LendingClub Picks Santander as Auto Refinancing Partner

LendingClub has tapped Santander Consumer as the primary loan servicer for its auto refinance portfolio.

The partnership, announced Tuesday (Sept. 12), involves LendingClub Bank’s direct auto refinance program that — per a news release — covers more than 94% of the U.S. population.

“Santander has a proven track record in auto loan servicing making them a perfect fit to handle our growing auto portfolio,” said Adam Crossan, LendingClub’s vice president of auto.

“Our shared passion for applying financial technology to help customers meet their personal financial goals makes this partnership with Santander Consumer an excellent fit,” he said. “We know our customers are in good hands.”

Aside from onboarding LendingClub’s new originations, Santander Consumer has converted all existing portfolios from the respective servicers, allowing for “a superior and unified experience” for LendingClub’s auto customers around the country, the release said.

The partnership comes at a time when consumers might have to face spending more than they expected for a vehicle, as car supplies remain constrained.

As noted here earlier this month, industry analysts anticipate carmakers will produce 10 million to 12 million fewer vehicles in the coming years, which means the supply of used cars and cars available for lease will fall as well.

“That’s a hole coming in the used vehicle market,” David Greene, industry and marketplace analyst for Cars.com, told Seeking Alpha.

He added that consumers who thought they were paying too much for used cars during the COVID-19 pandemic might have actually been getting a discount.

“Prices are going to stay elevated for several years,” he said. “The entire industry is winning.”

PYMNTS has collaborated with LendingClub on a number of studies, including one that showed more than 60% of Americans were living paycheck-to-paycheck as of June.

It’s a trend that Amber Carroll, senior vice president of membership and lifecycle strategy at LendingClub, told PYMNTS is here to stay.

“The paycheck-to-paycheck lifestyle is beginning to be the norm,” Carroll said, pointing to data that shows that even high-income households that make more than $100,000 per year are feeling the sting of inflation.

Overall, the harsh economic climate has driven a decline in consumer purchasing power, no matter their earnings, with more households choosing to focus their spending on essentials, which prevents them from growing their savings.

“Consumers are adjusting their spending behaviors, but this is allowing them to tread water, not get ahead,” said Carroll.