More pressure on used car prices as lenders pull back

|By:, SA News Editor

via Bloomberg

Height Securities' Edwin Groshans estimates cautious lenders poised to take $4B-$5B of credit from the used car market.

He notes Fifth Third Bancorp (NASDAQ:FITB) CFO Tayfun Tuzun saying "reducing capital deployment" is the right move at this time. Tuzun expects his bank's auto loan portfolio to fall to 23-28% by 2019.

TCF Financial (NYSE:TCB) on its earnings call said it plans to reduce auto originations by 30-40%.

Then there's "disciplined" underwriting standards at subprime specialist Santander Consumer (NYSE:SC), where auto originations fell 21% Y/Y in Q1.

Capital One (NYSE:COF) seems more aggressive in the growth area, but it too notes reasons for caution.

Interested parties: Ally Financial (NYSE:ALLY), Credit Acceptance (NASDAQ:CACC)