiate a loan with, it's important to know what terms and conditions are offered so that you can compare them to other offerings.

Pros of A Wells Fargo Auto Loan

If you have a Wells Fargo checking account and maintain automatic payments, you'll receive discounts, and the following:

  • Quick credit decisions and same-day funding
  • Better rates than you are likely to get from a dealership
  • Option to speak with a Wells Fargo loan specialist
  • Loans do not require down payment
  • Military discounts
  • Your fee for starting the loan is included in your monthly payments rather than charged upfront.
  • Loan amounts can range up to $100,000

Wells Fargo Auto Loan Cons

As with any lender, there are some things Wells Fargo could do a little better:

  • Auto loans are only available for up to 72 months
  • History of very questionable financial practices, especially towards those who pay off their loans early...in the past, they have charged customers without their knowledge
  • If you live in Louisiana, you’re out of luck: Wells Fargo doesn’t service loans in this state
  • No pre-approval. You can only apply for a loan on a vehicle you’ve already selected

Applying for an Auto Loan at Wells Fargo

You’ll need to have copies of the following financial documents in order to apply:

  • Social security number
  • Previous and current residential addresses
  • A statement detailing your rent or mortgage payments on your home or apartment
  • Employment history and status of current employment
  • Proof of income

You will also need to have a vehicle selected before you apply for a loan. You will need to provide:

  • The vehicle’s VIN, year, make, model, and mileage

If you are refinancing your loan, you will also need proof of car insurance.

A Note on APR

The annual percentage rates listed below are the absolute lowest you would pay—and assume that you have excellent credit as well as a reasonable loan amount that is for no more than 85% of the vehicle’s cost (you made a 25% down payment) and the cost of the vehicle is also more than $22,000.

Notably, the rates also assume that you have a Wells Fargo checking account that you’ll be making regular payments from. If you do not, you can add an additional 0.25% to these rates from the start.

If you have a perfect credit score, you will likely pay something similar to these rates. However, the lower your score, the more you can expect to pay in interest.

Types of Auto Loan Products

Starting annual percentage rates (APR) are based on your credit scores and the amount of income and debt you have. New car loan financing is available for those who purchase a new car directly from a dealer and generally have a fairly low starting APR around 4%. Used car loan financing is available both for those who are planning on buying a used car from a dealer and for those who are buying from a private seller. If you are buying from a private seller, expect to have an APR around 7%.

If you lease a car and decide that you want to keep it at the end of your lease term—called lease buyout financing—you will probably need a loan in order to do so. Starting APR for these types of loans are close to 4.5%.

If you have a car loan but are dissatisfied with your rate, Wells Fargo does not offer auto loan refinancing.

The Bottom Line

If you have perfect credit and a Wells Fargo checking account, you should definitely consider this product if you are buying a new car that sells for more than $26,000. But if you are buying a less expensive vehicle, a used vehicle, or have less than stellar credit, proceed with caution, and only after you have pre-applied elsewhere.

It’s also important to remember that you will have to know what vehicle you want before you apply for a loan—because unlike many lenders, Wells Fargo does not allow you to be pre-approved.